L3 - Bitcoin Basics Flashcards
Who invented Bitcoin and when?
By Satoshi Nakamoto in 2008
When was the first block mined?
2009
Three key properties of bitcoin blockchain
- Trust Free
- Tamper-Resistant (resistant to manipulation)
- Transparent (every participant can read and validate all info and the current state)
Structure of a block
- Block size
- Block header
- transaction counter
- transactions
What does the block header include?
- Version
- Hash of previous block
- Hash of Merkle root
- Timestamp
- Difficulty
- Nonce
What creates the chaining?
Hash of previous block
Based on what is the block’s hash which is used for chaining calculated?
From the version until the nonce field.
What is the block height?
The current block height is simply the number of blocks in the blockchain minus one.
Where is the height of the block stored in?
The coinbase transaction (TX0)
What is there to know about the Genesis block?
- references a previous block with hash 0
- contains only the mining reward transaction (first 50 BTC which can never be spent)
Where are account balances calculated?
Off-chain (in a wallet). Transactions lead to a world-state. Bitcoin uses a transaction-based ledger and does not add up account balances.
Where can wallet owners define conditional transactions?
Using Bitcoin Script
What are the inputs in a TX)
former outputs
TXin meaning
transaction input
TXout
transaction output
Which transactions have no Txin?
Transactions where new coins are created
What is TxID
Each transaction has a unique identifier TxID.
What is the change address?
The address the money is sent back to is called a change address. In Bitcoin, either all or none of the coins have to be consumed by another transaction. This enables efficient verification, as one only has to keep a list of UTXO.
What is consolidating funds?
Instead of having many UTXO a user can create a transaction that uses all the UTXO she has and creates a single UTXO with all the coins in it.
What is a joint payment?
Two or more parties can combine their input and create one output. Of course, it requires signatures from all involved parties.
coinbase transaction
A coinbase transaction is the first transaction in a block. It is a unique type of bitcoin transaction that can be created by a miner. The miners use it to collect the block reward for their work and any other transaction fees collected by the miner are also sent in this transaction.
Does the input store the BTC value and the receiver’s address?
No, only the outputs store the BTC value and the receiver’s address