Understanding Bitcoin Transactions
Understanding Bitcoin Transactions
Key Insights
- Bitcoin builds upon the idea of an append-only ledger, decentralized consensus protocol, and miners validating transactions.
- Bitcoin's transaction model is based on inputs and outputs, involving scripts for complex transactions like joint payments and escrow transactions.
- The Bitcoin network operates as a P2P network with ad-hoc protocols and random topology, where nodes propagate transactions using a flooding mechanism.
- The lecture discusses fully-validating nodes and SPV clients. It also delves into the limitations and improvements such as hard forks and soft forks.
- Hard-coded limits in Bitcoin includes 10 minutes average creation time per block, 1 M bytes in a block, and 23M total bitcoins maximum.
Understanding Bitcoin Transactions
@financepresentations1 month ago
CS 4593/6463 -Bitcoins and Cryptocurrencies
Prof. Murtuza Jadliwala murtuza.jadliwala@utsa.edu
Note: most of the slides used in this course are derived from those available for the book 'Bitcoins and Cryptocurrencies Technologies - A Comprehensive Introduction', Arvind Narayanan, Joseph Bonneau, Edward Felten, Andrew Miller & Steven Goldfeder, 2016, Princeton University Press.
- · Decentralized consensus protocol
- · Append-only ledger
- · Miners to validate transactions
Lecture 3
Mechanics of Bitcoin
Recap: Bitcoin consensus
Bitcoin consensus gives us:
Assuming a currency exists to motivate miners!
In this chapter we will see how such a currency can be engineered
Bitcoin transactions
An account-based ledger ( not Bitcoin)
SIMPLIFICATION: only one transaction per block
A transaction-based ledger (Bitcoin)
Merging value
Joint payments
The real deal: a Bitcoin transaction
The real deal: transaction metadata
