Ok what is the blockchain… i mean really what is it_ _ bitcoinbeginners open source bitcoin

Imagine a bunch of students living in a big fraternity house.

They use a piggy bank to pay for common expenses.

Nobody wants to take charge as treasurer, so the fraternity has collectively agreed to obey the following rules:

Any student can deposit and withdraw money from the piggy bank at any time.

However, each transaction must be documented. If you make a deposit or withdrawal, you must write your name, the beneficiary’s name, and the amount on a post-it note. Then you must sign the post-it note and stick it to a large notice board in the frat house common room.

At the end of every week there is a gathering where all post-it notes are removed, verified against the actual amount in the piggy bank, and replaced by a single post-it note saying the total amount brought forward from last week.

Open source bitcoin

If a dishonest student attempts to steal money from the piggy bank it will be immediately obvious to everybody because the public ledger (the notice board) does not match the amount in the piggy bank.

If a dishonest student attempts to forge the transaction history on the notice board, it will also be immediately obvious to everybody, because he would either have to replace a post-it note with a forged signature, or remove a post-it note.

However, this system still suffers from a weakness: A dishonest student can still replace their own historical post-it note with a new one stating a different amount, and then claim that the original never existed.

To solve this problem, the fraternity came up with an ingenious solution:

Every day, the first student to solve a crossword puzzle from a selection of daily newspapers posts the solution of the puzzle on the notice board along with his signature.Open source bitcoin then, he takes a polaroid picture of the entire notice board, signs said picture and also posts it on the notice board. For this, the student gets a small reward.

Each day’s winner is immediately announced to all house members so that they can individually verify the signed picture.

If a dishonest student now wants to alter one of his historical transactions, the post-it note on the board will not match the note on the picture, and the fraud will again be immediately obvious to everybody.

The only way for the dishonest student to alter history is to solve a different cross word puzzle each day the transaction lies in the past, and re-take all the pictures and sign them with his own name.

But that is way too much work for the dishonest student, so he won’t be bothered.

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open source bitcoin

Hello fellow retard! 🙂 let me sum up what I´ve grasped so far:

• a bitcoin is a string of numbers, generated by a code that is designed to keep making these numbers up and getting them accredited really complicated (further reading: proof of work, whitepaper).

• the code is available at github and can be changed (i.E. Expanded), new software additions are called bitcoin improvement protocols (BIP and a number). A software engineer who makes a wallet app or a mining software can use them, but does not have to. If someone uses them and someone does not and they are still compatible that´s called a soft fork. Making changes to the core rules that are not universally implemented means creating a new blockchain (next paragraph), rivaling the original, creating a hard fork.

• the ledger: every transaction (tx) made, using the already existing bitcoins or parts of these, from one address to another (think adress equals wallet, but not exactly) gets published worldwide.Open source bitcoin big servers (nodes) gather the data and compete for a way to present them. A tx has a size of roughly 1kb. 2000 tx add up to a block of 1mb in size (see block size = 2MB; its debatable), which is the final, unchangeable documentation of transactions, that again is broadcasted. The node that does this the fastest (usually about 10min, but sometimes much faster) gets to write itself 12,5 new bitcoins to its account (it has mined them). There are roughly 16 million bitcoins in existence now, documented in a history of 460.000 and a bit blocks that started here in 09/2009.

• all the blocks are being stored in the blockchain. Every node that runs the compatible software has to have a valid copy of the whole tx history of the network in order to be qualified to do work. The blockchain still fits on an average household RAM (3-4GB total) but is constantly growing, for example during the last year it grew from 60gb to well over a hundred.Open source bitcoin

• if there are more than one blocks mined at the same time (network comunication is tolerant of 1-5 seconds) there is competition for recognition. The version of the chain with the most additions wins, the other one is orphaned. Usually the chain that is used of the majority of the nodes grows fastest – which is the security measure (against fraud or rogue software) in this decentralized network. Orphaned tx go back in the waiting line, the mempool.

• you, too, can make your home computer a server for the network, but it competes with super fast huge server centers. It is not impossible for you to make money using your electricity for the network (but said to be not worth it).

E: several edits, this starts to be fun

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A blockchain is a public ledger. Every single bitcoin transaction since the network began can be be found on the bitcoin blockchain.Open source bitcoin

Bitcoin rules are enforced by full nodes. Full nodes download blocks and transactions and check them against bitcoin’s consensus rules. If these rules are violated, the network will reject the block or transaction. You can run a full node on your home computer to help the network. Nodes can also function as wallets, which is where you may have gotten that idea.

Bitcoin is a free open source project. Many people have adjusted bitcoin’s code in some way and instead of trying to join bitcoin’s network, created their own network using their own ruleset. These alternate networks are often called ‘alt-coins’, some quite similar to bitcoin (though still differentiated), and some radically different.

So essentially, bitcoin is just a collection of rules, put into software, enforced by a decentralized network of nodes.Open source bitcoin there have been instances where bitcoin’s ‘rules’ have actually changed in order to improve or secure the network, but the core tenets remain unchanged. As an example, at this time there is quite a bit of controversy over changing one of bitcoin’s rules, the 1MB block size.

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