Topic: What is a Bitcoin in my computer? An archive, an abstract value? - page 2. (Read 2107 times)
March 02, 2015, 07:54:58 PM
actually you have no bitcoin in your computer,you only have the key of some bitcoins in a blockchain address
https://www.youtube.com/watch?v=J8y_GypCWf4
Andreas addresses this in this video. It's basically a password that only you know... there are no coins, and there are no wallets. But the terminology makes us think of coins and wallets when it's just private keys.
Andreas addresses this in this video. It's basically a password that only you know... there are no coins, and there are no wallets. But the terminology makes us think of coins and wallets when it's just private keys.
Hello folks.
Sorry, this must be a very silly question, but it's a doubt i have for quite some time.
What is a Bitcoin when it's stored in my wallet? Is it a findable archive in my computer? or it is something more abstract?
Thank you.
Sorry, this must be a very silly question, but it's a doubt i have for quite some time.
What is a Bitcoin when it's stored in my wallet? Is it a findable archive in my computer? or it is something more abstract?
Thank you.
You are asking a very technical question.
The surprising answer is that bitcoins don't exist at all.
There is nothing that you can point at and say "that's a bitcoin". There is no file, or sequence of letters or numbers that represents a singe bitcoin. The concept of "a bitcoin" is an abstraction that we humans use to make it easier to talk about the transfer of control of value. For that matter, there are no "addresses" at the protocol level either.
There is a blockchain, which is an ordered list of every transaction that has ever occurred.
With the exception of one "generation transaction" in each block, transactions typically include a list of previously unspent outputs that are being used to supply value to the transaction, and a list of new unspent outputs, each assigned some portion of the total transaction value supplied by the inputs, that are encumbered with requirements that must be met in order to use the new unspent outputs as inputs to a transaction.
Typical outputs are encumbered with a requirement to supply an ECDSA digital signature generated with a private key that is associated with a specific hash of a public key. This public key hash is a numeric value between 1 and 1.46X1048. In order to tell someone how to properly encumber their outputs so that you are able to provide the necessary signature, you need a reliable way to give them this public key hash. A version number is pre-pended to the hash value, and a checksum is appended to the the hash value to prevent typos from causing a problem. Then the entire value is represented in base58 using letters and numbers. This versioned, check-summed, base58 encoded hash value is what we call a "bitcoin address". By giving this value to someone, their wallet can extract the hash value from the address, verify the check sum, and then add the proper encumbering onto the output of the transaction that the wallet creates.
Here's an example that's not entirely accurate but easily understandable:
Your wallet file is like a keyring - it holds the keys for your own bitcoin addresses.
Imagine a huge room full of safe deposit boxes. Each box corresponds to a bitcoin address and has a door that can only be opened with the correct key. In addition, it has a slit through which bitcoins can be put into the box but not retrieved. Everybody can enter the room and see how much is contained in each box. This room is the blockchain.
Whenever you create a new address, a box with that address "magically appears" but nobody can see it in the room before someone puts some bitcoin value into it because the blockchain does not store addresses but only payments to addresses (this is simplified, there are some other special kinds of payments).
Since you can create an arbitrary number of addresses, it is not easily possible to see which addresses belong to you. When someone sends you money, they know that the address they're sending to is one of yours, but they don't know your other addresses. If you send money from one of your addresses to someone else, they will know that you're the owner of that address. Therefore it is advisable to use each address only once (unless you're ok with tracability of your transactions, for example when you're a charity.)
When you lose a key, you can't access the value stored in its box anymore, and when a key is copied by a thief, they can access your box just like you could.
So you need to protect you wallet against loss and against unauthorized access.
Loss can be prevented by backing up your wallet file regularly, while theft can most easily be prevented by protecting the wallet file with a strong (unguessable) passphrase. Of course, when the computer on which you access the wallet file becomes compromised (keylogger etc.) then the keys in your wallet can be copied by a thief, so you need to be extra careful about this.
Onkel Paul
Your wallet file is like a keyring - it holds the keys for your own bitcoin addresses.
Imagine a huge room full of safe deposit boxes. Each box corresponds to a bitcoin address and has a door that can only be opened with the correct key. In addition, it has a slit through which bitcoins can be put into the box but not retrieved. Everybody can enter the room and see how much is contained in each box. This room is the blockchain.
Whenever you create a new address, a box with that address "magically appears" but nobody can see it in the room before someone puts some bitcoin value into it because the blockchain does not store addresses but only payments to addresses (this is simplified, there are some other special kinds of payments).
Since you can create an arbitrary number of addresses, it is not easily possible to see which addresses belong to you. When someone sends you money, they know that the address they're sending to is one of yours, but they don't know your other addresses. If you send money from one of your addresses to someone else, they will know that you're the owner of that address. Therefore it is advisable to use each address only once (unless you're ok with tracability of your transactions, for example when you're a charity.)
When you lose a key, you can't access the value stored in its box anymore, and when a key is copied by a thief, they can access your box just like you could.
So you need to protect you wallet against loss and against unauthorized access.
Loss can be prevented by backing up your wallet file regularly, while theft can most easily be prevented by protecting the wallet file with a strong (unguessable) passphrase. Of course, when the computer on which you access the wallet file becomes compromised (keylogger etc.) then the keys in your wallet can be copied by a thief, so you need to be extra careful about this.
Onkel Paul
great explanation man.. I used to have some doubts too but now it is all clear.. thank you
Here's an example that's not entirely accurate but easily understandable:
Your wallet file is like a keyring - it holds the keys for your own bitcoin addresses.
Imagine a huge room full of safe deposit boxes. Each box corresponds to a bitcoin address and has a door that can only be opened with the correct key. In addition, it has a slit through which bitcoins can be put into the box but not retrieved. Everybody can enter the room and see how much is contained in each box. This room is the blockchain.
Whenever you create a new address, a box with that address "magically appears" but nobody can see it in the room before someone puts some bitcoin value into it because the blockchain does not store addresses but only payments to addresses (this is simplified, there are some other special kinds of payments).
Since you can create an arbitrary number of addresses, it is not easily possible to see which addresses belong to you. When someone sends you money, they know that the address they're sending to is one of yours, but they don't know your other addresses. If you send money from one of your addresses to someone else, they will know that you're the owner of that address. Therefore it is advisable to use each address only once (unless you're ok with tracability of your transactions, for example when you're a charity.)
When you lose a key, you can't access the value stored in its box anymore, and when a key is copied by a thief, they can access your box just like you could.
So you need to protect you wallet against loss and against unauthorized access.
Loss can be prevented by backing up your wallet file regularly, while theft can most easily be prevented by protecting the wallet file with a strong (unguessable) passphrase. Of course, when the computer on which you access the wallet file becomes compromised (keylogger etc.) then the keys in your wallet can be copied by a thief, so you need to be extra careful about this.
Onkel Paul
Your wallet file is like a keyring - it holds the keys for your own bitcoin addresses.
Imagine a huge room full of safe deposit boxes. Each box corresponds to a bitcoin address and has a door that can only be opened with the correct key. In addition, it has a slit through which bitcoins can be put into the box but not retrieved. Everybody can enter the room and see how much is contained in each box. This room is the blockchain.
Whenever you create a new address, a box with that address "magically appears" but nobody can see it in the room before someone puts some bitcoin value into it because the blockchain does not store addresses but only payments to addresses (this is simplified, there are some other special kinds of payments).
Since you can create an arbitrary number of addresses, it is not easily possible to see which addresses belong to you. When someone sends you money, they know that the address they're sending to is one of yours, but they don't know your other addresses. If you send money from one of your addresses to someone else, they will know that you're the owner of that address. Therefore it is advisable to use each address only once (unless you're ok with tracability of your transactions, for example when you're a charity.)
When you lose a key, you can't access the value stored in its box anymore, and when a key is copied by a thief, they can access your box just like you could.
So you need to protect you wallet against loss and against unauthorized access.
Loss can be prevented by backing up your wallet file regularly, while theft can most easily be prevented by protecting the wallet file with a strong (unguessable) passphrase. Of course, when the computer on which you access the wallet file becomes compromised (keylogger etc.) then the keys in your wallet can be copied by a thief, so you need to be extra careful about this.
Onkel Paul
Bitcoin is a network of computers. Coins are generated as a reward for securing and maintaining the network.
Your bitcoin is a symbol which represents the work which was done to generate it, and the coin allows you access to use the network.
The coin exists only on the network, as a series of unforgeable transactions which prove the coin's authenticity from now back to the moment it was generated. A valid amount of coins shows how much of the network's resources you are entitled to use, and we know the coin is valid because we know you received it from its previous valid owner. We know the previous owner was valid because we know where he got it, and so on.
The "thing" that exists on your computer is a private key (a password or code) to your wallet address, which allows you to access your coins on the network. Even if you spend all your coins, nothing is different on your computer. You still have the same private key, but the network shows that the coins have moved from your address to someone else's.
Your bitcoin is a symbol which represents the work which was done to generate it, and the coin allows you access to use the network.
The coin exists only on the network, as a series of unforgeable transactions which prove the coin's authenticity from now back to the moment it was generated. A valid amount of coins shows how much of the network's resources you are entitled to use, and we know the coin is valid because we know you received it from its previous valid owner. We know the previous owner was valid because we know where he got it, and so on.
The "thing" that exists on your computer is a private key (a password or code) to your wallet address, which allows you to access your coins on the network. Even if you spend all your coins, nothing is different on your computer. You still have the same private key, but the network shows that the coins have moved from your address to someone else's.
Your wallet is just presenting your ownership of Bitcoins addresses you have. Because you have private keys for them.
Bitcoins are stored in Blockchain as Ledger.
Bitcoins are stored in Blockchain as Ledger.
Bitcoin exists in the form of a ledger shared across the bitcoin network, listing transactions between addresses/accounts. Only there in the ledger (called a blockchain) does bitcoin really "exist". You "own" a bitcoin when you have password access/control over the private keys that control bitcoins sent to you (or mined by you) on the blockchain, enabling you to initiate a transfer to a new address on the blockchain ledger.
The wallets people talk about on their computers don't hold bitcoins as such; they just contain the public and private keys that enable you to receive and send bitcoins, hopefully with good password control on the wallet itself. The wallet also ties into the blockchain to provide you with balance information and a transaction history. But the blockchain is the authority, and the only place a bitcoin really resides.
That's my take on it, anyway.
The wallets people talk about on their computers don't hold bitcoins as such; they just contain the public and private keys that enable you to receive and send bitcoins, hopefully with good password control on the wallet itself. The wallet also ties into the blockchain to provide you with balance information and a transaction history. But the blockchain is the authority, and the only place a bitcoin really resides.
That's my take on it, anyway.
a wallet on your computer is a private key file
bitcoins are not stored on your computer, they are on the blockchain, so when you say you have bitcoins it means that you have ownership of the public address,
bitcoins are not stored on your computer, they are on the blockchain, so when you say you have bitcoins it means that you have ownership of the public address,
Hello folks.
Sorry, this must be a very silly question, but it's a doubt i have for quite some time.
What is a Bitcoin when it's stored in my wallet? Is it a findable archive in my computer? or it is something more abstract?
Thank you.
Sorry, this must be a very silly question, but it's a doubt i have for quite some time.
What is a Bitcoin when it's stored in my wallet? Is it a findable archive in my computer? or it is something more abstract?
Thank you.
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