Today we are going to learn about the history of bitcoin, and then we are going to learn about bitcoin wallets.

The history of Bitcoin

In 2008, bitcoin was invented by A man using the pseudonym Satoshi Nakamoto, who published A bitcoin paper: “A Peer-to-peer Electronic Cash System” (http://t.cn/8F8tYrP). Before making Bitcoin, he borrowed some ideas from electronic money, including B-Money and HashCash, but Nakamoto didn’t rely on any of these centralized issuance and settlement systems. Instead, he took a decentralized approach.

Satoshi nakamoto invented POW (Proof Of Work, or mining, as we call it) to complete elections every 10 minutes, so that a decentralized network can reach a consensus on the status Of transactions, ensuring system consistency. This algorithm greatly solves the problem of one transaction being consumed twice, a problem that was previously difficult to solve even with centralized currency systems.

The bitcoin network began operating in 2009, and the original prototype was written by Satoshi Nakamoto. After the project was opened to the public, it attracted a large number of programmers to participate in the revision. Proof-of-work algorithms provide bitcoin with security and adaptability, and computing power has exploded exponentially with the addition of miners. The entire network is now faster than all the supercomputers in the world combined, while Bitcoin’s market value continues to rise. The largest transaction in history was $150 million — once initiated, executed with low transaction fees.

Mr. Nakamoto has been out of the public eye since the spring of 2011, handing over responsibility for developing the code to community volunteers, so the man behind Bitcoin remains a mystery. But neither Satoshi nor any individual can overcontrol the entire bitcoin network, even though its algorithms and codes are open to the public. Bitcoin has opened up a new field, including distributed computing, economics and econometrics (http://sina.lt/fmCt).

Solutions to distributed computing problems

Satoshi nakamoto’s invention is an exercise ina well-known problem in distributed computing, the Byzantine General problem (http://sina.lt/fmCv). Simply put, this algorithm attempts to solve an unreliable network by getting all nodes to agree on a certain state. Nakamoto’s solution is proof-of-work, which forms consensus without the need for centralized authorization. This is an important breakthrough in distributed computing, which can be applied not only to digital currency, but also to fair elections, lotteries, asset registration, digital justice and many other aspects.

A quick note on my understanding of POW — how it addresses consistency issues and Double spending (http://sina.lt/fmCw) :

  1. Since only one machine modifies a block, it is naturally consistent

  2. Since POW algorithm is a random algorithm, any machine can be the machine to modify the block, plus the reward mechanism and other machines to verify the new block, so that the cost of maliciously tampering with the ledger is higher than the cost of not doing evil, ensuring that every transaction is correct.

For more on The history of Bitcoin, check out The documentary The Rise and Rise of Bitcoin.

Bitcoin wallet

In addition to the fact that the concept of Bitcoin is not intuitive, bitcoin wallets are one of the biggest barriers to getting to the app for beginners for several reasons

  1. The wallet itself was invisible

  2. There are many concepts such as public key, private key and address

  3. Unlike centralized products such as Alipay, where the security of the property is partially managed by a third party, the security of a Bitcoin wallet is completely managed by itself

As we discussed in the last post, you can prove your bitcoin as long as you keep your key, and a wallet is an application for keeping the key, which is why a wallet exists. Here’s a breakdown of wallets to give you a fuller picture:

Client – all nodes relative to light purse, this should be called “purse”, the client provides all COINS node function, including mining, validation, and light for the client to provide query interface, it stores all the trading data of the COINS network, because of this, it is the consumption of resources is more, For example, you need several hundred GB of disk space (more than 300GB is recommended), and you need at least 2GB of memory.

Light wallet — Light wallet is also called simple-payment-verification (SPV). The main function of light wallet is to provide payment or collection functions. It does not need to store all transaction information in the entire network, but obtains transaction information by connecting to all nodes in the network and invoking apis provided by nodes.

Third-party API clients – third parties, by which I mean, hand over wallets and keys to manage, typically provide a Web site, the most typical example being an exchange.

Hardware Wallet — The hardware that stores a Bitcoin wallet, which can be used on a computer via A USB port, or operated with a phone’s NFC. It’s very secure and recommended if you own a lot of Bitcoins.

Paper wallet — This method of storing keys on paper is not as high-tech as a hardware wallet, but it is also very secure. This method of storing keys offline is also called Cold Storage.

With the popularity of mobile Internet, the most popular wallet is the light wallet on mobile devices. As there are many kinds of wallets, we must be careful in the selection process. The market acceptance and the strength of the technical team are both worth considering.

To summarize, the wallet this concept is not so profound, it is just a piece of software, and the purse in real life: the wallet itself is not important, the wallet is filled with things is the most important, the currency is wallet containing your key, the key must be careful custody, had better be stored offline, because once out, consequence will be unimaginable.

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# 1 Know Bitcoin

Because knowledge planet is temporarily full, students who want to study with me should pay attention to my public account first, and then continue to open after joining. This year, I will do at least three things:

  1. Proficient in the implementation of Bitcoin

  2. Proficient in the implementation principle of EOS, and set about building applications on EOS

  3. Study whitepapers on other projects to find creative, worthwhile projects