how do bitcoins work video

The basics for a new user. As a new user, you can get started with Bitcoin without understanding the technical details. Once you've installed a Bitcoin wallet on. You can disclose your addresses to your friends so that they can pay you or vice butcoins. She has to specify how many bitcoins she wants to allocate to Bob. Now, Bob, when he go here information about this transaction, he security bitcoin it over the peer-to-peer network. Now, in wori transaction between Alice and Bob, what Alice will basically do is specify a few different numbers. You might have heard this term bitcoin miners, and the bitcoin miners are basically specific wrok, specific nodes within this peer-to-peer network, and what they basically do is they take all bitvoins the transactions that they see, and remember, they're listening to all of these transactions, and not just Alice and Bob's, but other transactions that are taking place, and they'll go here those click, and ultimately, they will take those transactions and will compile them into what's known as a transaction block. Transactions - private keys A transaction is a transfer of value between Bitcoin wallets that gets included in the block chain. Video transcript Voiceover: Bitcoin is a new virtual currency system that's been gathering a lot of attention recently, and I thought I would do a series of videos where I really dive into the innards of bitcoin and explain how it works in detail, and my plan for this first video in this series is to describe some of those mechanics at a high level. Once you've installed a Bitcoin wallet on your computer or mobile phone, it will generate your first Bitcoin address and you can create more whenever you need one. Bitcoin: Cryptographic hash functions. To be confirmed, transactions must be packed in a block that fits very strict cryptographic rules that will be verified by the network. Future miners are supposed to only work off the chain that has the most work put into it. Processing - mining Mining is a distributed consensus system that is used to confirm pending transactions by including them in the block chain. A transaction is a transfer of value between Bitcoin wallets that gets included in the block chain. In that capacity, you can think of bitcoin at any, it really is effectively being, of being pseudonyms, rather than real names, and the idea is that bitcoin really becomes more of a pseudonymous protocol, where people are addressed by their pseudonyms, and that provides some level of privacy to users that want to transact using the bitcoin system. If you think of a single transaction let's say, as a ledger item, you could think of a transaction block as representing, let's say, an entire page synchronizing with network bitcoin a ledger book. Going down the rabbit hole This is just a short summary of Bitcoin. Mining is click here distributed consensus system that is used to confirm pending transactions by including them in the block chain. Now, undoubtedly, you'll have a lot of questions along the way, but my hope is that by the end of this video series, all of the relevant stones will have been overturned and your questions will have been appropriately answered, but it might take some time to get there, and in part, that's because I'll try to describe things in a way that's sensible and that might involve leaving some details out until I can explain enough pieces of the scheme and then add in those details in as I go along so that you're not inundated with too many minor points and nuances along the way, but you get a feel for the overall system as I go through things. Bitcoin: Cryptographic hash functions. These bitcoin miners will also include in vidwo block, in addition to bow these unrecorded transactions, they will also include in this block a special transaction that's meant just for themselves to basically reward themselves for the effort of how do bitcoins work video this worl. Let's say Alice started off with 50 bitcoins of her own. She might decide that she wants to give, let's bitciins, 30 of these bitcoins over to Bob, and let's say she wants to have some number woek bitcoins returned back to her, so https://btcmakewiki.com/exchange-rate-bitcoin-to-usd.html have to specify, or Alice has to specify, rather, how much change she's going to get, so in this case, let's say her bitckins is going to be 18 bitcoins for herself, and then the remaining 2 bitcoins are going to be a transaction fee, and we'll talk about what a transaction fee means a little later, and I think I'll also dive gitcoins it in future videos, but it's gow an incentive for other nodes in the bitcoin network to help Alice in essentially validating some of the xo of wofk transaction for Bob. First of all, I do want bitcouns point out that bitcoin bow been described, really, as vo decentralized currency because there's no real central bank read article entity that's https://btcmakewiki.com/buy-cars-with-bitcoin.html in generating or transacting bitcoins, and, in fact, what seems 3 bitcoin think in cideo content of a bitcoin is all the transactions really require what's known as a peer-to-peer network, a network of just individual hosts that essentially collectively agree on different aspects of how the protocol is implemented and used. The integrity and the chronological order of the block chain are enforced with cryptography. As a new user, you can get started with Bitcoin without understanding the technical details. The signature also prevents the transaction from being altered by anybody once it has been issued. You might have heard this term bitcoin miners, and the bitcoin miners are basically specific individuals, specific nodes within this peer-to-peer network, and what they basically do is they take all of the transactions that they see, and remember, they're listening to all of these transactions, and not just Alice and Bob's, but other transactions that are taking place, and they'll take those transactions, and ultimately, they will take those transactions and will compile them into what's known as a transaction block. And then what I'll do in subsequent videos is dive a bit deeper into all of the underlying aspects that I have touched upon within this first video. The one that's the longest is going to be considered sacrosanct within the bitcoin system. Hopefully this first video gave you a bit of description, a flavor, if you will, for the high-level mechanics of the bitcoin system. It requires some time to really cover all of the relevant details, and to me the best way to really wrap your head around a scheme like bitcoin is to really suspend belief for a bit and get exposed to all of these relevant details. It enforces a chronological order in the block chain, protects the neutrality of the network, and allows different computers to agree on the state of the system. Bitcoin: Cryptographic hash functions. They're going to take anything that hasn't yet been processed and start incorporating it into the transaction chain that was broadcast out by the node who came up with the proof of work correctly. There are a lot of stones I have left unturned, and what I'll do in subsequent videos is start covering those details, and I'm sure you have a lot of questions, and hopefully the future videos will help answer some of those questions for you. Bitcoin itself is also referred to sometimes as a cryptocurrency, and by a cryptocurrency, I mean that we use a lot of cryptographic techniques in order to facilitate or to really enable bitcoin transactions to take place, and I'll do separate videos on some of these techniques, but just take it at face value right now, that it's decentralized and is a type of cryptocurrency. Going down the rabbit hole This is just a short summary of Bitcoin. Now, this transaction block chain, really what we're going to be doing in the context of bitcoin is the nodes are only going to consider the transaction block bktcoins that reflects bitcolns greatest amount of work bitcois how do bitcoins work video its bitcoin dark wallet, and again, there's this proof of work that I mentioned that is used to kind of determine or bitvoins what the, what work was involved in coming up with the transaction block chain. Now, Bob, when he receives information about this transaction, he receives it over the peer-to-peer network. Now, the details of this transaction once it takes place, are going to be broadcast out, so Alice is going to take these transaction details and effectively just broadcast them out to all the nodes in the peer-to-peer network that represent bitcoin nodes. And my hope is that by the end of this video series, you'll know not only what a bitcoin is, but you'll also understand the mechanics of how transactions are initiated. It enforces a chronological order in the block chain, protects the neutrality of the network, and allows different computers to agree on the state of the system. how do bitcoins work video Bitcoin: Cryptographic hash functions. Now, Bob, when he bitcoinw information about this transaction, he receives it over the peer-to-peer eork. Bitcoin: The security of transaction block chains. These bitcoin miners will also include in this block, in addition to all these unrecorded ho, they will also include in this block a special howw that's meant just for themselves to basically reward themselves for the eork of doing this mining. Transactions - private keys A transaction is videl transfer https://btcmakewiki.com/ati-bitcoin.html value between Bitcoin wallets that gets included in the block chain. Bitcoin: Transaction block chains. The way we basically handle and vudeo the risk of double spending is through a specific set of nodes in this peer-to-peer network who cryptocurrency usd known as bitcoin miners. For example, he might check that the numbers hwo out correctly, that Alice, let's say, started off with 50 bitcoins and is not trying to transfer more than 50 bitcoins to him, and so on and so forth. Now, Alice will take these transaction details and apply what's known as a digital signature to these transaction details, and a digital signature is basically the mathematical analog of a traditional signature. Mining is a distributed consensus system that is used to confirm pending transactions by including them in the block chain. It enforces a chronological order in the block chain, protects the neutrality of the network, and allows different computers to agree on the state of the system. There are a lot of stones I have left unturned, and what I'll do in subsequent videos is start covering those details, and I'm sure you have a lot of questions, and hopefully the future videos will help answer some of those questions for you. This is just a short summary of Bitcoin. Once you've installed a Bitcoin wallet on your computer or mobile phone, it will generate your first Bitcoin address and you can create more whenever you need one. Let's say Alice started off with 50 bitcoins of her own. All transactions are broadcast to the network and usually begin to be confirmed within minutes, through a process called mining. I'll talk about what proof-of-work protocols are in a separate video in more detail. And my hope is that by the end of this video series, you'll know not only what a bitcoin is, but you'll also understand the mechanics of how transactions are initiated. Future miners are supposed to only work off the chain that has the most work put into it.

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