Bitcoin

From Mr. Bitcoin
Jump to: navigation, search

What is Bitcoin:

The internet of money or IoM like IoT (Internet of things), a currency / value token that can buy gods and services globally using the internet.
The value token network that runs on the Internet with sets or blocks of transaction data packaged and blocks are built on top of each other to locked them in sequential order.
Digital assets / money that is programable and can be self regulated.
 

Definition of Bitcoin

By Gavin Andresen Feb. 7, 2017 and Feb. 8, 2017
“Bitcoin” is the ledger of not-previously-spent, validly signed transactions contained in the chain of blocks that begins with the genesis block that has the biggest market cap, follows the 21-million coin creation schedule, and the chain with most energy expended on proof of work.
 

Bitcoin FAQ

  • The Domain name "Bitcoin.org" was registered August 18, 2008 01:19:55 PM
  • The "Bitcoin: A Peer-To-Peer Electronic Cash System" paper surfaced some time between October 31, and November 2, 2008
  • The Bitcoin blockchain started with the Genesis Block on January 3, 2009 06:15:05 PM
  • The Second Block, "Block #1", was timestamp January 9, 2009 02:54:25 AM
  • The first Bitcoin transaction happened January 12, 2009 3:30:25 AM in Block #170 for 10 Bitcoins from Satoshi Nakamoto to Hal Finney
  • Only 21 million bitcoins will ever exist
  • The consensus algorithm is Proof of Work
  • The lowest denomination of bitcoin is 1 Satoshi. There are 100 million Satoshi’s to every bitcoin. That is 8 numbers behind the coma, (1 Satoshi = 0,00000001 Bitcoin)
  • Every Satoshi can be programed to carry 256 characters
  • Bitcoin is run decentralized on a flat structure as opposed to a centralized hierarchical structure
  • As of February 9, 2017 the price of one bitcoin is approximately $1070, - USD roughly 8900, - NOK
  • Bitcoin is design to be the senders “push transaction” and that no entity like banks, governments or 3rd party can stop a sender from pushing transaction to be executed. In effect the sender is the ultimat autority and decides who he or she pays value to
  • The Bitcoin code has never been successfully hacked, but we have seen many examples of centralized wallets that have been broken into (Hacked)
  • The software is open sours and the code is available on GitHub
  • The difficulty parameter, that is built into the software, is adjusted every 2016 blocks to change to try and keep a 10-minute block time on average based on the blockchain performance the last 2016 blocks.
  • Hashing is a brute-forced mechanism by the miners (supercomputers with ASIC CPU’s (Application Specific Integrated Circuits Central Processing Units)) guessing the right combination
  • An executed SHA256 hash is one try to guess the right combination on the complex lock holding the blocks together. As of February 2017, the Bitcoin Blockchain is running at approximately 4 ExaHash per second, that is 4.123.814.017.485.500.000 guesses per second
    • Side note:
      • 1 guess = 1 hash
      • 1024 hash = 1 Kilohash
      • 1024 kilohash = 1 Megahash
      • 1024 Megahash = 1 Gigahash
      • 1024 Gigahash = 1 Terahash
      • 1024 Terahash = 1 Petahash
      • 1024 Petahash = 1 Exahash
  • The miners get rewarded for the blocks that they solve and broadcast to the rest of the network first.
  • Every 210.000 blocks the miner reward gets halved.
    • On 3rd. of January 2009 the reward to miners started with 50 bitcoins.
    • On 28th. of November 2012 the reward to miners halved to 25 bitcoins.
    • On 10th. of July 2016 the reward to miners halved to 12,5 bitcoins.
    • Estimated on the 25th. of May 2020 the reward to miners halved again to 6,25 bitcoins.
    • Around the year 2140 all the 21.000.000 will be in circulation.
  • In the current bitcoin software, Bitcoin Core ver. 0.13.2 the block size limit is set to 1 Mbite of transaction data.
    • Many new proposals of software with larger block size have been set on the network backwards compatible with Bitcoin Core.
    • To change the current software (Hard fork) 75% of miners need to be mining on to the new software. At the time when 75% is reached, there will be "Grace period" of 1,209,600 second (two weeks) before the new features will be in effect and the Hard fork is completed. This acording to BIP0101.
    • Worth mentioning is:
      • Bitcoin Classic
      • Bitcoin XT
      • Bitcoin Unlimited
         

First vertion of Bitcoin.org

Bitcoin.org ver1.png

Features

Features of the Bitcoin are: What organizations like banks want to use it for:
Open Source Closed Source
Global Local
Immutable permanent ledger Editable ledger (for correcting slipups)
Permission-less (anyone can join) Permission (Only for verified customers)
Censorship resistant Censored (think about sending value to WikiLeaks)
Decentralized / Flat structure Centralized / Hierarchical structure
Pseudonymous Control Identity / KYC
Proof of work consensus Proof of Stake / PoAuthority / PoState
Innovate without permission Controlled team of innovators
This is Bitcoin. Two regular Bitcoiners discuss one evening in 2014 how to promote Bitcoin:
Bitcoiner(1): "How about this idea: Let's get the Banks and Financial organizations to pick up the tab on educating the worlds IT consultants about Bitcoin."
Bitcoiner(2): "Yeah right!, how do you suppose we do that?"
Bitcoiner(1): "We tell them there is a underlying technology, let's call it Blockchain. They will be forced to try to figure it out because of the resilience and disruption that Bitcoin has."
Bitcoiner(2): "Wow, That is some high level eval genius shit."