Learning Bitcoin and Cryptocurrencies 1 Basic Concepts
Note
What is Bitcoin?
Basic Concept
The first and most widely used cryptocurrency: completely digital, decentralized, currency built on principles of computer science, cryptography, and economics
Bitcoin: refers to the community, the network, and the software
bitcoins: the currency itself, a unit
Inspiration for the blockchain: the underlying data structure that stores a permanent history of all transactions to ever occur the history of bitcoin
The Cypherpunks Movement
Cypherpunks = a group of people who advocate for the protection of privacy using cyptography
Bitcoin was created by Satoshi Nakamoto in 2009. He created the first ever decentralized, pseudonymous, and trustless system for transactions
Satoshi Nakamoto’s Innovation
Bitcoin attempts to solve two problems that decentralized networks typically face:
- Inconsistent transactions records held by different nodes
- Malicious pseudonymous actors might broadcast false messages and divide the network
Double spending attack: asynchronous records held by different nodes
The blockchain and consensus protocol are the solution
Bitcoin vs. Banks
Banks Services
Account and identity management
Service
Record management
Trust