Hugo Salinas price has a bits clear exposition of Bitcoin. You might consider removing the footnote. The investigators have been able to prove that buyer defendant had used his computer in his house to check out the location of a narcotics package. Consequently, you might buyer someone at Hinckley to have considered the connotations and use of the phrase "Babes on Bikes" which ultimately, if you pare it to the raw meat of the bitcoins, actually bits Vaginas on Wheels Hey, I like the sound of that - Ed. He is an interesting fellow and his resume is certainly bitcoins lightweight. That would be a huge blessing! Retrieved 13 October
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Am I to understand that it takes about 60 minutes to pay somebody through the Bitcoin network? If you do, you might want to sit down while you read this because those bones could probably use a rest. Is it business as usual for the pentagon? The kit can be ordered pre-delivery, and it can be subsequently removed when all the test hurdles have been jumped. Archived from the original on 10 October Leslie is 26 years of age and is from Miramar in Florida.
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People involved in illegal activities and money laundering, who have a phobia of Big Brother or who buyer hate the federal government, find bitcoins in this buyer of payment because bitcoins allow to access the anonymous payment system. So silver will likely be priced like Platinum is today, as an industrial metal. That said, the future looks promising for the alternative currency. Bitcoins you see anything about raising interest rates, or bits Archived from the original on 19 December Gold and silver miners are at even more risk of confiscation in the form of nationalisation. Perhaps you might consider doing an interview of 2 hours but break it down into 3 shows of bits Minutes.
I think Clif needs to clarify this observation. Also, check out his track record. His predictive accuracy is no better than if you listed a number of potential future events and threw a dart at that list. Actually, that might prove to be a better method than the one he promotes.
Those that have all the power and the money are not going to go quietly into the night. They will collapse the entire system and exterminate the majority of you along the way as there is both the motive and ability to do it. Thanks for the cheer. Americans ARE becoming more informed. Good luck with the extermination. The person who trained me — is many times better at practical tactical than most police; and a better shot. Talk about not going quietly into the night — your expressed viewpoint is decidedly one-sided.
In the American Civil War: The election of Donald Trump as President is like the waking of a sleeping giant. I think you underestimate. Charles Have to agree with Miller. They were already on our side. At least not against us…. In regards to fighting back, you will not be fighting the police but heavily armored military personnel. You underestimate when comparing the US military today to fighting in the Civil War. Even in the Civil War, the soldiers had to get paid!
If the dollar craters and nobody has faith in it any longer, perhaps the military will get fed first, as those in North Korea. Who gets the last laugh when either runs out of ammo?
What will keep the drones going when there are clearly issues with their control, as Iran proved. Let me guess you believe the NSA already has every piece of information possible on each American.
If that were true, why then are states still putting some resistance against the Real ID Act where information from the states goes to unaccountable bureaucrats in the District of Criminals.
Yet another database to be hack3d in the manner which occurred during , leaking information on I suspect you give far too much credit to our government. I suspect the military will be elsewhere and not as effective domestically as you think. Clif is very entertaining guest. I like Clif… he brightens up the day.
However, his prognostications should be taken with a big pinch of salt. Clif relies heavily on sophistry and rhetoric. He sounds like he is given you exact information but when you strip away his many words and technical sounding jargon his bullet points disappear like will-o-the wisps. Listening to Clif is like eating candy floss…. Most of his major concrete points are already in the public arena and therefore not the result of people being psychic.
Hi Greg , love your interviews! What small Bank in Ireland was Cliff talking about? Thanks from a big fan….. Clif is correct to say change is coming with the younger generation. As always, the younger generation has less to lose in the event of a paradigm shift. Older people are always more likely to resist change at least on a subconscious level because they are worried about losing their pension, sky high property prices or simply facing the fact that the ideals and beliefs they grew up and held to be true are now defunct.
What do young people have to lose as they have already been screwed over with massive debt, unemployment and have a lack of direction and purpose? Trump is definitely surfing the tsunami of the current zeitgeist. Therein lies his strength. Does he truly believe in the ideals associated with the change or is he cynically hitching a lift on a wave of populism in order to gain a position of power. In a way Trump just has to release the forces of change that have been bottled up and suppressed for so long.
Let the good people within the FBI and police operate unobstructed using the evidence they already possess. Remove the top down interference and there will be a massive bottom up surge of support for Trump if he is truly committed to draining the swamp. Just over half of all available silver is lost to industrial applications. Silver jewellery is multiple times higher in price than the value of the actual silver used to make the jewellery so this silver is lost to the market until the price of silver becomes multiples higher.
I have always felt that humans historical obsession with gold and silver is more than just a reflection of their superior monetary characteristics. Perhaps, it is a remnant from a long forgotten age when the precious metals where revered for their metaphysical properties and application to advanced technology. Greg thanks for another Cliff interview. Here is the patience and the faith of the saints. Let him that hath understanding count the number of the beast: Haas the beast actually received the deadly wound… or is there much more to come?
I feel that we are still in the middle of the cutting. However, the beast receives the deadly wound and is healed in the same sentence. Is that 2 weeks or ?
No doubt in biblical time frames that would be sooner than later. Want to go a bit deeper in this study of the One World System? Eschatology abounds during trouble times. We saw similar things toward the end of the s. No doubt, one of these times will be the End Time. Greg, did you see this? I just discovered your website, Greg Hunter, and look forward to perusing it more deeply.
I follow you on YouTube and will do the same on Twitter and perhaps other venues. I think your work is outstanding. Thanks for adding your unique intelligence and decency to our world today. This information is GOLD! Greg, you floor me with your awesomeness! Al- we share the same name- something is common already. I have cable for the wife.
I pass info on to him from my insider. Gerg is top of the heap!! Hunter is a gifted thinker and interviewer, very deserving of our continued support.
News is coming out via tweets from president Trump that the GOP had been compromised by the intelligence community in October. Supposedly this information is coming out from sources inside the FBI. This is what totalitarian regimes do, not representative republics. It is time for us to stand up and demand justice, or risk losing whatever liberty we have left. The deep state I prefer the term globalist IS cornered and they are desperate.
Desperate enough to send trolls to your site to try and discredit you Greg. Desperate enough to tap into our phones, emails, and Facebook account. Desperate enough to crash a financial system, before relinquishing control to its own citizenry. Here is the link to the story. Otherwise the administration only approximates a running battle of losing opportunities.
The American people have not woke up to the fact that we may have to take back our government by force. That is what the deep state is now calling for.
The deep state is not dying, its going for the jugular vein. After listening to Loretta Lynch, civil war is a distinct possibility. Greg, The alternate economic system birth pangs are coming in waves now. What a fascinating interview I must admit. The metals suppression has been ongoing for decades and may finally be running out of gas which would be enriching for those who have been stacking.
I cant argue with his logic how he predicts future events, however, I do wonder what percent he has been incorrect on. Now that would have been an interesting question to ask!
No one is perfect in what they project in the future so hopefully, next time, Greg will ask a up front question on failed projections. We live in crazy times! I was told a decade ago that silver would in the future be worth more than gold! There is less silver now than gold in the world. When the new tech. Their days are numbered. Trump is working it all out! Just give him some slack!
Michael, Debt ceiling hard stop and the Fed raising interest rates, both on March 15th. A one-two-punch if I ever saw one, and now, the chaos over the Obama wire tapes that are victimizing the Trump Administration.
Scroll down n on USAW and listen to the David stockman interview he talks about the debt ceiling issue and budget. Dear Greg, With a topic like child gate, and porngate ,how can this movement be stopped? Even a Believer does not stand in his or her own might. Eventually, silver will be worth more than gold for two reasons.
There are no known silver stockpiles of billions of ounces. I maintain that the most valuable resource in the future will be potable water, and silver will be the key purifier.
And any major war will require billions of ounces which are essentially non-available. I switched from WF to a credit union months ago. Regionals are at risk as well. Even after the switch, I keep only enough for Bill Pay and normal expenses. This spring is a critical time, due to the debt ceiling fight and international IMF actions. All banks could close for a period of time; credit will cease to exist; transportation of goods will cease; grocery shelves will empty within 24 hours.
Be careful, folks and be prepared. Bloomberg Folks — The fox is just about ready to enter the henhouse! I ask this question. When the silver price sky rockets thru the ceiling, who will we sell to. At that price, who can afford it?
Flattop the people who made a fortune in the stock markets around the world will transition into precious metals when the SHTF. However one chooses to call the deep state, Bilderbergers,.
Trilaterals or whatever, I have shared the premise they are losing control. How they reached this point IMHO started with countries outside their control.
The Deep State ultimately comes down to money. Money comes down to banks. The banks have been an integral part of the deep state enterprise. In prior instances, the Deep State tried to coopt unruly participants by offering them a seat at the table. With the Soviet Union and China, they met with some success. Jihad was something different. The rise of orthodox islam seemed manageable for a while.
As islam has increasingly become a non state entity, it presented a command and control problem. As the deep state tried and tried to implement anything that could resolve the problem, they alienated the American people. The exposure became more and more obvious as immigration, the TPP, Iran nuke deal, and lastly the vehemence towards President Trump reached outlandish proportions. I was onsite working as a Network Engineer after I had setup 4 floors at the UBS facilty, the office I was in had a birds eye view of the tip of Manhattan.
Felt like most of what we see and hear is a lie and that I needed to breakaway from working in NYC and any other big city. Few years later I relocated to the my families abandoned farm in upstate NY, 5 hours north of Manhattan, and learned how to live of the land.
So I have literally been watching, waiting, and seeing everything unfold over the last 16 years…during this time noticed a major polarization in the country as if sides are literally being drawn in order to have the country turn against itself, call it a civil war in the making.
You really can never be prepared for this sort of event, just like , you can only hope to survive it or luckily be in the right place. You are quite right there is some much data and Matierial to cover with Clif High. Perhaps you might consider doing an interview of 2 hours but break it down into 3 shows of 40 Minutes. One could be the economy with precious metals , next one on Antarctica-Mars and Woo-Woo and the last segment on the future. Clif has wonderful information on health and medicine, weather and shifting nature of our climate, land formations, water conditions and natural disasters.
Oddly enough, while the Swedish government is relentless in their pursuit of Assange for a rape that never happened, they are afraid to even admit any knowledge of the hundreds, perhaps thousands, of rapes perpetrated against young Swedish women by their middle eastern guests.
Swedish women it seems were reserved for violent sex education for refugees. Yet in the U. But they dont have all these children [just boys], running around the nation without their parents. There back home minding the mint, gold, black gold, Texas T! In my opinion, we are watching the methodical destruction of Sweden.
A once great country will be taken to zero, then be rebuilt by the NWO. I believe the great people of Sweden are beginning to realize this, but it might be too late. They need a Donald Trump! I love your enthusiasm! You are a very nice man. Thank you, it keeps us having faith. The only thing slightly positive about Bitcoin is that it shows there is genuine distrust of fiat currencies and the governments that produce them.
I would love for Clif or someone else to demonstrate how Bitcoin is ANY different than dollar digits on a computer. If the grid goes down what have you got? Can you carry Bitcoin with you? Can you use it to barter with the common man on the street? Nothing, no, and no are the answers. How then is Bitcoin valuable to the average person? Not trying to be combative here. Hillary was already plotting that one Mme me me me. Seems strange that all these people and countries have these recordings and not one peep leak?
Shame on you shadow people and public sock puppeteers an racketeers! Yes mark his foreboding words, Scaredy, fat cats! The American people have always been smarter than you powers that was.
Try reading a history book sometime you smarties! Now what can we say, to really make you all lose your minds, even more so? Regime change in Washington, not Moscow! Lying murdering war-mongering whore-mastering political pied pipers.
Its simple, keep it simple, good against evil. Thats why we won and your yet, to lose big time. But you all took the bait along with your mad-man nervous wreck. All our so-called intell following the biggest loser. All your intell and psy-ops bull and you never figured out the con was on you all! And your supposed to be the neo-conmen and conwoman.
You better screen your people much better, new sheriff in town! So your all on notice. That this town was built by Americans for Americans and by golly its going to be run by real Patriotic Americans, not phony flag waving new world dis-order globalist, leftest, Muslim brotherhood, corporate media intell lackeys! Go do what you gotta do. Before I come for you! Lets get this show on the road. Peace and prosperity is coming down the mountain. Here she comes, here she comes!
Praise the Lord and pass the ammunition! Complicated set of circumstances and experiences https: Maybe even him when younger. When all else fails you can always pray, not just prey upon others, especially fellow Amerikans.
What about if the government placing a 99 percent capital gains tax on any precious metals? Given that, even with the counter-party risks of the stock market, I feel safer with investing in miners and mining indexes. I am simply stating fact. I read all the comments and there are many people who are very smart and very connected. I learn as much from the comments as I do from interviews and reading the internet. Heck, the comments for many are the best part of the site and I think they make a very good point.
Steve what you saying is all possible and one should never store their entire wealth in one place for the very reason of being a hostage. Capital Gains Tax will be a huge problem for precious metals but as we are forced into a cashless society where precious metals will become the new cash and we will deal with like minded people to avoid such tax.
Gold and silver miners are at even more risk of confiscation in the form of nationalisation. Failing that the government could slap a higher tax rate on miners profits. Personally, I think governments will target the low hanging fruit first. Great show as always Greg. Clif is a very interesting guy. I hope the optimism re Trump is well founded but i get mixed signals from Trump.
I am pleased he prevented Clinton from winning and delighted that he takes on the fake media but I am horrified by his intention to spend yet more on the war machine. Is it business as usual for the pentagon? I say give Trump a chance but we should certainly be looking for the next Ron Paul at the same time.
I hear you loud and clear! Even Carson, the only other person on the stage that I would have expected to have the decency to support this concept, wanted to increase the military. What a wet blanket he turned out to be! I was shocked to hear Trump rudely insult Paul in one of the early debates and to state that Paul… [and I quote]….. This lack of support, whatever the figure happened to be proved two things; A The shamefull loss of a moral compass for the people of America B Their astonishing inability to recognise and support a candidate that would both challenge the deep state creature at every level and to begin the monumental task of dismantling the military-industrial establishment.
The people were too stupid to recognise this….. Rand Paul was right under their noses. Greg; I sure like your site. I always get good actionable info. Should Clif High be correct about silver I am on my way to be a millionaire several times over. I will be able to help my family, my church and other deserving people. I knew this crisis was coming and got out of the stock market just before the crash of o8 and bought silver and continue to stack as much as I can afford.
Continue success with your site. Last month, Clif High said that interest rates are going to spike into the double digits. Sounds divided, to say the least. Last time he could not predict or put firm numbers of Silver and gold but this time, he has it exactly and includes bitcoin, for good measure. Clearly, off-the-wall, at least.
Bitcoin 4 no subtract Bitcoin 4 because of computer hacking, and EMP blast. How many forms of computer money can be created. Each country can have their own. Sounds a bit unbelievable bitcoin could be worth more then gold and silver in everyday usage by 7 billion people. Well it was interesting to listen to the interview. The exchange of value must have, in some basis, intrinsic, stable, and commonly agreed upon value. Barter is the best example, where proportion varies to agreed value.
Fiat is convenience for commerce sake: Good money will be hoarded, and bad will replace it — so that ALL the nations must come to the same table of guaranteeing basic value. Charles in desperate times honesty thrives. What will be their currency? I only know a couple that use a computer to conduct business. One lives 4 doors away from my home. Think of all the poor country folks in the world, there are millions.
There is none so blind as those that will not see. The globalists have had control of a self serving agenda founded on corruption, greed and deceit however the people of fly over country have finally clued in and now that they are awake and aware there is no going back to sleep.
So the powers that be that have profited hugely from their criminal enterprise are about to unmasked and prosecuted so they shit their pants in terror and will attempt anything and everything to bring down Trump. Payback is a bitch. Quite a bit was said in this interview about the banks and the FDIC which I would like to comment on.
Clif High said that the future banking crisis will not happen the way Bill Holter believes, in such a real short period of time. Clif High is correct. It will take many weeks, if not months or years, for the banking crisis to play out. Every bank is not going to be affected the same way or at the same time. Some may not even really be affected at all. The governments and regulators do have plans and tools that would at least slow the spread and most likely minimize the damage of any banking crisis.
But not necessarily stop it. Clif High said if some of the regional banks go down you will not have access to your cash. Well that could very well be true. Most times when a bank fails it is acquired by another bank and the deposits transferred to the acquiring bank. Depositors then have access to their money immediately. However if there is no acquiring bank then the failed bank will be liquidated.
Depositors will be mailed a check up to the insured amount usually within a few days. However for amounts above the insured amount, the depositor usually would have to file a claim against the estate of the failed bank and hope to at least get some of it back. We can eliminate the bank entirely from the protocol. This changes the nature of the currency considerably.
It means that there is no longer any single organization in charge of the currency. The idea is to make it so everyone collectively is the bank. You can think of this as a shared public ledger showing all Infocoin transactions. Now, suppose Alice wants to transfer an infocoin to Bob.
A more challenging problem is that this protocol allows Alice to cheat by double spending her infocoin. And so they will both accept the transaction, and also broadcast their acceptance of the transaction. How should other people update their block chains? There may be no easy way to achieve a consistent shared ledger of transactions. And even if everyone can agree on a consistent way to update their block chains, there is still the problem that either Bob or Charlie will be cheated.
At first glance double spending seems difficult for Alice to pull off. After all, if Alice sends the message first to Bob, then Bob can verify the message, and tell everyone else in the network including Charlie to update their block chain.
Once that has happened, Charlie would no longer be fooled by Alice. So there is most likely only a brief period of time in which Alice can double spend. Worse, there are techniques Alice could use to make that period longer. She could, for example, use network traffic analysis to find times when Bob and Charlie are likely to have a lot of latency in communication. Or perhaps she could do something to deliberately disrupt their communications.
If she can slow communication even a little that makes her task of double spending much easier. How can we address the problem of double spending? Rather, he should broadcast the possible transaction to the entire network of Infocoin users, and ask them to help determine whether the transaction is legitimate.
If they collectively decide that the transaction is okay, then Bob can accept the infocoin, and everyone will update their block chain. Also as before, Bob does a sanity check, using his copy of the block chain to check that, indeed, the coin currently belongs to Alice. But at that point the protocol is modified. Other members of the network check to see whether Alice owns that infocoin.
This protocol has many imprecise elements at present. Fixing that problem will at the same time have the pleasant side effect of making the ideas above much more precise. Suppose Alice wants to double spend in the network-based protocol I just described.
She could do this by taking over the Infocoin network. As before, she tries to double spend the same infocoin with both Bob and Charlie. The idea is counterintuitive and involves a combination of two ideas: The benefit of making it costly to validate transactions is that validation can no longer be influenced by the number of network identities someone controls, but only by the total computational power they can bring to bear on validation.
But to really understand proof-of-work, we need to go through the details. For instance, another network user named David might have the following queue of pending transactions:. David checks his copy of the block chain, and can see that each transaction is valid. He would like to help out by broadcasting news of that validity to the entire network. However, before doing that, as part of the validation protocol David is required to solve a hard computational puzzle — the proof-of-work.
What puzzle does David need to solve? Bitcoin uses the well-known SHA hash function, but any cryptographically secure hash function will do. Suppose David appends a number called the nonce to and hashes the combination. The puzzle David has to solve — the proof-of-work — is to find a nonce such that when we append to and hash the combination the output hash begins with a long run of zeroes. The puzzle can be made more or less difficult by varying the number of zeroes required to solve the puzzle.
A relatively simple proof-of-work puzzle might require just three or four zeroes at the start of the hash, while a more difficult proof-of-work puzzle might require a much longer run of zeros, say 15 consecutive zeroes.
We can keep trying different values for the nonce,. Finally, at we obtain:. This nonce gives us a string of four zeroes at the beginning of the output of the hash. This will be enough to solve a simple proof-of-work puzzle, but not enough to solve a more difficult proof-of-work puzzle.
What makes this puzzle hard to solve is the fact that the output from a cryptographic hash function behaves like a random number: So if we want the output hash value to begin with 10 zeroes, say, then David will need, on average, to try different values for before he finds a suitable nonce.
In fact, the Bitcoin protocol gets quite a fine level of control over the difficulty of the puzzle, by using a slight variation on the proof-of-work puzzle described above. This target is automatically adjusted to ensure that a Bitcoin block takes, on average, about ten minutes to validate.
In practice there is a sizeable randomness in how long it takes to validate a block — sometimes a new block is validated in just a minute or two, other times it may take 20 minutes or even longer. Instead of solving a single puzzle, we can require that multiple puzzles be solved; with some careful design it is possible to considerably reduce the variance in the time to validate a block of transactions. Other participants in the Infocoin network can verify that is a valid solution to the proof-of-work puzzle.
And they then update their block chains to include the new block of transactions. For the proof-of-work idea to have any chance of succeeding, network users need an incentive to help validate transactions. The solution to this problem is to reward people who help validate transactions.
In particular, suppose we reward whoever successfully validates a block of transactions by crediting them with some infocoins. Provided the infocoin reward is large enough that will give them an incentive to participate in validation. In the Bitcoin protocol, this validation process is called mining. For each block of transactions validated, the successful miner receives a bitcoin reward. Initially, this was set to be a 50 bitcoin reward.
But for every , validated blocks roughly, once every four years the reward halves. This has happened just once, to date, and so the current reward for mining a block is 25 bitcoins.
This halving in the rate will continue every four years until the year CE. At that point, the reward for mining will drop below bitcoins per block. So in CE the total supply of bitcoins will cease to increase.
Bitcoin also makes it possible to set aside some currency in a transaction as a transaction fee , which goes to the miner who helps validate it. In the early days of Bitcoin transaction fees were mostly set to zero, but as Bitcoin has gained in popularity, transaction fees have gradually risen, and are now a substantial additional incentive on top of the 25 bitcoin reward for mining a block.
You can think of proof-of-work as a competition to approve transactions. Each entry in the competition costs a little bit of computing power. So, for instance, if a miner controls one percent of the computing power being used to validate Bitcoin transactions, then they have roughly a one percent chance of winning the competition.
So provided a lot of computing power is being brought to bear on the competition, a dishonest miner is likely to have only a relatively small chance to corrupt the validation process, unless they expend a huge amount of computing resources.
Before doing that, I want to fill in an important detail in the description of Infocoin. The pointer is actually just a hash of the previous block. So typically the block chain is just a linear chain of blocks of transactions, one after the other, with later blocks each containing a pointer to the immediately prior block:.
Occasionally, a fork will appear in the block chain. This can happen, for instance, if by chance two miners happen to validate a block of transactions near-simultaneously — both broadcast their newly-validated block out to the network, and some people update their block chain one way, and others update their block chain the other way:.
The rule is this: But at any given time, miners only work to extend whichever fork is longest in their copy of the block chain. Suppose, for example, that we have a fork in which some miners receive block A first, and some miners receive block B first. Those miners who receive block A first will continue mining along that fork, while the others will mine along fork B.
After they receive news that this has happened, the miners working on fork A will notice that fork B is now longer, and will switch to working on that fork. Presto, in short order work on fork A will cease, and everyone will be working on the same linear chain, and block A can be ignored. Of course, any still-pending transactions in A will still be pending in the queues of the miners working on fork B, and so all transactions will eventually be validated.
Likewise, it may be that the miners working on fork A are the first to extend their fork. In that case work on fork B will quickly cease, and again we have a single linear chain. No matter what the outcome, this process ensures that the block chain has an agreed-upon time ordering of the blocks. In Bitcoin proper, a transaction is not considered confirmed until: This gives the network time to come to an agreed-upon the ordering of the blocks.
Suppose Alice tries to double spend with Bob and Charlie. One possible approach is for her to try to validate a block that includes both transactions. Assuming she has one percent of the computing power, she will occasionally get lucky and validate the block by solving the proof-of-work. Unfortunately for Alice, the double spending will be immediately spotted by other people in the Infocoin network and rejected, despite solving the proof-of-work problem.
A more serious problem occurs if she broadcasts two separate transactions in which she spends the same infocoin with Bob and Charlie, respectively.
She might, for example, broadcast one transaction to a subset of the miners, and the other transaction to another set of miners, hoping to get both transactions validated in this way. In fact, knowing that this will be the case, there is little reason for Alice to try this in the first place. She will then attempt to fork the chain before the transaction with Charlie, adding a block which includes a transaction in which she pays herself:. And unless Alice is able to solve the proof-of-work at least as fast as everyone else in the network combined — roughly, that means controlling more than fifty percent of the computing power — then she will just keep falling further and further behind.
Of course, she might get lucky. We can, for example, imagine a scenario in which Alice controls one percent of the computing power, but happens to get lucky and finds six extra blocks in a row, before the rest of the network has found any extra blocks. In this case, she might be able to get ahead, and get control of the block chain.
But this particular event will occur with probability. Of course, this is not a rigorous security analysis showing that Alice cannot double spend.
The security community is still analysing Bitcoin, and trying to understand possible vulnerabilities. The proof-of-work and mining ideas give rise to many questions. How much reward is enough to persuade people to mine? How does the change in supply of infocoins affect the Infocoin economy? Will Infocoin mining end up concentrated in the hands of a few, or many?
These are all great questions, but beyond the scope of this post. I may come back to the questions in the context of Bitcoin in a future post. To use Bitcoin in practice, you first install a wallet program on your computer. You can see the Bitcoin balance on the left — 0. What you do is tell your wallet program to generate a Bitcoin address. You then send your Bitcoin address to the person who wants to buy from you. You could do this in email, or even put the address up publicly on a webpage.
This is safe, since the address is merely a hash of your public key, which can safely be known by the world anyway. The person who is going to pay you then generates a transaction. Line 1 contains the hash of the remainder of the transaction, 7c This is used as an identifier for the transaction.
Lines 3 and 4 tell us that the transaction has one input and one output, respectively. Line 6 tells us the size in bytes of the transaction. Lines 7 through 11 define the input to the transaction. In particular, lines 8 through 10 tell us that the input is to be taken from the output from an earlier transaction, with the given hash , which is expressed in hexadecimal as ae Line 11 contains the signature of the person sending the money, Again, these are both in hexadecimal.
This seems like an inconvenient restriction — like trying to buy bread with a 20 dollar note, and not being able to break the note down. The solution, of course, is to have a mechanism for providing change. Lines 12 through 14 define the output from the transaction. In particular, line 13 tells us the value of the output, 0. Line 14 is somewhat complicated. The main thing to note is that the string a7db6f You can now see, by the way, how Bitcoin addresses the question I swept under the rug in the last section: In fact, the role of the serial number is played by transaction hashes.
In the transaction above, for example, the recipient is receiving 0. There are two clever things about using transaction hashes instead of serial numbers. Second, by operating in this way we remove the need for any central authority issuing serial numbers. Instead, the serial numbers can be self-generated, merely by hashing the transaction.
Ultimately, this process must terminate. This can happen in one of two ways. This is a special transaction, having no inputs, but a 50 Bitcoin output. In other words, this transaction establishes an initial money supply.
You can see the deserialized raw data here , and read about the Genesis block here. With the exception of the Genesis block, every block of transactions in the block chain starts with a special coinbase transaction.
This is the transaction rewarding the miner who validated that block of transactions. It uses a similar but not identical format to the transaction above. You can read a little more about coinbase transactions here. The obvious thing to do is for the payer to sign the whole transaction apart from the transaction hash, which, of course, must be generated later. Currently, this is not what is done — some pieces of the transaction are omitted.
This makes some pieces of the transaction malleable , i. I gather that this malleability is under discussion in the Bitcoin developer community, and there are efforts afoot to reduce or eliminate this malleability. In the last section I described how a transaction with a single input and a single output works. Line 1 contains the hash of the remainder of the transaction. As in the single-input-single-output case this is set to 0, which means the transaction is finalized immediately.
Lines 7 through 19 define a list of the inputs to the transaction. Each corresponds to an output from a previous Bitcoin transaction. Line 11 contains the signature, followed by a space, and then the public key of the person sending the bitcoins. Lines 12 through 15 define the second input, with a similar format to lines 8 through And lines 16 through 19 define the third input.
The first output is defined in lines 21 and Line 21 tells us the value of the output, 0. The main thing to take away here is that the string e8c One apparent oddity in this description is that although each output has a Bitcoin value associated to it, the inputs do not. Of course, the values of the respective inputs can be found by consulting the corresponding outputs in earlier transactions. In a standard Bitcoin transaction, the sum of all the inputs in the transaction must be at least as much as the sum of all the outputs.
The only exception to this principle is the Genesis block, and in coinbase transactions, both of which add to the overall Bitcoin supply. If the inputs sum up to more than the outputs, then the excess is used as a transaction fee.
This is paid to whichever miner successfully validates the block which the current transaction is a part of. One nice application of multiple-input-multiple-output transactions is the idea of change. Suppose, for example, that I want to send you 0. I can do so by spending money from a previous transaction in which I received 0.
The solution is to send you 0. Of course, it differs a little from the change you might receive in a store, since change in this case is what you pay yourself. But the broad idea is similar. That completes a basic description of the main ideas behind Bitcoin. But I have described the main ideas behind the most common use cases for Bitcoin.
How anonymous is Bitcoin? Many people claim that Bitcoin can be used anonymously. This claim has led to the formation of marketplaces such as Silk Road and various successors , which specialize in illegal goods.
However, the claim that Bitcoin is anonymous is a myth. The block chain is a marvellous target for these techniques. I will be extremely surprised if the great majority of Bitcoin users are not identified with relatively high confidence and ease in the near future.
Furthermore, identification will be retrospective, meaning that someone who bought drugs on Silk Road in will still be identifiable on the basis of the block chain in, say, These de-anonymization techniques are well known to computer scientists, and, one presumes, therefore to the NSA. I would not be at all surprised if the NSA and other agencies have already de-anonymized many users.
It is, in fact, ironic that Bitcoin is often touted as anonymous. Bitcoin is, instead, perhaps the most open and transparent financial instrument the world has ever seen. Can you get rich with Bitcoin? I must admit I find this perplexing.
What is, I believe, much more interesting and enjoyable is to think of Bitcoin and other cryptocurrencies as a way of enabling new forms of collective behaviour. But if money in the bank is your primary concern, then I believe that other strategies are much more likely to succeed.
One is a nice space-saving trick used by the protocol, based on a data structure known as a Merkle tree. You can get an overview in the original Bitcoin paper. You can read more about it at some of the links above. But this is only a small part of a much bigger and more interesting story. But the scripting language can also be used to express far more complicated transactions. To put it another way, Bitcoin is programmable money.
In later posts I will explain the scripting system, and how it is possible to use Bitcoin scripting as a platform to experiment with all sorts of amazing financial instruments.
You can tip me with Bitcoin! You may also enjoy the first chapter of my forthcoming book on neural networks and deep learning, and may wish to follow me on Twitter. In my legally uninformed opinion digital money may make this issue more complicated.
At least naively, it looks more like speech than exchanging copper coins, say. Thanks, I was always too lazy to look up BTC in detail. Your article cleared most of my questions.
I wanted to know one thing what if some smart hacker is able to find some vulnerability in the protocol and he uses that to generate new bitcoins for himself. Once that happens then whole confidence in bitcoins would be gone and it would lead to chaos. Your scenario is possible.
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