Bitcoin
, What is Bitcoin
• A distributed, decentralized digital currency system
• Based on blockchains
• No central administrative control by ad-hoc network
– Digital checks
– A distributed transaction log
• Transactions are stored into ledgers
• Ledgers are stored in blockchains
, Block
• It is collection of recent and verified transaction
• Bitcoin uses cryptography to control its creation and
management
• Only 21 million bitcoins can be generated
• Each block have three key components
– Hash of previous block
Previous Hash
– Data
– Proof-of-work Transactions
Proof-of-work
, Blockchain
• Blockchains are inherently decentralized systems which
consist of different actors who act on:
– Their incentives
– Information available to them
• Consensus is achieved
– When the majority of the actors which comprise the
network decide on a single state.
, What is Bitcoin
• A distributed, decentralized digital currency system
• Based on blockchains
• No central administrative control by ad-hoc network
– Digital checks
– A distributed transaction log
• Transactions are stored into ledgers
• Ledgers are stored in blockchains
, Block
• It is collection of recent and verified transaction
• Bitcoin uses cryptography to control its creation and
management
• Only 21 million bitcoins can be generated
• Each block have three key components
– Hash of previous block
Previous Hash
– Data
– Proof-of-work Transactions
Proof-of-work
, Blockchain
• Blockchains are inherently decentralized systems which
consist of different actors who act on:
– Their incentives
– Information available to them
• Consensus is achieved
– When the majority of the actors which comprise the
network decide on a single state.
