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Just Found this few hours earlier, while searching for more information on bitcoins this video on youtube. I believe this be taken as an introductory video and this website too.

https://youtu.be/Lx9zgZCMqXE & https://www.bitcoinmining.com/

This is much better (the best I've found): https://www.youtube.com/watch?v=Lx9zgZCMqXE

⬐ dnerdy

This video does a great job explaining how Bitcoin works. Here's the accompanying blog post:

http://www.imponderablethings.com/2013/07/how-bitcoin-works-...

Attackers can't control which nodes you connect to. The Satoshi client's node discover behavior is described here: https://en.bitcoin.it/wiki/Satoshi_Client_Node_Discovery.

This blog post is pretty bad, and I suspect the author doesn't actually understand how bitcoin works. The part where the author says "the other 45 in the network know your real amount" implies some sort of voting mechanism, which is not how bitcoin works. This Youtube video is a much better explanation of the technical aspects of bitcoin: http://www.youtube.com/watch?v=Lx9zgZCMqXE

⬐ sktrdie

The client tries to be as diverse as possible when it comes to connecting to other nodes, but the state where you're only connected to attackers should not be avoid. That's what I was trying to explain in the post.

> "the other 45 in the network know your real amount" implies some sort of voting mechanism, which is not how bitcoin works.

Sorry I wasn't implying a voting mechanism. Simply that your account information is controlled by whomever has the majority of the computing power in the network.

⬐ Aqueous

Another cool BitCoin video which is not very technical, but has impressive visuals:

http://vimeo.com/63502573

⬐ lifeformed

If you can generate a new public key for every transaction, how does it know what previous transactions to refer to as an input? I have a feeling it has something to do with how key signing works, like signing your old key with your new one or something, but I don't really know much about that.

⬐ kimar

Very good video. Wish he had said a few words about how it all started and who is behind the technology.

⬐ coo1k

https://en.bitcoin.it/wiki/Satoshi_Nakamoto

⬐ joemir

Seems very accurate.

⬐ amscanne

Definitely.

I only remember one thing that I didn't agree with. The narrator at one point said that the whole process doesn't require any trust. But that's not true.

You still need to trust: your software implementation, the initial block chain you get, the network as a whole. Sure, the network has excellent abilities to dominate malicious members. But it's still possible to have a large population of malicious nodes, or (far more likely) a software bug with a common implementation.

⬐ scott_ci

theoretically, Bitcoin doesn't require any trust. But with the majority of mining being done be a few large pools, I think the distributed protection of the system is severely compromised. As far as the initial block chain, you can verify it for yourself.

⬐ amscanne

I think my points are valid.

What I mean by initial blockchain is that the initial bitcoin nodes you are talking to indeed represent the legitimate bitcoin network, and not a malicious network with an independent blockchain (valid and verifiable, but obviously would be shorter).

I think it would be straight-forward for ISPs to perform DPI and magically redirect and rewrite packets in order to have you on their bitcoin network with their blockchain. And you wouldn't be able to know if you had never seen the real blockchain.

If this is not possible, I'd be very interested to hear why not :)

A long time ago, I worked at a company that got its start doing exactly this for p2p networks in the early 2000's (and saving ISPs a ton of precious bandwidth).

⬐ obi-nine

Although it started by stating that every member of the network possesses a complete copy of the ledger which isn't the case (eg. Electrum, mobile wallets, etc.)

⬐ M4v3R

One (small) thing that isn't correct is that your Bitcoin address is not the public key. It's actually hash of the public key [1], using RIPEMD-160 and SHA-256 algorithms, with a network type and a checksum added to it, then encoded with Base58 to make it shorter and prevent typos (Base58 doesn't have similar looking characters like O - 0 and I - l).

Also, somewhere in the middle of the video it is said that all inputs have to be spent entirely in the outputs, but this is not correct as well. You can send less amount than you have in your inputs and the resulting difference between the sum of your inputs and outputs is the transaction fee, that is mentioned later in the video.

These are very minor things though, and overall, this is a very good video, probably the best I've seen covering the technical aspects of Bitcoin.

[1] https://en.bitcoin.it/wiki/Technical_background_of_Bitcoin_a...

⬐ scott_ci

True, I still need add a note in the video about the public key. As far as I know, this doesn't impact the security of the system, just makes addresses easier to pass around. Also true about the inputs. It's extremely hard to explain Bitcoin piece by piece without telling some fibs along the way!

⬐ MarkTanamil

when is this pathetic fad going to die?

⬐ jerguismi

LOL, actually never. You have very sad times in front of you if you don't like Bitcoin.

⬐ None

None

⬐ ztnewman

I don't understand what would motivate such a post, or the hoax submission you posted previously. Care to explain?

⬐ diogocal

He probably lost money speculating, and now he is hate-posting.

⬐ simonebrunozzi

Don't feed the troll.

⬐ cstrat

I haven't been able to watch the video because I am at work, but I do have a question.

The statistics on mining now show that it is quite unprofitable - http://blockchain.info/stats Even if those figures are taken with a grain of salt, its clearly not the profit machine it once was.

Given that running a mining rig is becoming less and less profitable, won't we end up in a situation where the only people running rigs are the ones that have a vested interest in keeping the technology going... Probably reducing the total size of the network down to a small group of collectives. Even worse will be when there are no new coins being mined, profitability will be reduced even further - and the mining difficulty will be massive given all the dedicated mining rigs in the market from the boom time.

I jumped on the bandwagon early this year and speculated, gambled, purchased and ended up cashing out before the issues with Liberty Reserve arose and caused issues with my ability to deposit/withdraw from MtGox. So I have spent quite a bit of time using the technology, but have been out of the loop for a few months now.

⬐ nimrody

At some point the motivation for verifying transactions (mining) will become the attached transaction fee.

At this point laws of supply&demand become applicable: If the number of miners gets small, transaction fees will rise and mining becomes more profitable.

Of course this is all theoretical. The network might die if the number of people accepting bitcoins as payment becomes too low.

Nothing stops you from create hundreds or even millions of bitcoin addresses, which can act as "accounts."

Edit: A bitcoin address is a 160-bit number. That number is associated with a public and private key. The only way you can spend bitcoins stored in an address is if you know the private key of that address.

For more information, this video gives a fairly in depth explanation: http://www.youtube.com/watch?v=Lx9zgZCMqXE

⬐ baddox

Not only does nothing stop you, it's fairly trivially automatable.

⬐ pkulak

I just wondered to myself how long it would take you to use up all the addresses if you created a trillion per second.

3.6e+17 times the current age of the universe. So, it looks like there are enough addresses for you to really go nuts, if you like. Block chain might get a bit bloated though.

⬐ None

None

⬐ discobean

when you create addresses, you can do them offline. Has nothing to do with the blockchain.

⬐ jafaku

Addresses are not added to the block chain unless they receive Bitcoin. There are no checks in place to ensure the uniqueness of the address, since it's virtually impossible to generate the same address twice, let alone an address with a positive balance.

⬐ scott_ci

why I made this video: A lot of the videos and explanations I read about Bitcoin were vague and mystical sounding. Or, alternately, super long and rambling. This is my effort to explain it in as concise a manner as possible.

I'm relatively new to Bitcoin, so any critical feedback would be very much appreciated, especially regarding my explanations for the rationale behind the block chain, and potential security risks posed by large "mining pools."

After doing all my research, the craziest part to me is that the point of all the mining is just to sort transactions. If this is correct, then it seems like there's got to be a cheaper way to do this... maybe ripple's digital currency?