A few minutes later, a new block, #277317 is mined by another miner. As this new block is based on the previous block (#277316) that contained Alice's transaction, it added even more computation on top of that block, thereby strengthening the trust in those transactions. One block mined on top of the one containing the transaction is called "one confirmation" for that transaction. As the blocks pile on top of each other, it becomes exponentially harder to reverse the transaction, thereby making it more and more trusted by the network.
In the diagram below we can see block #277316, which contains Alice's transaction. Below it are 277,315 blocks, linked to each other in a chain of blocks (blockchain) all the way back to block #0, the genesis block. Over time, as the "height" in blocks increases, so does the computation difficulty for each block and the chain as a whole. The blocks mined after the one that contains Alice's transaction act as further assurance, as they pile on more computation in a longer and longer chain. The blocks above count as "confirmations". By convention, any block with more than 6 confirmations is considered irrevocable, as it would require an immense amount of computation to invalidate and re-calculate six blocks. We will examine the process of mining and the way it builds trust in more detail in <<mining>>.
In the diagram below we can see block #277316, which contains Alice's transaction. Below it are 277,316 blocks (including block #0), linked to each other in a chain of blocks (blockchain) all the way back to block #0, the genesis block. Over time, as the "height" in blocks increases, so does the computation difficulty for each block and the chain as a whole. The blocks mined after the one that contains Alice's transaction act as further assurance, as they pile on more computation in a longer and longer chain. The blocks above count as "confirmations". By convention, any block with more than 6 confirmations is considered irrevocable, as it would require an immense amount of computation to invalidate and re-calculate six blocks. We will examine the process of mining and the way it builds trust in more detail in <<mining>>.
Deterministic, or "seeded" wallets are wallets that contain private keys which are all derived from a common seed, through the use of a one-way hash function. The seed is a randomly generated number which is combined with other data, such as an index number or "chain code" (see <<hd_wallets>>) to derive the private keys. In a deterministic wallet, the seed is sufficient to recover all the derived keys and therefore a single backup at creation time is sufficient. The seed is also sufficient for a wallet export or import, allowing for easy migration of all the user's keys between different wallet implementations.
==== Mnemonic Code Words (BIP0039)
==== Mnemonic Code Words (DRAFT:BIP0039)
Mnemonic codes are English word sequences that are generated from a random sequence and used to produce a seed for use in deterministic wallets. The sequence of words is sufficient to re-create the seed and from there re-create the wallet and all the derived keys. A wallet application that implements deterministic wallets with mnemonic code will show the user a sequence of 12-24 words when first creating a wallet. That sequence of words is the wallet backup and can be used to recover and re-create all the keys in the same or any compatible wallet application.
The common standard for mnemonic codes is defined in Bitcoin Improvement Proposal 39 (see <<bip0039>>), currently in Draft status.
Mnemonic codes are defined in Bitcoin Improvement Proposal 39 (see <<bip0039>>), currently in Draft status. Note that BIP0039 is a draft proposal and not a standard. Specifically, there is a different standard, with a different set of words used by the Electrum wallet and _predating_ BIP0039. BIP0039 is used by the Trezor wallet and a few other wallets but is incompatible with Electrum's implementation.
The standard defines the creation of a mnemonic code and seed as a follows:
BIP0039 defines the creation of a mnemonic code and seed as a follows:
1. Create a random sequence (entropy) of 128 to 256 bits
2. Create a checksum of the random sequence by taking the first few bits of its SHA256 hash
@ -259,7 +259,7 @@ As we saw in the step-by-step example above, when this script is executed the re
[TIP]
====
Transactions are valid if the top result on the stack is TRUE (1), any other non-zero value or if the stack is empty after script execution. Transactions are invalid if the top value on the stack is FALSE (0) or if script execution is halted explicitly by an operator, such as OP_VERIFY, OP_RETURN or a conditional terminator such as OP_ENDIF. See <<tx_script_ops>> for details.
Transactions are valid if the top result on the stack is TRUE (noted as +{0x01}+), any other non-zero value or if the stack is empty after script execution. Transactions are invalid if the top value on the stack is FALSE (a zero-length empty value, noted as +{}+) or if script execution is halted explicitly by an operator, such as OP_VERIFY, OP_RETURN or a conditional terminator such as OP_ENDIF. See <<tx_script_ops>> for details.
Andreas M. Antonopoulos
10 years ago