Bitcoin is a decentralized P2P payment system that relies on PoW. Electronic payments are performed
by generating transactions that transfer Bitcoin
coins (BTCs) between Bitcoin peers. These
peers are referenced in each transaction by means
of virtual pseudonyms—referred to as Bitcoin addresses.
Generally, each peer has hundreds of different
Bitcoin addresses that are all stored and managed
by its (digital) wallet. Each address is mapped
through a transformation function to a unique public/private
key pair. These keys are used to transfer
the ownership of BTCs among addresses.
Peers transfer coins to each other by issuing a
transaction. A transaction is formed by digitally
signing a hash of the previous transaction where this
coin was last spent along with the public key of the
future owner and incorporating this signature in the
coin Any peer can verify the authenticity of a
BTC by checking the chain of signatures.
Transactions are included in Bitcoin blocks that
are broadcasted in the entire network. To prevent
double-spending of the same BTC, Bitcoin relies on
a hash-based PoW scheme. More specifically, to generate
a block, Bitcoin peers must find a nonce value
that, when hashed with additional fields (i.e., the
Merkle hash of all valid and received transactions,
the hash of the previous block, and a timestamp),
the result is below a given target value. If such a
nonce is found, peers then include it (as well as the
additional fields) in a block thus allowing any entity
to publicly verify the PoW. Upon successfully generating
a block, a peer is typically granted 50 new
BTCs. This provides an incentive for peers to continuously
support Bitcoin. Table 1 depicts the information
included in Bitcoin block number 80,000 as
reported in the Bitcoin block explorer.
The resulting block is forwarded to all peers in the network, who can then check its correctness by verifying the hash computation. If the block is “valid”, then the peers append it to their previously accepted blocks, thus growing the Bitcoin block chain. The main intuition behind Bitcoin is that for peers to double-spend a given BTC, they would have to replace the transaction where the BTC was spent and the corresponding block where it appeared in, otherwise their misbehavior would be detected immediately. This means that for malicious peers to double-spend a BTC without being detected, they would not only have to redo all the work required to compute the block where that BTC was spent, but also recompute all the subsequent blocks in the chain3 . This ensures that the Bitcoin network can counter such misbehavior as long as the fraction of honest peers in the network exceeds that of malicious colluding peers . In what follows, we provide a summary of the steps that peers undergo in Bitcoin when a payment occurs. Our Company Blockchain Help will help you with development of Crypto currencies, DAG Coin, Explorer, Mining Pools, Fork Coins
The resulting block is forwarded to all peers in the network, who can then check its correctness by verifying the hash computation. If the block is “valid”, then the peers append it to their previously accepted blocks, thus growing the Bitcoin block chain. The main intuition behind Bitcoin is that for peers to double-spend a given BTC, they would have to replace the transaction where the BTC was spent and the corresponding block where it appeared in, otherwise their misbehavior would be detected immediately. This means that for malicious peers to double-spend a BTC without being detected, they would not only have to redo all the work required to compute the block where that BTC was spent, but also recompute all the subsequent blocks in the chain3 . This ensures that the Bitcoin network can counter such misbehavior as long as the fraction of honest peers in the network exceeds that of malicious colluding peers . In what follows, we provide a summary of the steps that peers undergo in Bitcoin when a payment occurs. Our Company Blockchain Help will help you with development of Crypto currencies, DAG Coin, Explorer, Mining Pools, Fork Coins
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