Raise your hand if you haven't read the Bitcoin White Paper!
If you're reading this, maybe we've alluded to it, haha.
Until now I haven't paid enough interest to read this document, which was left to us by Satoshi Nakamoto, the anonymous author of Bitcoin. For that reason, I will try to describe it briefly together with some infographics. I hope that the readers can correct me in those errors that they have detected or discuss some of the functionalities of the blockchain system.
Spanish Whitepaper: https://bitcoin.org/files/bitcoin-paper/bitcoin_es.pdf
English Whitepaper (Original): https://bitcoin.org/bitcoin.pdf
Satoshi Nakamoto
October 31, 2008, was the date when the author with the pseudonym Satoshi Nakamoto shared an image from the White Paper of how Bitcoin was going to work, with it the blockchain system.
The first block of the blockchain, the genesis block, was not unlocked until January 3, 2009.
Blockchain
The Bitcoin blockchain method is a way to send money online. This way it proposes is through an encrypted calculation using a peer to peer (P2P) network.
To make a blockchain that respects integrity, order, and that your system can't be fraudulently overwritten, the chain establishes a record that can't be modified without resetting the proof of work.
The blockchain is controlled by nodes, which in itself requires a minimum structure. The longer and more nodes there are in your network system, the more secure and difficult it is to counteract.
Today's payment system depends on the trust of a third party. Bitcoin has made it possible to replace this trust in a payment system based on a cryptographic test.
That is, with the blockchain, there is no need for the interested parties to know each other and it allows transactions to be made directly between them without the need for a centralized server. This system is always secure when the network nodes control more power than any attacking cooperator.
The transaction
In transactions, we send the electronic currency (token) as a chain in the form of digital signatures. Each owner transfers the currency to the next owner by digitally signing a hash of the previous transaction. In order to know that the user has not sent that amount of money twice, the block system has knowledge of all transactions made so far and will be verified until it is decided which transfer came first.
To achieve this without the involvement of a trusted party, transactions are publicly announced and a system is needed where participants agree on a single history of the order in which they were received. The beneficiary needs proof that at the time of the transaction all the nodes agreed that it was the first one received. Each block can hold up to 2048 transactions.
The Hash
The hash represents a digital signature that comes from a cryptographic operation. This hash serves to respect the order of the blocks and protect the information of the same chain.
We could imagine the hash as a fingerprint. A mathematical algorithmic code that transforms any arbitrary block of data into a new series of craters with a long independent alphanumeric length.
Proof of Work (PoW)
The proof of work serves to prevent unwanted behavior by parties on the network. In Bitcoin, it consists of scanning a value that was hashed out.
This hash starts with a zero bit number along with another number that must be resolved. The nodes play the role of looking for a random calculation since there is no mathematical way to find out the required value.
To find the corresponding hash (SHA-256), the miners must find that value by doing calculations at the maximum possible speed. The difficulty of the proof of work is determined by a moving average that points to an average number of blocks per hour. The difficulty level of each block is approximately 10 minutes. If it generates the answer to the unknown to solve this hash very quickly, the difficulty increases.
The hash will rewrite the header of the next block, respecting the previous hash. If a single bit is modified, the hash will no longer match. For this, the whole blockchain should be rewritten.
Hashes, which work like branches of a tree, include the root of each hash in the block. That is, the hash is formed by the root of each previous hash, to leave space or disk memory in each next block.
The verification
To verify that payment or transaction has been made, the user needs a copy of the block header. This is sealed in time, waiting for a whole block to be written. Miners, on the other hand, can verify the transactions on the spot.
When a node finds the answer to the SHA-256 question, it automatically communicates to the other nodes and thus verifies the entire block. A new hash is created, it checks that the header matches the hash of the previous block, that the answer to the unknown in the block is correct, and that the transactions match the previous blocks. With all these requirements you can write a new block.
The incentive
To support this network, from the incision of the first block an incentive is added to the nodes, thus providing a way to put the coins into circulation.
This incentive is also based on the transaction fees that are added to the incentive value of the block containing the same transaction. A variable incentive is free of inflation.
Currently, this incentive is 6.25 BTC for each block, the miner will receive this incentive in a transaction that will be written together with the other transactions of that same block.
In addition, it serves the participating nodes to assess whether to continue charging said incentives or between attacking users fraudulently by stealing the payments received.
The first node to find the answer to the question against the clock is who will receive the incentive.
Thanks for reading me!!