Mbtc Meetup

[Mark Tracy]

Unfortunatelythe book does not seem to be available in German yet. The second edition is also available in Spanish and Romanian. The first edition in Chinese, Brazilian Portuguese, Japanese, Greek, Czech and Hungarian. You can either listen to the first chapter above or read it after the following small anecdote:

In October 2016 Openstream founder Nick Weisser attended a meetup at Glockenhof Zrich about freedom of speech and finances by author and keynote speaker Andreas M. Antonopoulos, organized by the Bitcoin Association Switzerland. Bitcoin Meetup Switzerland often had been attracting around 50-100 attendees, but this evening in 2016 was different. Around 300 Bitcoin enthusiasts came to listen to one of the most knowledgable speakers on the topic of Bitcoin and blockchain.

Back in 2014, Andreas published the first edition of Mastering Bitcoin, a book for developers. The first two chapters cover bitcoin at a level that is also approachable to non-programmers. Anyone with a basic understanding of technology can read the first two chapters to understand how bitcoin works.

Bitcoin is a collection of concepts and technologies that form the basis of a digital money ecosystem. Units of currency called bitcoin are used to store and transmit value among participants in the bitcoin network. Bitcoin users communicate with each other using the bitcoin protocol primarily via the internet, although other transport networks can also be used. The bitcoin protocol stack, available as open source software, can be run on a wide range of computing devices, including laptops and smartphones, making the technology easily accessible.

Users can transfer bitcoin over the network to do just about anything that can be done with conventional currencies, including buying and selling goods, sending money to people or organizations, or extending credit. Bitcoin can be purchased, sold, and exchanged for other currencies at specialized currency exchanges. Bitcoin in a sense is the perfect form of money for the internet because it is fast, secure, and borderless.

Behind the scenes, bitcoin is also the name of the protocol, a peer-to-peer network, and a distributed computing innovation. The bitcoin currency is really only the first application of this invention. Bitcoin represents the culmination of decades of research in cryptography and distributed systems and includes four key innovations brought together in a unique and powerful combination. Bitcoin consists of:

The emergence of viable digital money is closely linked to developments in cryptography. This is not surprising when one considers the fundamental challenges involved with using bits to represent value that can be exchanged for goods and services. Three basic questions for anyone accepting digital money are:

When cryptography started becoming more broadly available and understood in the late 1980s, many researchers began trying to use cryptography to build digital currencies. These early digital currency projects issued digital money, usually backed by a national currency or precious metal such as gold.

Although these earlier digital currencies worked, they were centralized and, as a result, were easy to attack by governments and hackers. Early digital currencies used a central clearinghouse to settle all transactions at regular intervals, just like a traditional banking system. Unfortunately, in most cases, these nascent digital currencies were targeted by worried governments and eventually litigated out of existence. Some failed in spectacular crashes when the parent company liquidated abruptly. To be robust against intervention by antagonists, whether legitimate governments or criminal elements, a decentralized digital currency was needed to avoid a single point of attack. Bitcoin is such a system, decentralized by design, and free of any central authority or point of control that can be attacked or corrupted.

Bitcoin was invented in 2008 with the publication of a paper titled Bitcoin: A Peer-to-Peer Electronic Cash System, written under the alias of Satoshi Nakamoto (see bitcoin.org/bitcoin.pdf). Nakamoto combined several prior inventions such as b-money and HashCash to create a completely decentralized electronic cash system that does not rely on a central authority for currency issuance or settlement and validation of transactions. The key innovation was to use a distributed computation system (called a Proof-of-Work algorithm) to conduct a global election every 10 minutes, allowing the decentralized network to arrive at consensus about the state of transactions. This elegantly solves the issue of double-spend where a single currency unit can be spent twice. Previously, the double-spend problem was a weakness of digital currency and was addressed by clearing all transactions through a central clearinghouse.

Satoshi Nakamoto withdrew from the public in April 2011, leaving the responsibility of developing the code and network to a thriving group of volunteers. The identity of the person or people behind bitcoin is still unknown. However, neither Satoshi Nakamoto nor anyone else exerts individual control over the bitcoin system, which operates based on fully transparent mathematical principles, open source code, and consensus among participants. The invention itself is groundbreaking and has already spawned new science in the fields of distributed computing, economics, and econometrics.

Bob, the cafe owner in Palo Alto, is building a new website. He has contracted with an Indian web developer, Gopesh, who lives in Bangalore, India. Gopesh has agreed to be paid in bitcoin. This story will examine the use of bitcoin for outsourcing, contract services, and international wire transfers.

Gabriel is an enterprising young teenager in Rio de Janeiro, running a small web store that sells bitcoin-branded t-shirts, coffee mugs, and stickers. Gabriel is too young to have a bank account, but his parents are encouraging his entrepreneurial spirit.

Jing is a computer engineering student in Shanghai. He has built a mining rig to mine for bitcoin using his engineering skills to supplement his income. This story will examine the industrial base of bitcoin: the specialized equipment used to secure the bitcoin network and issue new currency.

Bitcoin is a protocol that can be accessed using a client application that speaks the protocol. A bitcoin wallet is the most common user interface to the bitcoin system, just like a web browser is the most common user interface for the HTTP protocol. There are many implementations and brands of bitcoin wallets, just like there are many brands of web browsers (e.g., Chrome, Safari, Firefox, and Internet Explorer). And just like we all have our favorite browsers (Mozilla Firefox, Yay!) and our villains (Internet Explorer, Yuck!), bitcoin wallets vary in quality, performance, security, privacy, and reliability. There is also a reference implementation of the bitcoin protocol that includes a wallet, known as the Satoshi Client or Bitcoin Core, which is derived from the original implementation written by Satoshi Nakamoto.

Bitcoin wallets are one of the most actively developed applications in the bitcoin ecosystem. There is intense competition, and while a new wallet is probably being developed right now, several wallets from last year are no longer actively maintained. Many wallets focus on specific platforms or specific uses and some are more suitable for beginners while others are filled with features for advanced users. Choosing a wallet is highly subjective and depends on the use and user expertise. Therefore it would be pointless to recommend a specific brand or wallet. However, we can categorize bitcoin wallets according to their platform and function and provide some clarity about all the different types of wallets that exist. Better yet, moving keys or seeds between bitcoin wallets is relatively easy, so it is worth trying out several different wallets until you find one that fits your needs.

A desktop wallet was the first type of bitcoin wallet created as a reference implementation and many users run desktop wallets for the features, autonomy, and control they offer. Running on general-use operating systems such as Windows and Mac OS has certain security disadvantages, however, as these platforms are often insecure and poorly configured.

A mobile wallet is the most common type of bitcoin wallet. Running on smart-phone operating systems such as Apple iOS and Android, these wallets are often a great choice for new users. Many are designed for simplicity and ease-of-use, but there are also fully featured mobile wallets for power users.

Hardware wallets are devices that operate a secure self-contained bitcoin wallet on special-purpose hardware. They are operated via USB with a desktop web browser or via near-field-communication (NFC) on a mobile device. By handling all bitcoin-related operations on the specialized hardware, these wallets are considered very secure and suitable for storing large amounts of bitcoin.

The keys controlling bitcoin can also be printed for long-term storage. These are known as paper wallets even though other materials (wood, metal, etc.) can be used. Paper wallets offer a low-tech but highly secure means of storing bitcoin long term. Offline storage is also often referred to as cold storage.

A lightweight client, also known as a simple-payment-verification (SPV) client, connects to bitcoin full nodes (mentioned previously) for access to the bitcoin transaction information, but stores the user wallet locally and independently creates, validates, and transmits transactions. Lightweight clients interact directly with the bitcoin network, without an intermediary.

A third-party API client is one that interacts with bitcoin through a third-party system of application programming interfaces (APIs), rather than by connecting to the bitcoin network directly. The wallet may be stored by the user or by third-party servers, but all transactions go through a third party.

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