You can download the Reference Client, also known as _Bitcoin Core_ from bitcoin.org. The reference client implements all aspects of the bitcoin system, including wallets, a transaction verification engine with a full copy of the entire transaction ledger (blockchain) and a full network node in the peer-to-peer bitcoin network.
Go to http://bitcoin.org/en/choose-your-wallet and select "Bitcoin Core" to download the reference client. Depending on your operating system, you will download an executable installer. For Windows, this is either a ZIP archive or an EXE executable. For Mac OS it is DMG disk image. Linux versions include a PPA package for Ubuntu or a TAR.GZ archive.
If you download an installable package, such as an EXE, DMG or PPA, you can install it the same way as any application on your operating system. For Windows, run the EXE and follow the step-by-step instructions. For Mac OS, launch the DMG and drag the Bitcoin-QT icon into your Applications folder. For Ubuntu, double-click on the PPA in your File Explorer and it will open the package manager to install the package. Once you have completed installation you should have a new application "Bitcoin-Qt" in your application list. Double-click on the icon to start the bitcoin client.
The first time you run Bitcoin Core it will start downloading the blockchain, a process that may take several days. Leave it running in the background until it displays "Synchronized" and no longer shows "Out of sync" next to the balance.
Bitcoin Core keeps a full copy of the transaction ledger (blockchain), with every transaction that has ever occurred on the bitcoin network since its inception in 2009. This dataset is several gigabytes in size (approximately 16GB in late 2013) and is downloaded incrementally over several days. The client will not be able to process transactions or update account balances until the full blockchain dataset is downloaded. During that time, the client will display "Out of sync" next to the account balances and show "Synchronizing" in the footer. Make sure you have enough disk space, bandwidth and time to complete the initial synchronization.
For developers, there is also the option to download the full source code as a ZIP archive or by cloning the authoritative source repository from Github. Go to https://github.com/bitcoin/bitcoin and select "Download ZIP" from the sidebar. Alternatively, use the git command line to create a local copy of the source code on your system. In the example below, we are cloning the source code from a unix-like command-line, in Linux or Mac OS:
The instructions and resulting output may vary from version to version. Follow the documentation that comes with the code even if it differs from the instructions you see here and don't be surprised if the output displayed on your screen is slightly different from the examples here.
When the git cloning operation has completed, you will have a complete local copy of the source code repository in the directory _bitcoin_. Change to this directory by typing +cd bitcoin+ at the prompt:
By default, the local copy will be synchronized with the most recent code which may be an unstable or "beta" version of bitcoin. Before compiling the code, we want to select a specific version by checking out a release _tag_. This will synchronize the local copy with a specific snapshot of the code repository identified by a keyword tag. Tags are used by the developers to mark specific releases of the code by version number. First, to find the available tags, we use the +git tag+ command:
The list of tags shows all the released versions of bitcoin. By convention, _release candidates_, which are intended for testing, have the suffix "rc". Stable releases that can be run on production systems have no suffix. From the list above, we select the highest version release, which at this time is v0.9.0rc1. To synchronize the local code with this version, we use the +git checkout+ command:
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$ git checkout v0.9.0rc1
Note: checking out 'v0.9.0rc1'.
HEAD is now at 15ec451... Merge pull request #3605
The source code includes documentation, which can be found in a number of files. Review the main documentation located in README.md in the bitcoin directory by typing +more README.md+ at the prompt and using the space bar to progress to the next page. In this chapter we will build the command-line bitcoin client, also known as +bitcoind+ on Linux. Review the instructions for compiling the bitcoind command-line client on your platform by typing +more doc/build-unix.md+. Alternative instructions for Mac OSX and Windows can be found in the doc directory, as +build-os.md+ or +build-msw.md+ respectively.
Carefully review the build pre-requisites which are in the first part of the build documentation. These are libraries that must be present on your system before you can begin to compile bitcoin. If these pre-requisites are missing the build process will fail with an error. If this happens because you missed a pre-requisite, you can install it and then resume the build process from where you left off. Assuming the pre-requisites are installed, we start the build process by generating a set of build scripts using the +autogen.sh+ script.
The bitcoind build process was changed to use the autogen/configure/make system starting with version 0.9. Older versions use a simple Makefile and work slightly differently from the example below. Follow the instructions for the version you want to compile. The autogen/configure/make introduced in 0.9 is likely to be the build system used for all future versions of the code and is the system demonstrated in the examples below.
The +autogen.sh+ script creates a set of automatic configuration scripts that will interrogate your system to discover the correct settings and ensure you have all the necessary libraries to compile the code. The most important of these is the +configure+ script that offers a number of different options to customize the build process. Type +./configure --help+ to see the various options:
The +configure+ script allows you to enable or disable certain features of bitcoind through the use of the +--enable-FEATURE+ and +--disable-FEATURE+ flags, where +FEATURE+ is replaced by the feature name, as listed in the help output above. In this chapter, we will build the bitcoind client with all the default features. We won't be using the configuration flags, but you should review them to understand what optional features are part of the client. Next, we run the +configure+ script to automatically discover all the necessary libraries and create a customized build script for our system:
If all goes well, the +configure+ command will end by creating the customized build scripts that will allow us to compile bitcoind. If there are any missing libraries or errors, the +configure+ command will terminate with an error instead of creating the build scripts as shown above. If an error occurs, it is most likely a missing or incompatible library. Review the build documentation again and make sure you install the missing pre-requisites. Then run +configure+ again and see if that fixes the error. Next, we will compile the source code, a process that can take up to an hour to complete. During the compilation process you should see output every few seconds or every few minutes, or an error if something goes wrong. The compilation process can be resumed at any time if interrupted. Type +make+ to start compiling:
We can confirm that bitcoin is correctly installed, as follows:
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$ which bitcoind
/usr/local/bin/bitcoind
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The default installation of bitcoind puts it in +/usr/local/bin+. When we first run bitcoind it will remind us to create a configuration file with a strong password for the JSON-RPC interface. We run it by typing +bitcoind+ into the terminal:
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$ bitcoind
Error: To use the "-server" option, you must set a rpcpassword in the configuration file:
/home/ubuntu/.bitcoin/bitcoin.conf
It is recommended you use the following random password:
Edit the configuration file in your preferred editor and set the parameters, replacing the password with a strong password as recommended by bitcoind. Do *not* use the password shown below. Create a file inside the +.bitcoin+ directory so that it is named +.bitcoin/bitcoin.conf+ and enter a username and password:
The reference client bitcoind offers a number of commands that can be run from the command line. These are the same commands as those offered via the JSON-RPC API, so the command line allows us to experiment interactively with the capabilities that are also available programmatically. To start, we can invoke the +help+ command to see a list of the available bitcoin commands:
Now, run the bitcoin client. The first time you run it the bitcoin blockchain will be rebuilt. This is a multi-gigabyte file and will take on average 2 days to download in full. You can shorten the blockchain initialization time by downloading a partial copy of the blockchain using bittorrent from +http://sourceforge.net/projects/bitcoin/files/Bitcoin/blockchain/+.
The data is returned in JavaScript Object Notation (JSON), a format which can easily be "consumed" by all programming languages but is also quite human-readable. Among this data we see the version of the bitcoin software client (90000), protocol (70002) and wallet version (60000). We see the current balance contained in the wallet, which is zero. We see the current block height, showing us how many blocks are known to this client, 286216. We also see various statistics about the bitcoin network and the settings related to this client. We will explore these settings in more detail in the rest of this chapter.
It will take some time, perhaps more than a day, for the bitcoind client to "catch up" to the current blockchain height as it downloads blocks from other bitcoin clients. You can check its current progress using getinfo to see the number of known blocks.
Before we proceed with creating keys and other commands, we will first encrypt the wallet with a password. For this example, we use the +encryptwallet+ command with the password "foo". Obviously, replace "foo" with a strong and complex password!
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$ bitcoind encryptwallet foo
wallet encrypted; Bitcoin server stopping, restart to run with encrypted wallet. The keypool has been flushed, you need to make a new backup.
We can verify the wallet has been encrypted by running +getinfo+ again. This time you will notice a new entry +unlocked_until+ which is a counter showing how long the wallet decryption password will be stored in memory, keeping the wallet unlocked. At first this will be set to zero, meaning the wallet is locked:
To unlock the wallet, we issue the +walletpassphrase+ command that takes two parameters, the password and a number of seconds until the wallet is locked again automatically (a time counter):
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$ bitcoind walletpassphrase foo 360
$
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Confirm the wallet is unlocked and see the timeout by running +getinfo+ again:
Next, we will practice creating a wallet backup file and then restoring the wallet from the backup file. Use the +backupwallet+ command to backup, providing the file name as the parameter. Here we backup the wallet to the file +wallet.backup+:
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$ bitcoind backupwallet wallet.backup
$
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Now, to restore the backup file, use the +importwallet+ command. If your wallet is locked, you will need to unlock it first (see +walletpassphrase+ above) in order to import the backup file:
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$ bitcoind importwallet wallet.backup
$
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The +dumpwallet+ command can be used to dump the wallet into a text file that is human-readable:
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$ bitcoind dumpwallet wallet.txt
$ more wallet.txt
# Wallet dump created by Bitcoin v0.9.0rc1-beta (2014-01-31 09:30:15 +0100)
# * Created on 2014-02- 8dT20:34:55Z
# * Best block at time of backup was 286234 (0000000000000000f74f0bc9d3c186267bc45c7b91c49a0386538ac24c0d3a44),
The bitcoin reference client maintains a pool of addresses, the size of which is displayed by +keypoolsize+ when you use the command +getinfo+. These addresses are generated automatically and can then be used as public receiving addresses or change addresses. To get one of these addresses, you can use the +getnewaddress+ command:
Now, we can use this address to send a small amount of bitcoin to our bitcoind wallet from an external wallet (assuming you have some bitcoin in an exchange, web wallet or other bitcoind wallet held elsewhere). For this example, we will send 50 milliBits (0.050 bitcoin) to the address returned above.
We can now query the bitcoind client for the amount received by this address, and specify how many confirmations are required before an amount is counted in that balance. For this example, we will specify zero confirmations. A few seconds after sending the bitcoin from another wallet, we will see it reflected in the wallet. We use +getreceivedbyaddress+ with the address and the number of confirmations set to zero (0):
If we omit the zero from the end of this command, we will only see the amounts that have at least +minconf+ confirmations, where +minconf+ is the setting for the minimum number of confirmations before a transaction is listed in the balance. The +minconf+ setting is specified in the bitcoind configuration file. Since the transaction sending this bitcoin was only sent in the last few seconds, it has still not confirmed and therefore we will see it list a zero balance:
Finally, the command +getbalance+ will show the total balance of the wallet, adding up all transactions confirmed with at least +minconf+ confirmations:
If the transaction has not yet confirmed, the balance returned by getbalance will be zero. The configuration option "minconf" determines the minimum number of confirmations that are required before a transaction shows in the balance.
We'll now explore the incoming transaction that was listed above using the +gettransaction+ command. We can retrieve a transaction by its transaction hash, shown at +txid+, above with the +gettransaction+ command:
Transaction IDs are not authoritative until a transaction has been confirmed. Absence of a transaction hash in the blockchain does not mean the transaction was not processed. This is known as "transaction malleability", as transaction hashes can be modified prior to confirmation in a block. After confirmation, the txid is immutable and authoritative.
====
The transaction form shown above with the command +gettransaction+ is the simplified form. To retrieve the full transaction code and decode it we will use two commands, +getrawtransaction+ and +decoderawtransaction+. First, +getrawtransaction+ takes the transaction hash (txid) as a parameter and returns the full transaction as a "raw" hex string, exactly as it exists on the bitcoin network:
To decode this hex string, we can use the +decoderawtransaction+ command. Copy and paste the hex as the first parameter of +decoderawtransaction+ to get the full contents interpreted as a JSON data structure (for formatting reasons the hex string is shortened in the example below):
The transaction decode shows all the components of this transaction, including the transaction inputs and outputs. In this case we see that the transaction that credited our new address with 50 milliBits used one input and generated two outputs. The input to this transaction was the output from a previously confirmed transaction (shown as the vin txid starting with +d3c7+ above). The two outputs correspond to the 50 millibit credit and an output with change back to the sender.
We can further explore the blockchain by examining the previous transaction referenced by its txid in this transaction using the same commands (eg. +gettransaction+). Jumping from transaction to transaction we can follow a chain of transactions back as the coins are transmitted from owner address to owner address.
Once the transaction we received has been confirmed by inclusion in a block, the +gettransaction+ command will return additional information, showing the block hash (identifier) in which the transaction was included:
Above, we see the new information in the entries +blockhash+, the hash of the block in which the transaction was included, and +blockindex+ with value 18, indicating that our transaction was the 18th transaction in that block.
Now that we know which block our transaction was included in, we can query that block. We use the +getblock+ command with the block hash as the parameter:
The block contains 367 transactions and as you see above, the 18th transaction listed (+9ca8f9...+) is the txid of the one crediting 50 milliBits to our address. The +height+ entry tells us this is the 286384th block in the blockchain.
We can also retrieve a block by its block height using the +getblockhash+ command, which takes the block height as the parameter and returns the block hash for that block:
Bitcoin's transactions are based on the concept of spending "outputs", which are the result of previous transactions, to create a transaction chain that transfers ownership from address to address. Our wallet has now received a transaction that assigned one such output to our address. Once this is confirmed, we can now spend that output.
We see that the transaction +9ca8f9...+ created an output (with vout index 0) assigned to the address +1hvzSo...+ for the amount of 50 millibits, which at this point has received 7 confirmations. Transactions use previously created outputs as their inputs by referring to them by the previous txid and vout index. We will now create a transaction that will spend the 0th vout of the txid +9ca8f9...+ as its input and assign it to a new output that sends value to a new address.
First, let's look at the specific output in more detail. We use the +gettxout+ to get the details of this unspent output above. Transaction outputs are always referenced by txid and vout and these are the parameters we pass to +gettxout+:
What we see above is the output that assigned 50 millibits to our address +1hvz...+. To spend this output we will create a new transaction. First, let's make an address to send the money to:
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$ bitcoind getnewaddress
1LnfTndy3qzXGN19Jwscj1T8LR3MVe3JDb
----
We will send 25 millibits to the new address +1LnfTn...+ we just created in our wallet. In our new transaction, we will spend the 50 millibit output and send 25 millibits to this new address. Because we have to spend the *whole* output from the previous transaction, we must also generate some change. We will generate change back to the +1hvz...+ address, sending the change back to the address from which the value originated. Finally, we will also have to pay a fee for this transaction. To pay the fee, we will reduce the change output by 0.5 millibits, and return 24.5 millibits in change. The difference between the sum of the new outputs (25mBTC + 24.5mBTC = 49.5mBTC) and the input (50mBTC) will be collected as a transaction fee by the miners.
We use the +createrawtransaction+ to create the transaction described above. As parameters to +createrawtransaction+ we provide the transaction input (the 50 millibit unspent output from our confirmed transaction) and the two transaction outputs (money sent to the new address and change sent back to the previous address):
The +createrawtransaction+ command produces a raw hex string that encodes the transaction details we supplied. Let's confirm everything is correct by decoding this raw string using the +decoderawtransaction+ command:
That looks correct! Our new transaction "consumes" the unspent output from our confirmed transaction and then spends it in two outputs, one for 25 millibits to our new address and one for 24.5 millibits as change back to the original address. The difference of 0.5 millibits represents the transaction fee and will be credited to the miner who finds the block that includes our transaction.
As you may notice, the transaction contains an empty +scriptSig+ because we haven't signed it yet. Without a signature, this transaction is meaningless, we haven't yet proven that we *own* the address from which the unspent output is sourced. By signing, we remove the encumberance on the output and prove that we own this output and can spend it. We use the +signrawtransaction+ command to sign the transaction. It takes the raw transaction hex string as the parameter.
Now, the inputs used in the transaction contain a +scriptSig+, which is a digital signature proving ownership of address +1hvz...+ and removing the encumberance on the output so that it can be spent. The signature makes this transaction verifiable by any node in the bitcoin network.
Now it's time to submit the newly created transaction to the network. We do that with the command +sendrawtransaction+ which takes the raw hex string produced by +signrawtransaction+. This is the same string we just decoded above:
The command +sendrawtransaction+ returns a transaction hash (txid) as it submits the transaction on the network. We can now query that transaction id with +gettransaction+:
As before, we can also examine this in more detail using the +getrawtransaction+ and +decodetransaction+ commands. These commands will return the exact same hex string that we produced and decoded previously just before we sent it on the network.
Beyond the reference client, bitcoind, there are other clients and libraries that can be used to interact with the bitcoin network and data structures. These are implemented in a variety of programming languages, offering programmers native interfaces in their own language.
Alternative implementations include:
* libbitcoin and sx tools, a C++ multi-threaded full node client and library with command-line tools (https://libbitcoin.dyne.org/)
* bitcoinj, a Java full node client library (https://code.google.com/p/bitcoinj/)
* btcd, a Go language full node bitcoin client (https://opensource.conformal.com/wiki/btcd)
* Bits of Proof (BOP), a Java enterprise-class implementation of bitcoin (https://bitsofproof.com)
* picocoin, a C implementation of a light-weight client library for bitcoin (https://github.com/jgarzik/picocoin)
Many more libraries exist in a variety of other programming languages and more are created all the time.
The libbitcoin library is a C++ scalable multi-threaded and modular implementation that supports a full-node client and a command-line toolset named "sx", which offers many of the same capabilities as the bitcoind client commands we illustrated in this chapter. The sx tools also offer some key management and manipulation tools that are not offered by bitcoind, including type-2 deterministic keys and key mnemonics.
Generate a new private key with the operating system's random number generator by using the +newkey+ command. We save the standard output into the file +private_key+:
Now, generate the public key from that private key using the +pubkey+ command. Pass the +private_key+ file into the standard input and save the standard output of the command into a new file +public_key+:
The keys generated above are so called type-0 non-deterministic keys. That means that each one is generated from a random number generator. The sx tools also support type-2 deterministic keys, where a "master" key is created and then extended to produce a chain or tree of subkeys.
First, we generate a "seed" that will be used as the basis to derive a chain of keys, compatible with the Electrum wallet and other similar implementations. We use the +newseed+ command to produce a seed value:
With the seed, we can now generate a sequence of private and public keys, a key chain. We use the +genpriv+ command to generate a sequence of private keys from a seed and the +addr+ command to generate the corresponding public key.
With deterministic keys we can generate and re-generate thousands of keys, all derived from a single seed in a deterministic chain. This technique is used in many wallet applications to generate keys that can be backed up and restored with a simple multi-word mnemonic. This is easier than having to back up the wallet with all its randomly generated keys every time a new key is created.
The sx toolkit offers many useful commands for encoding and decoding addresses, converting to and from different formats and representations. Use them to explore the various formats such as base58, base58check, hex etc.
