Bitcoin Protocol
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Author:  RobertPearson [ Fri Dec 20, 2013 2:13 pm ]
Post subject:  Bitcoin Protocol

I thought this might be of interest to some:

How the Bitcoin Protocol Actually Works.

Many thousands of articles have been written purporting to explain Bitcoin, the online, peer-to-peer currency. Most of those articles give a hand-wavy account of the underlying cryptographic protocol, omitting many details. Even those articles which delve deeper often gloss over crucial points. My aim in this post is to explain the major ideas behind the Bitcoin protocol in a clear, easily comprehensible way. We’ll start from first principles, build up to a broad theoretical understanding of how the protocol works, and then dig down into the nitty-gritty, examining the raw data in a Bitcoin transaction.

Understanding the protocol in this detailed way is hard work. It is tempting instead to take Bitcoin as given, and to engage in speculation about how to get rich with Bitcoin, whether Bitcoin is a bubble, whether Bitcoin might one day mean the end of taxation, and so on. That’s fun, but severely limits your understanding. Understanding the details of the Bitcoin protocol opens up otherwise inaccessible vistas. In particular, it’s the basis for understanding Bitcoin’s built-in scripting language, which makes it possible to use Bitcoin to create new types of financial instruments, such as smart contracts. New financial instruments can, in turn, be used to create new markets and to enable new forms of collective human behaviour. Talk about fun

Author:  PeterScott [ Fri Dec 20, 2013 10:41 pm ]
Post subject:  Re: Bitcoin Protocol

Thanks. Bitcoin is one of those rare things that may turn out to be extremely big. I just can't tell right now.

Author:  DanHenderson [ Tue Dec 24, 2013 11:44 am ]
Post subject:  Re: Bitcoin Protocol

Then there's this cautionary tale:
An unlucky British man is regretting discarding an old laptop hard drive after realizing it contained over $7.5m worth of Bitcoins. James Howells, from South Wales, originally mined his 7,500 coins in 2009, when Bitcoins were worth a fraction of their current value.

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