From 3b52a01bf966f3ad7fb18f33eef4e9549260a86a Mon Sep 17 00:00:00 2001 From: Shannon Appelcline Date: Wed, 26 Apr 2017 15:52:14 -0700 Subject: [PATCH] Update 1_0_Introducing_Bitcoin.md --- 1_0_Introducing_Bitcoin.md | 40 ++++++++++++++++++++++++++++++++++++++ 1 file changed, 40 insertions(+) diff --git a/1_0_Introducing_Bitcoin.md b/1_0_Introducing_Bitcoin.md index 0200b6d..03c0b09 100644 --- a/1_0_Introducing_Bitcoin.md +++ b/1_0_Introducing_Bitcoin.md @@ -1,3 +1,42 @@ +# Chapter One: Introducing Bitcoin + +These tutorial will lead you through basic Bitcoin usage and programming, using a variety of techniques from the command line to scripting. However, before you should get started, you should have a base understanding of what Bitcoin is, and how it works. This chapter provides that overview. Many more definitions will appear within the document itself; this is only intended to lay the foundation. + +## Objectives for this Chapter + +After working through this chapter, a developer will be able to: + + * Assess the Parts of the Bitcoin System + * Decide Whether Blockchain is Right for You + +Supporting objectives include the ability to: + + * Understand What Bitcoin Is + * Understand What Blockchain Transactions Are + * Understand What Blockchain Is + +## What is Bitcoin? + +Bitcoin is a system that allows for the transfer of the bitcoin currency. It is enabled by a peer-to-peer system of nodes, which include full nodes, wallets, and miners. Working together, they ensure that bitcoin transactions are fast and non-repudiable. + +### How Are Coins Transferred? + +Bitcoin currency isn't physical coins. Instead it's an endless series of ownership reassignments. When one person sends coins to another, that transfer is stored as a transaction. It's the transaction that actually records the ownership of the money, not any token or record local to your wallet or your machine. + +### How Are Transactions Stored? + +Transactions are built into blocks of data, which are stored on the network. These blocks are built in such a way that they can not be replaced or rewritten once a few more blocks have been built after them. This is what makes bitcoins non-repudiable: the decentralized global ledger where everything is recorded is effectively a permanent and unchangeable database. + +However, the process of building these blocks is stochastic: it's somewhat random, and so you can never be assured that a transaction will be placed in a specific block. Moreso, there can be changes in blocks if they're very recent, but only if they're _very_ recent. + +### How Are Transactions Protected? + +The funds contained in each Bitcoin transaction are locked with a cryptographic puzzle. These puzzles are typically designed in such a way that they can be easily opened up by the person who the funds were sent to. This is done using the power of public-key cryptography. + +### So, What is Bitcoin!? + +One way to think of Bitcoin is as: a sequence of atomic transactions, each of which is enabled by the sender with the solution to a cryptographic puzzle, and is then locked for the recipient with a new cryptographic puzzle, where all those transactions are recorded in a permanent global ledger. + Bitcoin - cash - transactions @@ -15,3 +54,4 @@ Payment to Different Sorts of People Blockchain - hashes connecting blocks - into a long chain +Is It Right For You