How does Bitcoin work?


Ilya GrigorikIf you clearly understand how Bitcoin works then don’t bother reading this post. However, if you are like how I was before I read the article Minimum Viable Block Chain, and you are not clear about what Bitcoin is and how it works then please read on.

Bitcoin is a neat technical solution to the problem of how to ensure the integrity of a financial transaction without going through a central trusted authority.

It is a very intriguing and interesting technical solution!

The solution has three component:

  1. How to ensure the integrity of individual transaction using public-private key infrastructure (PKI)?
  2. How to verify multi-party transfers and guard against double spending through distributed consensus in peer-to-peer (P2P) network?
  3. How to protect the whole system from malicious attack through a block chain?

I don’t think I can explain this better than Ilya Grigorik – so read this post – Minimum Viable Block Chain.

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6 Responses to “How does Bitcoin work?”
  1. Yes by considering these stable prices already this year started to become year of bitcoin. But only a stable price will not make 2016, as year of bitcoin. But we need a new higher prices to make 2016 as year of bitcoin.

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