(UTXO)")))((("UTXO sets")))The use of Bitcoin's blockchain to store data
((("unspent transaction outputs
(UTXO)")))The use of Bitcoin's blockchain to store data
unrelated to Bitcoin payments is a controversial subject. Many
people consider such use abusive and want to discourage it. Others
view it as a demonstration of the powerful capabilities of blockchain
@ -739,7 +739,7 @@ expensive database operations.
OP_RETURN <data>
----
((("Proof of Existence")))((("DOCPROOF prefix")))The data portion
The data portion
often represents a hash, such as the output
from the SHA256 algorithm (32 bytes). Some applications put a prefix in
front of the data to help identify the application. For example, the
@ -769,7 +769,7 @@ being included in a block until a specific block height, but it does not
prevent spending the funds in another transaction earlier than that.
Let's explain that with the following example.
((("use cases", "buying coffee", id="alicesseven")))Alice signs a transaction spending one of her outputs to Bob's address, and sets the transaction lock time to 3 months in the future. Alice sends that transaction to Bob to hold. With this transaction Alice and Bob know that:
Alice signs a transaction spending one of her outputs to Bob's address, and sets the transaction lock time to 3 months in the future. Alice sends that transaction to Bob to hold. With this transaction Alice and Bob know that:
* Bob cannot transmit the transaction to redeem the funds until 3 months have elapsed.
* Bob may transmit the transaction after 3 months.
@ -783,7 +783,7 @@ It is important to understand the limitations of transaction lock time. The only
==== Check Lock Time Verify (OP_CLTV)
((("Check Lock Time Verify (OP_CLTV)", id="cltv07")))((("timelocks", "Check
((("timelocks", "Check
Lock Time Verify (OP_CLTV)")))((("scripting", "timelocks", "Check Lock Time
((("bitcoin improvement proposals", "types of")))Bitcoin Improvement Proposals are design documents providing information to the Bitcoin community, or for describing a new feature for Bitcoin or its processes or environment.
Bitcoin Improvement Proposals are design documents providing information to the Bitcoin community, or for describing a new feature for Bitcoin or its processes or environment.
As per BIP1 _BIP Purpose and Guidelines_, there are three kinds of BIPs:
@ -10,7 +10,7 @@ _Standard_ BIP:: Describes any change that affects most or all Bitcoin implement
_Informational_ BIP:: Describes a Bitcoin design issue, or provides general guidelines or information to the Bitcoin community, but does not propose a new feature. Informational BIPs do not necessarily represent a Bitcoin community consensus or recommendation, so users and implementors may ignore informational BIPs or follow their advice.
_Process_ BIP:: Describes a Bitcoin process, or proposes a change to (or an event in) a process. Process BIPs are like standard BIPs but apply to areas other than the Bitcoin protocol itself. They might propose an implementation, but not to Bitcoin's codebase; they often require community consensus; and unlike informational BIPs, they are more than recommendations, and users are typically not free to ignore them. Examples include procedures, guidelines, changes to the decision-making process, and changes to the tools or environment used in Bitcoin development. Any meta-BIP is also considered a process BIP.
((("bitcoin improvement proposals", "repository of")))BIPs are recorded in a versioned repository on GitHub: https://github.com/bitcoin/bips[https://github.com/bitcoin/bips].
BIPs are recorded in a versioned repository on GitHub: https://github.com/bitcoin/bips[https://github.com/bitcoin/bips].
An MIT-licensed document from the open source Bitcoin Core project,
reproduced here in edited form, describes which BIPs it implements, including listing
the Pull Request (PR) and version of Bitcoin Core where support for each BIP was added or
RIPEMD-160 is a 160-bit cryptographic hash function. RIPEMD-160 is a strengthened version of RIPEMD with a 160-bit hash result, and is expected to be secure for the next ten years or more.
satoshi::
A satoshi is the smallest denomination of bitcoin that can be recorded on the blockchain. It is the equivalent of 0.00000001 bitcoin and is named after the creator of Bitcoin, Satoshi Nakamoto. ((("satoshi")))
A satoshi is the smallest denomination of bitcoin that can be recorded on the blockchain. It is the equivalent of 0.00000001 bitcoin and is named after the creator of Bitcoin, Satoshi Nakamoto.
Satoshi Nakamoto::
Satoshi Nakamoto is the name used by the person or people who designed Bitcoin and created its original reference implementation, Bitcoin Core. As a part of the implementation, they also devised the first blockchain database. In the process they were the first to solve the double-spending problem for digital currency. Their real identity remains unknown.
((("bitcoin", "defined", id="GSdefine01")))Bitcoin is a collection of concepts and technologies that form the basis of a digital money ecosystem. Units of currency called bitcoin are used to store and transmit value among participants in the Bitcoin network. Bitcoin users communicate with each other using the Bitcoin protocol primarily via the internet, although other transport networks can also be used. The Bitcoin protocol stack, available as open source software, can be run on a wide range of computing devices, including laptops and smartphones, making the technology easily accessible.
Bitcoin is a collection of concepts and technologies that form the basis of a digital money ecosystem. Units of currency called bitcoin are used to store and transmit value among participants in the Bitcoin network. Bitcoin users communicate with each other using the Bitcoin protocol primarily via the internet, although other transport networks can also be used. The Bitcoin protocol stack, available as open source software, can be run on a wide range of computing devices, including laptops and smartphones, making the technology easily accessible.
[TIP]
====
@ -71,18 +71,18 @@ Behind the scenes, Bitcoin is also the name of the protocol, a peer-to-peer netw
* A decentralized peer-to-peer network (the Bitcoin protocol)
* A public transaction journal (the blockchain)
* ((("mining and consensus", "consensus rules", "satisfying")))A set of rules for independent transaction validation and currency issuance (consensus rules)
* A set of rules for independent transaction validation and currency issuance (consensus rules)
* A mechanism for reaching global decentralized consensus on the valid blockchain (Proof-of-Work algorithm)
As a developer, I see Bitcoin as akin to the internet of money, a network for propagating value and securing the ownership of digital assets via distributed computation. There's a lot more to Bitcoin than first meets the eye.
In this chapter we'll get started by explaining some of the main concepts and terms, getting the necessary software, and using Bitcoin for simple transactions. In the following chapters, we'll start unwrapping the layers of technology that make Bitcoin possible and examine the inner workings of the Bitcoin network and protocol.((("", startref="GSdefine01")))
In this chapter we'll get started by explaining some of the main concepts and terms, getting the necessary software, and using Bitcoin for simple transactions. In the following chapters, we'll start unwrapping the layers of technology that make Bitcoin possible and examine the inner workings of the Bitcoin network and protocol.
[role="pagebreak-before less_space"]
.Digital Currencies Before Bitcoin
****
((("digital currencies", "prior to bitcoin")))The emergence of viable digital money is closely linked to developments in cryptography. This is not surprising when one considers the fundamental challenges involved with using bits to represent value that can be exchanged for goods and services. Three basic questions for anyone accepting digital money are:
The emergence of viable digital money is closely linked to developments in cryptography. This is not surprising when one considers the fundamental challenges involved with using bits to represent value that can be exchanged for goods and services. Three basic questions for anyone accepting digital money are:
1. Can I trust that the money is authentic and not counterfeit?
2. Can I trust that the digital money can only be spent once (known as the “double-spend” problem)?
@ -92,13 +92,13 @@ Issuers of paper money are constantly battling the counterfeiting problem by usi
When cryptography started becoming more broadly available and understood in the late 1980s, many researchers began trying to use cryptography to build digital currencies. These early digital currency projects issued digital money, usually backed by a national currency or precious metal such as gold.
((("decentralized systems", "vs. centralized", secondary-sortas="centralized")))Although these earlier digital currencies worked, they were centralized and, as a result, were easy to attack by governments and hackers. Early digital currencies used a central clearinghouse to settle all transactions at regular intervals, just like a traditional banking system. Unfortunately, in most cases these nascent digital currencies were targeted by worried governments and eventually litigated out of existence. Some failed in spectacular crashes when the parent company liquidated abruptly. To be robust against intervention by antagonists, whether legitimate governments or criminal elements, a _decentralized_ digital currency was needed to avoid a single point of attack. Bitcoin is such a system, decentralized by design, and free of any central authority or point of control that can be attacked or corrupted.
Although these earlier digital currencies worked, they were centralized and, as a result, were easy to attack by governments and hackers. Early digital currencies used a central clearinghouse to settle all transactions at regular intervals, just like a traditional banking system. Unfortunately, in most cases these nascent digital currencies were targeted by worried governments and eventually litigated out of existence. Some failed in spectacular crashes when the parent company liquidated abruptly. To be robust against intervention by antagonists, whether legitimate governments or criminal elements, a _decentralized_ digital currency was needed to avoid a single point of attack. Bitcoin is such a system, decentralized by design, and free of any central authority or point of control that can be attacked or corrupted.
elegantly solves the issue of double-spend where a single currency unit
can be spent twice. Previously, the double-spend problem was a weakness
of digital currency and was addressed by clearing all transactions
@ -127,12 +127,12 @@ increased exponentially, and their combined computational power now
exceeds the combined number of computing operations of the
world's top supercomputers.
Satoshi Nakamoto withdrew from the public in April 2011, leaving the responsibility of developing the code and network to a thriving group of volunteers. The identity of the person or people behind Bitcoin is still unknown. ((("open source licenses")))However, neither Satoshi Nakamoto nor anyone else exerts individual control over the Bitcoin system, which operates based on fully transparent mathematical principles, open source code, and consensus among participants. The invention itself is groundbreaking and has already spawned new science in the fields of distributed computing, economics, and econometrics.
Satoshi Nakamoto withdrew from the public in April 2011, leaving the responsibility of developing the code and network to a thriving group of volunteers. The identity of the person or people behind Bitcoin is still unknown. However, neither Satoshi Nakamoto nor anyone else exerts individual control over the Bitcoin system, which operates based on fully transparent mathematical principles, open source code, and consensus among participants. The invention itself is groundbreaking and has already spawned new science in the fields of distributed computing, economics, and econometrics.
.A Solution to a Distributed Computing Problem
****
((("Byzantine Generals' Problem")))Satoshi Nakamoto's invention is
Satoshi Nakamoto's invention is
also a practical and novel solution to a problem in distributed
computing, known as the "Byzantine Generals' Problem." Briefly, the
problem consists of trying to get multiple participants without a leader
@ -162,7 +162,7 @@ derived from the original implementation written by Satoshi Nakamoto.
==== Choosing a Bitcoin Wallet
((("security", "wallet selection")))Bitcoin wallets are one of the most actively developed applications in the Bitcoin ecosystem. There is intense competition, and while a new wallet is probably being developed right now, several wallets from last year are no longer actively maintained. Many wallets focus on specific platforms or specific uses and some are more suitable for beginners while others are filled with features for advanced users. Choosing a wallet is highly subjective and depends on the use and user expertise. Therefore it would be pointless to recommend a specific brand or wallet. However, we can categorize Bitcoin wallets according to their platform and function and provide some clarity about all the different types of wallets that exist. It is worth trying out several different wallets until you find one that fits your needs.
Bitcoin wallets are one of the most actively developed applications in the Bitcoin ecosystem. There is intense competition, and while a new wallet is probably being developed right now, several wallets from last year are no longer actively maintained. Many wallets focus on specific platforms or specific uses and some are more suitable for beginners while others are filled with features for advanced users. Choosing a wallet is highly subjective and depends on the use and user expertise. Therefore it would be pointless to recommend a specific brand or wallet. However, we can categorize Bitcoin wallets according to their platform and function and provide some clarity about all the different types of wallets that exist. It is worth trying out several different wallets until you find one that fits your needs.
===== Types of Bitcoin wallets
Bitcoin wallets can be categorized as follows, according to the platform:
@ -204,7 +204,7 @@ hardware signing device.
===== Full-node vs. Lightweight
Another way to categorize Bitcoin wallets is by their degree of autonomy and how they interact with the Bitcoin network:
Full-node:: ((("full-node")))A full node is a program that validates the
Full-node:: A full node is a program that validates the
entire history of Bitcoin transactions (every transaction by every user,
ever). Optionally, full nodes can also store previously validated
transactions and serve data to other Bitcoin programs, either on the
@ -213,14 +213,14 @@ computer resources--about the same as watching an hour-long streaming
video for each day of Bitcoin transactions--but the full node offers
complete autonomy to its users.
Lightweight client:: ((("lightweight clients")))
Lightweight client::
A lightweight client, also known as a simplified-payment-verification (SPV) client,
connects to a full node or other remote server for receiving and sending
Bitcoin transaction information, but stores the user wallet locally,
partially validates the transactions it receives, and independently
creates outgoing transactions.
Third-party API client:: ((("third-party API clients")))A third-party
Third-party API client:: A third-party
API client is one that interacts with Bitcoin through a third-party
system of application programming interfaces (APIs), rather than by
connecting to the Bitcoin network directly. The wallet may be stored by
@ -363,11 +363,11 @@ ensure you aren't being phished.
==== Bitcoin addresses
Alice is now ready to start using her new Bitcoin wallet. ((("", startref="GSquick01")))((("", startref="Wquick01"))) Her wallet application randomly generated a private key (described in more detail in <<private_keys>>) which will be used to derive Bitcoin addresses that direct to her wallet. At this point, her Bitcoin addresses are not known to the Bitcoin network or "registered" with any part of the Bitcoin system. Her Bitcoin addresses are simply numbers that correspond to her private key that she can use to control access to the funds. The addresses are generated independently by her wallet without reference or registration with any service.
Alice is now ready to start using her new Bitcoin wallet. Her wallet application randomly generated a private key (described in more detail in <<private_keys>>) which will be used to derive Bitcoin addresses that direct to her wallet. At this point, her Bitcoin addresses are not known to the Bitcoin network or "registered" with any part of the Bitcoin system. Her Bitcoin addresses are simply numbers that correspond to her private key that she can use to control access to the funds. The addresses are generated independently by her wallet without reference or registration with any service.
are a variety of Bitcoin addresses and invoice formats. Addresses and
invoices can be shared with other Bitcoin users
who can use them to send bitcoins directly to your wallet. You can share
@ -402,7 +402,7 @@ bitcoin-accepting charity.
[[getting_first_bitcoin]]
==== Getting Your First Bitcoin
((("getting started", "acquiring bitcoin")))The first task for new users is to acquire some bitcoin.
The first task for new users is to acquire some bitcoin.
Bitcoin transactions are irreversible. Most electronic payment networks such as credit cards, debit cards, PayPal, and bank account transfers are reversible. For someone selling bitcoin, this difference introduces a very high risk that the buyer will reverse the electronic payment after they have received bitcoin, in effect defrauding the seller. To mitigate this risk, companies accepting traditional electronic payments in return for bitcoin usually require buyers to undergo identity verification and credit-worthiness checks, which may take several days or weeks. As a new user, this means you cannot buy bitcoin instantly with a credit card. With a bit of patience and creative thinking, however, you won't need to.
@ -411,15 +411,15 @@ Here are some methods for acquiring bitcoin as a new user:
* Find a friend who has bitcoins and buy some from him or her directly. Many Bitcoin users start this way. This method is the least complicated. One way to meet people with bitcoins is to attend a local Bitcoin meetup listed at https://meetup.com[Meetup.com].
* Earn bitcoin by selling a product or service for bitcoin. If you are a programmer, sell your programming skills. If you're a hairdresser, cut hair for bitcoins.
* ((("Coin ATM Radar")))((("ATMs, locating")))Use a Bitcoin ATM in your city. A Bitcoin ATM is a machine that accepts cash and sends bitcoins to your smartphone Bitcoin wallet.
* ((("exchange rates", "listing services")))Use a Bitcoin currency exchange linked to your bank account. Many countries now have currency exchanges that offer a market for buyers and sellers to swap bitcoins with local currency. Exchange-rate listing services, such as https://bitcoinaverage.com[BitcoinAverage], often show a list of Bitcoin exchanges for each currency.
* Use a Bitcoin ATM in your city. A Bitcoin ATM is a machine that accepts cash and sends bitcoins to your smartphone Bitcoin wallet.
* Use a Bitcoin currency exchange linked to your bank account. Many countries now have currency exchanges that offer a market for buyers and sellers to swap bitcoins with local currency. Exchange-rate listing services, such as https://bitcoinaverage.com[BitcoinAverage], often show a list of Bitcoin exchanges for each currency.
exchanges")))((("digital currencies", "benefits of
bitcoin")))((("bitcoin", "benefits of")))One of the advantages of
bitcoin")))One of the advantages of
Bitcoin over other payment systems is that, when used correctly, it
affords users much more privacy. Acquiring, holding, and spending
bitcoin does not require you to divulge sensitive and personally
@ -440,14 +440,14 @@ Alice was introduced to Bitcoin by a friend so she has an easy way to acquire he
[[bitcoin_price]]
==== Finding the Current Price of Bitcoin
((("getting started", "exchange rates")))((("exchange rates", "determining")))Before Alice can buy bitcoin from Joe, they have to agree on the _exchange rate_ between bitcoin and US dollars. This brings up a common question for those new to Bitcoin: "Who sets the price
Before Alice can buy bitcoin from Joe, they have to agree on the _exchange rate_ between bitcoin and US dollars. This brings up a common question for those new to Bitcoin: "Who sets the price
of bitcoins?" The short answer is that the price is set by markets.
((("exchange rates", "floating")))((("floating exchange rate")))Bitcoin, like most other currencies, has a _floating exchange rate_. That means that the value of bitcoin fluctuates according to supply and demand in the various markets where it is traded. For example, the "price" of bitcoin in US dollars is calculated in each market based on the most recent trade of bitcoins and US dollars. As such, the price tends to fluctuate minutely several times per second. A pricing service will aggregate the prices from several markets and calculate a volume-weighted average representing the broad market exchange rate of a currency pair (e.g., BTC/USD).
Bitcoin, like most other currencies, has a _floating exchange rate_. That means that the value of bitcoin fluctuates according to supply and demand in the various markets where it is traded. For example, the "price" of bitcoin in US dollars is calculated in each market based on the most recent trade of bitcoins and US dollars. As such, the price tends to fluctuate minutely several times per second. A pricing service will aggregate the prices from several markets and calculate a volume-weighted average representing the broad market exchange rate of a currency pair (e.g., BTC/USD).
There are hundreds of applications and websites that can provide the current market rate. Here are some of the most popular:
https://bitcoinaverage.com/[Bitcoin Average]:: ((("BitcoinAverage")))A site that provides a simple view of the volume-weighted-average for each currency.
https://bitcoinaverage.com/[Bitcoin Average]:: A site that provides a simple view of the volume-weighted-average for each currency.
https://coincap.io/[CoinCap]:: A service listing the market capitalization and exchange rates of hundreds of crypto-currencies, including bitcoins.
https://www.cmegroup.com/markets/cryptocurrencies/cme-cf-cryptocurrency-benchmarks.html?redirect=/trading/cryptocurrency-indices/cf-bitcoin-reference-rate.html[Chicago Mercantile Exchange Bitcoin Reference Rate]:: A reference rate that can be used for institutional and contractual reference, provided as part of investment data feeds by the CME.
@ -460,7 +460,7 @@ currencies.
((("getting started", "sending and receiving bitcoin",
example")))((("spending bitcoin", see="also transactions")))Alice has
example")))Alice has
decided to buy 0.001 bitcoins. After she and Joe check the exchange rate,
she gives Joe an appropriate amount of cash, opens her mobile wallet
application, and selects Receive. This
@ -511,7 +511,7 @@ transaction, Alice's wallet will indicate that it is receiving
[[confirmations]]
.Confirmations
****
((("getting started", "confirmations")))((("confirmations", "bitcoin wallet quick start example")))((("confirmations", see="also mining and consensus; transactions")))((("clearing", seealso="confirmations")))At first, Alice's address will show the transaction from Joe as "Unconfirmed." This means that the transaction has been propagated to the network but has not yet been recorded in the Bitcoin transaction journal, known as the blockchain. To be confirmed, a transaction must be included in a block and added to the blockchain, which happens every 10 minutes, on average. In traditional financial terms this is known as _clearing_. For more details on propagation, validation, and clearing (confirmation) of bitcoin transactions, see <<mining>>.
At first, Alice's address will show the transaction from Joe as "Unconfirmed." This means that the transaction has been propagated to the network but has not yet been recorded in the Bitcoin transaction journal, known as the blockchain. To be confirmed, a transaction must be included in a block and added to the blockchain, which happens every 10 minutes, on average. In traditional financial terms this is known as _clearing_. For more details on propagation, validation, and clearing (confirmation) of bitcoin transactions, see <<mining>>.
****
Alice is now the proud owner of 0.001 BTC that she can spend. Over the next few days, Alice buys more bitcoin using an ATM and an exchange. In the next chapter we will look at her first purchase with Bitcoin, and examine the underlying transaction and propagation technologies in more detail.((("", startref="BCbasic01")))
Alice is now the proud owner of 0.001 BTC that she can spend. Over the next few days, Alice buys more bitcoin using an ATM and an exchange. In the next chapter we will look at her first purchase with Bitcoin, and examine the underlying transaction and propagation technologies in more detail.
((("bitcoin", "benefits of", id="BCbasicbenefits0")))((("decentralized systems", "bitcoin as")))I (Andreas) first stumbled upon Bitcoin in mid-2011. My immediate reaction was more or less "Pfft! Nerd money!" and I ignored it for another six months, failing to grasp its importance. This is a reaction that I have seen repeated among many of the smartest people I know, which gives me some consolation. The second time I came across Bitcoin, in a mailing list discussion, I decided to read the whitepaper written by Satoshi Nakamoto and see what it was all about. ((("digital currencies", "bitcoin vs. others")))I still remember the moment I finished reading those nine pages, when I realized that Bitcoin was not simply a digital currency, but a network of trust that could also provide the basis for so much more than just currencies. The realization that "this isn't money, it's a decentralized trust network," started me on a four-month journey to devour every scrap of information about Bitcoin I could find. I became obsessed and enthralled, spending 12 or more hours each day glued to a screen, reading, writing, coding, and learning as much as I could. I emerged from this state of fugue, more than 20 pounds lighter from lack of consistent meals, determined to dedicate myself to working on Bitcoin.
I (Andreas) first stumbled upon Bitcoin in mid-2011. My immediate reaction was more or less "Pfft! Nerd money!" and I ignored it for another six months, failing to grasp its importance. This is a reaction that I have seen repeated among many of the smartest people I know, which gives me some consolation. The second time I came across Bitcoin, in a mailing list discussion, I decided to read the whitepaper written by Satoshi Nakamoto and see what it was all about. I still remember the moment I finished reading those nine pages, when I realized that Bitcoin was not simply a digital currency, but a network of trust that could also provide the basis for so much more than just currencies. The realization that "this isn't money, it's a decentralized trust network," started me on a four-month journey to devour every scrap of information about Bitcoin I could find. I became obsessed and enthralled, spending 12 or more hours each day glued to a screen, reading, writing, coding, and learning as much as I could. I emerged from this state of fugue, more than 20 pounds lighter from lack of consistent meals, determined to dedicate myself to working on Bitcoin.
Two years later, after creating a number of small startups to explore various Bitcoin-related services and products, I decided that it was time to write my first book. Bitcoin was the topic that had driven me into a frenzy of creativity and consumed my thoughts; it was the most exciting technology I had encountered since the internet. It was now time to share my passion about this amazing technology with a broader audience.
=== Intended Audience
((("intended audience")))This book is mostly intended for coders. If you can use a programming language, this book will teach you how cryptographic currencies work, how to use them, and how to develop software that works with them. The first few chapters are also suitable as an in-depth introduction to Bitcoin for noncoders—those trying to understand the inner workings of Bitcoin and cryptocurrencies.
This book is mostly intended for coders. If you can use a programming language, this book will teach you how cryptographic currencies work, how to use them, and how to develop software that works with them. The first few chapters are also suitable as an in-depth introduction to Bitcoin for noncoders—those trying to understand the inner workings of Bitcoin and cryptocurrencies.
=== Why Are There Bugs on the Cover?
((("decentralized systems", "in nature")))The leafcutter ant is a species that exhibits highly complex behavior in a colony super-organism, but each individual ant operates on a set of simple rules driven by social interaction and the exchange of chemical scents (pheromones). Per Wikipedia: "Next to humans, leafcutter ants form the largest and most complex animal societies on Earth." Leafcutter ants don't actually eat leaves, but rather use them to farm a fungus, which is the central food source for the colony. Get that? These ants are farming!
The leafcutter ant is a species that exhibits highly complex behavior in a colony super-organism, but each individual ant operates on a set of simple rules driven by social interaction and the exchange of chemical scents (pheromones). Per Wikipedia: "Next to humans, leafcutter ants form the largest and most complex animal societies on Earth." Leafcutter ants don't actually eat leaves, but rather use them to farm a fungus, which is the central food source for the colony. Get that? These ants are farming!
Although ants form a caste-based society and have a queen for producing offspring, there is no central authority or leader in an ant colony. The highly intelligent and sophisticated behavior exhibited by a multimillion-member colony is an emergent property from the interaction of the individuals in a social network.
Nature demonstrates that decentralized systems can be resilient and can produce emergent complexity and incredible sophistication without the need for a central authority, hierarchy, or complex parts.
((("decentralized systems", "benefits of")))Bitcoin is a highly sophisticated decentralized trust network that can support myriad financial processes. Yet, each node in the Bitcoin network follows a few simple rules. The interaction between many nodes is what leads to the emergence of the sophisticated behavior, not any inherent complexity or trust in any single node. Like an ant colony, the Bitcoin network is a resilient network of simple nodes following simple rules that together can do amazing things without any central coordination.((("", startref="BCbasicbenefits0")))
Bitcoin is a highly sophisticated decentralized trust network that can support myriad financial processes. Yet, each node in the Bitcoin network follows a few simple rules. The interaction between many nodes is what leads to the emergence of the sophisticated behavior, not any inherent complexity or trust in any single node. Like an ant colony, the Bitcoin network is a resilient network of simple nodes following simple rules that together can do amazing things without any central coordination.
=== Conventions Used in This Book
((("typographical conventions")))The following typographical conventions are used in this book:
The following typographical conventions are used in this book:
_Italic_:: Indicates new terms, URLs, email addresses, filenames, and file extensions.
@ -61,9 +61,9 @@ All the code snippets use real values and calculations where possible, so that y
This book is here to help you get your job done. In general, if example code is offered with this book, you may use it in your programs and documentation. You do not need to contact us for permission unless you’re reproducing a significant portion of the code. For example, writing a program that uses several chunks of code from this book does not require permission. Selling or distributing a CD-ROM of examples from O’Reilly books does require permission. Answering a question by citing this book and quoting example code does not require permission. Incorporating a significant amount of example code from this book into your product’s documentation does require permission.
((("attribution")))We appreciate, but do not require, attribution. An attribution usually includes the title, author, publisher, and ISBN. For example: “_Mastering Bitcoin_ by Andreas M. Antonopoulos and David A. Harding (O’Reilly). Copyright 2023, ISBN 978-1-491-95438-6.”
We appreciate, but do not require, attribution. An attribution usually includes the title, author, publisher, and ISBN. For example: “_Mastering Bitcoin_ by Andreas M. Antonopoulos and David A. Harding (O’Reilly). Copyright 2023, ISBN 978-1-491-95438-6.”
((("open source licenses")))Some editions of this book are offered under an open source license, such as https://creativecommons.org/licenses/by-nc/4.0/[CC-BY-NC], in which case the terms of that license apply.
Some editions of this book are offered under an open source license, such as https://creativecommons.org/licenses/by-nc/4.0/[CC-BY-NC], in which case the terms of that license apply.
If you feel your use of code examples falls outside fair use or the permission given above, feel free to contact us at pass:[<a href="mailto:permissions@oreilly.com">permissions@oreilly.com</a>].
=== Bitcoin Addresses and Transactions in This Book
((("getting started", "warnings and cautions")))((("warnings and cautions", "avoid sending money to addresses appearing in book")))((("keys and addresses", "warnings and cautions")))((("transactions", "warnings and cautions")))((("blockchain applications", "warnings and cautions")))((("QR codes", "warnings and cautions")))The Bitcoin addresses, transactions, keys, QR codes, and blockchain data used in this book are, for the most part, real. That means you can browse the blockchain, look at the transactions offered as examples, retrieve them with your own scripts or programs, etc.
The Bitcoin addresses, transactions, keys, QR codes, and blockchain data used in this book are, for the most part, real. That means you can browse the blockchain, look at the transactions offered as examples, retrieve them with your own scripts or programs, etc.
However, note that the private keys used to construct addresses are either printed in this book, or have been "burned." That means that if you send money to any of these addresses, the money will either be lost forever, or in some cases everyone who can read the book can take it using the private keys printed in here.
[WARNING]
====
DO NOT SEND MONEY TO ANY OF THE ADDRESSES IN THIS BOOK. Your money will be taken by another reader, or lost forever.((("", startref="codeuse00")))
DO NOT SEND MONEY TO ANY OF THE ADDRESSES IN THIS BOOK. Your money will be taken by another reader, or lost forever.
====
=== O'Reilly Safari
@ -96,7 +96,7 @@ For more information, please visit pass:[<a href="https://oreilly.com/safari" cl
=== How to Contact Us
((("comments and questions")))((("contact information")))Please address comments and questions concerning this book to the publisher:
Please address comments and questions concerning this book to the publisher:
++++
<ul class="simplelist">
@ -146,7 +146,7 @@ link:$$https://dtrt.org/$$[]
_By Andreas M. Antonopoulos_
((("acknowledgments", id="acknowledge0")))This book represents the efforts and contributions of many people. I am grateful for all the help I received from friends, colleagues, and even complete strangers, who joined me in this effort to write the definitive technical book on cryptocurrencies and Bitcoin.
This book represents the efforts and contributions of many people. I am grateful for all the help I received from friends, colleagues, and even complete strangers, who joined me in this effort to write the definitive technical book on cryptocurrencies and Bitcoin.
It is impossible to make a distinction between the Bitcoin technology and the Bitcoin community, and this book is as much a product of that community as it is a book on the technology. My work on this book was encouraged, cheered on, supported, and rewarded by the entire Bitcoin community from the very beginning until the very end. More than anything, this book has allowed me to be part of a wonderful community for two years and I can't thank you enough for accepting me into this community. There are far too many people to mention by name—people I've met at conferences, events, seminars, meetups, pizza gatherings, and small private gatherings, as well as many who communicated with me by Twitter, on reddit, on bitcointalk.org, and on GitHub who have had an impact on this book. Every idea, analogy, question, answer, and explanation you find in this book was at some point inspired, tested, or improved through my interactions with the community. Thank you all for your support; without you this book would not have happened. I am forever grateful.
((("whitepaper", id="whitethirteen")))((("bitcoin whitepaper", id="BCwhitethirteen")))((("Nakamoto, Satoshi", id="nakamatothirteen")))This is the original whitepaper, reproduced in its entirety exactly as it was published by Satoshi Nakamoto in October 2008.
This is the original whitepaper, reproduced in its entirety exactly as it was published by Satoshi Nakamoto in October 2008.
====
=== Bitcoin - A Peer-to-Peer Electronic Cash System
@ -450,7 +450,7 @@ We have proposed a system for electronic transactions without relying on trust.
=== License
((("open source licenses")))This whitepaper was published in October 2008 by Satoshi Nakamoto. It was later (2009) added as supporting documentation to the bitcoin software and carries the same MIT license. It has been reproduced in this book, without modification other than formatting, under the terms of the MIT license:
This whitepaper was published in October 2008 by Satoshi Nakamoto. It was later (2009) added as supporting documentation to the bitcoin software and carries the same MIT license. It has been reproduced in this book, without modification other than formatting, under the terms of the MIT license:
The MIT License (MIT)
Copyright (c) 2008 Satoshi Nakamoto
@ -459,4 +459,4 @@ Permission is hereby granted, free of charge, to any person obtaining a copy of
The above copyright notice and this permission notice shall be included in all copies or substantial portions of the Software.
THE SOFTWARE IS PROVIDED "AS IS," WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT. IN NO EVENT SHALL THE AUTHORS OR COPYRIGHT HOLDERS BE LIABLE FOR ANY CLAIM, DAMAGES OR OTHER LIABILITY, WHETHER IN AN ACTION OF CONTRACT, TORT OR OTHERWISE, ARISING FROM, OUT OF OR IN CONNECTION WITH THE SOFTWARE OR THE USE OR OTHER DEALINGS IN THE SOFTWARE.((("", startref="whitethirteen")))((("", startref="nakamatothirteen")))((("", startref="BCwhitethirteen")))
THE SOFTWARE IS PROVIDED "AS IS," WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT. IN NO EVENT SHALL THE AUTHORS OR COPYRIGHT HOLDERS BE LIABLE FOR ANY CLAIM, DAMAGES OR OTHER LIABILITY, WHETHER IN AN ACTION OF CONTRACT, TORT OR OTHERWISE, ARISING FROM, OUT OF OR IN CONNECTION WITH THE SOFTWARE OR THE USE OR OTHER DEALINGS IN THE SOFTWARE.
theresa jones
8 months ago