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The ideas are beautiful, so if you’re not familiar with them, I recommend taking a few hours to get familiar.
It may seem surprising that Bitcoin’s basis is cryptography.
Even those articles which delve deeper often gloss over crucial points.
My aim in this post is to explain the major ideas behind the Bitcoin protocol in a clear, easily comprehensible way.
These are just two of the many problems that must be overcome in order to use information as money.
As a first version of Infocoin, let’s find a way that Alice can use a string of bits as a (very primitive and incomplete) form of money, in a way that gives her at least some protection against forgery.
And that’s why Bitcoin is at heart a cryptographic protocol.
In fact, the problems Bitcoin needs to solve are largely about securing transactions — making sure people can’t steal from one another, or impersonate one another, and so on.Suppose Alice wants to give another person, Bob, an infocoin.To do this, Alice writes down the message “I, Alice, am giving Bob one infocoin”.Of course, our first version of Infocoin will have many deficiencies, and so we’ll go through several iterations of Infocoin, with each iteration introducing just one or two simple new ideas.