Topic: [SOLVED] Is there an easy explanation of how Bitcoin works? A video maybe? - page 2. (Read 3498 times)

Most digital signature systems include the public key used to sign the message as part of the signed message.  You simply hash this, and compare the hash to the Bitcoin address.  If they are equal, then that verifies that the signature on that message corresponds to that account.

This is incorrect.

Now you are catching on to why he can't find what he is looking for.  Note, I already know the answers to the questions I posed.  I wasn't looking for answers. I was just pointing out common questions that I see asked by people who are trying to understand the technical details of Bitcoin.

You calculate the public key and then take the SHA-256 hash of it.

and therein lies the crux of the problem

So he wants a detailed explanation of a highly technical subject, but in baby language?

The answer to that one is inevitably going to be fairly technical.  It's not a trivial calculation, and you have to get all details of that algorithm exactly right.  Here's the Wikipedia page about the digital-signature system used:

http://en.wikipedia.org/wiki/Elliptic_Curve_DSA

you show amazing cognizance

OK, so you want more technical details.  That doesn't sound like the "easy explanation" the OP was asking for.  But I can answer some of them... 

I don't see how your video answers the question presented by the OP?

Some of the common ones I've seen (and can think of off the top of my head), that your explanation doesn't cover are:

• If I know the private key, how do I calculate the Public Key?
• If I know the private key, how do I calculate the Bitcoin Address?
• If the Bitcoin address is a "unique fingerprint of the account's public key", how is it used to verify the signature?
• What "difficult mathematical problem" is being computed?
• How do all the nodes know that the miner solved the "difficult mathematical problem", without having to spend the time to solve it themselves?
• Why does the blockchain show multiple inputs from the same address?
• Why does my transaction have outputs to an address I didn't specify?
• Why does the total of unspent outputs in the blockchain associated with the addresses in my "Receive Coins" not match my Wallet Balance?

here:

http://www.youtube.com/watch?v=tpG8Z-k2koE

The basic explanation is pretty simple.  The technology is based on digital signatures (http://en.wikipedia.org/wiki/Digital_signature).  A bitcoin "account" is essentially just a digital signature keypair, meaning that only the account owner has the private key that's needed to digitally sign messages (similar to bank checks) authorizing the transfer of bitcoins out of their account.  Anyone, however, can verify the authenticity of those messages, or send coins to an account by referring to its address (which is a unique fingerprint of that account's public key).  There's a public database of all the valid transactions that have ever occurred called the "blockchain", which is copied on computers (nodes of the bitcoin network) all over the world; any computer which has an up-to-date copy of the blockchain can use it to calculate the current balance of any account.  A new transaction that you initiate is broadcast to a peer-to-peer network of active bitcoin nodes by your bitcoin client.  The transaction becomes permanent when it is incorporated into a new "block" of transactions which is added to the blockchain by a miner (a computer running mining software).  To create a new block requires solving a difficult mathematical problem, so that new blocks do not get created too often (about one every 10 minutes on average), which ensures that there is only one longest version of the blockchain in existence at any given time, which is then accepted by all nodes on the network as the new state of the bitcoin database.  As a reward for solving the hard problem of creating a new block, the miner that solved it is automatically assigned some new bitcoins (25 BTC) as well as the transaction fees from all the transactions in the block.  Any questions?

By "works" I mean - really works - with all the sha256, difficulty and mining computers operations.

As mentioned here (by Korbman):
https://bitcointalksearch.org/topic/wrapping-your-head-around-bitcoin-a-guide-143992
We need something similar to what @hazek did (in the topic I just mentioned) - but from the technical point of view.
And I believe we need it to be easy to understand for everyone.


I would love to show begginers this video - if it exists...
Or maybe somebody has it all explained in PDF or in a Forum Post?

What I think would be perfect is - in way which CGP Grey is doing his youtube videos:
http://www.youtube.com/watch?v=LrObZ_HZZUc The (Secret) City of London, Part 1: History
[He even included Bitcoin logos in this vid!]


Thanks and may the force of Bitcoin be with you

EDIT:
I think problem is solved. Now we would probably need a video with that.
Basics by @mpfrank
https://bitcointalksearch.org/topic/m.1534348

The "difficult mathematical problem" explanation by @DannyHamilton
https://bitcointalksearch.org/topic/m.1534672