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Simplifying bitcoin for the masses.
- Thread starter peilthetraveler
- Start date
You mine bitcoins by solving equations/problems?
Are these problems somebody needs to have solved or just an exercise?
Are these problems somebody needs to have solved or just an exercise?
Didn't help.
I'll try to explain as simply as I can..
You mine blocks. Each block has a lock on it. You have to solve the equation to open the block and see if there are bitcoins inside. When you open the lock on the block, you either get bitcoins, or get nothing and move on to the next block.
The equations you are solving only have to do with the blocks...you are not solving some equation that will explain the mysteries of the universe or anything like that.
Not sure if that helps. I know when you first learn about bitcoin, its very hard to wrap your head around all the new terminology like block, blockchain, block hash, transaction hash, bitcoin node, ect.
Not sure if you are old enough to remember or not, but when the internet first came out, it was the same thing with everyone. You had to learn terms like ISP, Modem, world wide web, login, upload, download...all terms that are very familiar and simple now, but in the early 90s those terms were like greek to everyone.
You mine blocks. Each block has a lock on it. You have to solve the equation to open the block and see if there are bitcoins inside. When you open the lock on the block, you either get bitcoins, or get nothing and move on to the next block.
The equations you are solving only have to do with the blocks...you are not solving some equation that will explain the mysteries of the universe or anything like that.
Not sure if that helps. I know when you first learn about bitcoin, its very hard to wrap your head around all the new terminology like block, blockchain, block hash, transaction hash, bitcoin node, ect.
Not sure if you are old enough to remember or not, but when the internet first came out, it was the same thing with everyone. You had to learn terms like ISP, Modem, world wide web, login, upload, download...all terms that are very familiar and simple now, but in the early 90s those terms were like greek to everyone.
Quote from Scataphagos:
Didn't help.
it solves the problem to hand over the public key that along with the private key you get with the transaction will open up your coin ( I may be off, but that's my understanding). The problem solving just makes sure that the public key is legit by making sure that the bitcoin inside that transaction hasn't been double spent. Hence the reason its more than just the coin but more about the power behind it..the network. The HOI's of this world
Some of the answers above is not 100% correct.
1) Visualize bitcoin network as a stack of linked pages
2) Each page records some of the most recent transactions (ie: address 1 sent x bitcoin to address 2). Once recorded, those can never be changed.
3) New pages are added at the end of the stack as they are unlocked. To unlock, computers compete to guess (not solve, 1 of the great misconceptions) the correct hash (sha-256) of the page . Once the lucky computer guessed it right meaning the answer(called hash) is verified by the other computers, the said computer is awarded with the bitcoins in that page, which now becomes part of the network and is put into "circulation".
4) The newly unlocked page is added to the end of the stack with the most recent transactions and also a record of the new bitcoins released, for those bitcoins this will be their very first transaction - creation. So each bitcoin can be traced all the way back to the page it was created on.
5) Each page unlocked rewards the computer that did it with 50 bitcoin, that reward is halved every 210000(i think) new pages, that takes approx 4 years to unlock. Right now the network already unlocked >210000 pages, so the new pages unlocked only give 25 bitcoin as reward. After 210000 more pages are unlocked in 2-3 years, each page will only give 12.5 bitcoins etc..putting a cap on max.
Now replace with bitcoin terms: page = block, stack of linked pages = block chains.
That's pretty much it in a nutshell, it is an absolutely brilliant design, whoever came up with it is a true genius, too bad we dont know who it is.
This basically provides a complete audit trail for every single transaction since day 1 out of the box for free, it also protects the network as more computers try to solve those problems.
When dramaticist‎ like pekelo says 51% attack, what they really mean is someone that controls 51% of all the computers in the network, can make those computers give false info when a page is unlocked. So a computer can guess a wrong answer, and the 51% bad computers can lie and say that is correct, while 49% of the good computers says incorrect as expected, but since 51% > 49% the wrong answer becomes correct and the page is unlocked and recorded. If this continues for a long time, then you will have many wrong unlocked page and the network is destroyed, but short term it is not as a big issue as once the good computers becomes 51% again they can correct the validation going forward, also all the old pages are not touched.
1) Visualize bitcoin network as a stack of linked pages
2) Each page records some of the most recent transactions (ie: address 1 sent x bitcoin to address 2). Once recorded, those can never be changed.
3) New pages are added at the end of the stack as they are unlocked. To unlock, computers compete to guess (not solve, 1 of the great misconceptions) the correct hash (sha-256) of the page . Once the lucky computer guessed it right meaning the answer(called hash) is verified by the other computers, the said computer is awarded with the bitcoins in that page, which now becomes part of the network and is put into "circulation".
4) The newly unlocked page is added to the end of the stack with the most recent transactions and also a record of the new bitcoins released, for those bitcoins this will be their very first transaction - creation. So each bitcoin can be traced all the way back to the page it was created on.
5) Each page unlocked rewards the computer that did it with 50 bitcoin, that reward is halved every 210000(i think) new pages, that takes approx 4 years to unlock. Right now the network already unlocked >210000 pages, so the new pages unlocked only give 25 bitcoin as reward. After 210000 more pages are unlocked in 2-3 years, each page will only give 12.5 bitcoins etc..putting a cap on max.
Now replace with bitcoin terms: page = block, stack of linked pages = block chains.
That's pretty much it in a nutshell, it is an absolutely brilliant design, whoever came up with it is a true genius, too bad we dont know who it is.
This basically provides a complete audit trail for every single transaction since day 1 out of the box for free, it also protects the network as more computers try to solve those problems.
When dramaticist‎ like pekelo says 51% attack, what they really mean is someone that controls 51% of all the computers in the network, can make those computers give false info when a page is unlocked. So a computer can guess a wrong answer, and the 51% bad computers can lie and say that is correct, while 49% of the good computers says incorrect as expected, but since 51% > 49% the wrong answer becomes correct and the page is unlocked and recorded. If this continues for a long time, then you will have many wrong unlocked page and the network is destroyed, but short term it is not as a big issue as once the good computers becomes 51% again they can correct the validation going forward, also all the old pages are not touched.
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Addition: the Hash of one block is also input for the next block Hash. This makes a string of very strong verified blocks. The longer the string the more sure it is that transactions are 100% correct. This is why a 51% attack is more difficult (if not impossible) over more blocks than just one last block. And this is also why you should wait for at least 6 block confirmations before you can be sure your transaction is secured.
You guys are not explaining it simply for people new to bitcoin. All that bitcoin jargon makes newbies heads explode. Sure it sounds easy enough to understand for those of us that have been around bitcoin for a while, but for someone brand new, you pretty much might as well be speaking in tongues.
I agree. New guys should watch the video's of this teacher:
http://www.youtube.com/channel/UCgo7FCCPuylVk4luP3JAgVw/videos