How does Bitcoin work?
If 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:
- How to ensure the integrity of individual transaction using public-private key infrastructure (PKI)?
- How to verify multi-party transfers and guard against double spending through distributed consensus in peer-to-peer (P2P) network?
- 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.
- Bitcoin Wikipedia Page
- Bitcoin: A Peer-to-Peer Electronic Cash System – Satoshi Nakamoto
- How does Bitcoin work?