The soaring price of bitcoin—the virtual currency is now worth more than $250 billion—has gotten a lot of attention in recent weeks. But the real significance of bitcoin isn't just its rising value. It's the technological breakthrough that allowed the network to exist in the first place.
Bitcoin's still anonymous inventor, who went by the pseudonym Satoshi Nakamoto, figured out a completely new way for a decentralized network to reach a consensus about a shared transaction ledger. This innovation made possible the kind of fully decentralized electronic payment systems that cypherpunks had dreamed about for decades.
As part of our recent efforts to shed light on the mechanics of the popular cryptocurrency, today we'll provide in-depth explanation of how bitcoin works, starting with the basics: how do digital signatures make digital cash possible? How did Nakamoto's invention of the blockchain solve the double-spending problem that had limited earlier digital cash efforts?
We'll also explore more recent happenings like the block size debate that has divided the bitcoin community into two warring camps. And finally, we'll look at the future and talk about why bitcoin's design could make it a uniquely fertile platform for innovation in the coming years. As you're about to see, there's simply a lot to cover.
Source:
https://arstechnica.com/tech-policy/2017/12/how-bitcoin-works/
(Score: 2) by arslan on Wednesday December 20 2017, @02:00AM (2 children)
To me the ingenuity of bitcoins, and the genius stroke from Satoshi Nakamoto, isn't the tech. It is equilibrium of creating an economy (coins through mining) that feeds the operational underpinning of the decentralized network (through verification via the mining activity) with the strong anonymity. This is the holy trinity.
A lot of talk on bitcoins and blockchains delve too much into the dazzle of the tech. A lot of startup tech misses the beauty of this equilibrium and bastardize one of more of this holy trinity. Lots of snake-oil being peddled.
It reminds me of this dilbert strip [blogspot.com], except replace the buzzword with blockchain.
(Score: 2) by ants_in_pants on Wednesday December 20 2017, @03:48AM (1 child)
bitcoin doesn't have strong anonymity or even a very intelligent design. Other coins, such as monero or ethereum, are far better designed.
-Love, ants_in_pants
(Score: 2) by arslan on Wednesday December 20 2017, @05:05AM
It does compared the other existing payment mechanisms when it first came on the scene. Those that you mentioned came after standing on the shoulder of the giant.