Bitcoin has various technical ingredients that combine to provide extraordinary properties not seen in any other form of money available today. First, Bitcoin's immutable ledger enables transactions that are extremely hard to reverse or tamper with. Bitcoin mining also provides a link between real-world energy expenditure and the security of Bitcoin's ledger. Holding your own Bitcoin private keys enables the user to have custody of their own Bitcoins and control them exclusively. Finally, running a Bitcoin node allows users to fully self-validate their Bitcoins and ensure that the rules of Bitcoin are upheld. In this unit, we will also explore some of the trade-offs of Bitcoin against altcoins, and explore how Bitcoin has no leaders but still continues to advance and develop.
Completing this unit should take you approximately 2 hours.
Watch this video to learn a bit more about how the technology behind Bitcoin works. How does Bitcoin act like a ledger? How do Bitcoin transactions take place? How does Bitcoin, as a system, reduce the need for trust?
Listen to this podcast interview with Yan Pritzker for an introduction to Bitcoin mining. As you listen, consider the following questions. What does mining do, and how does it secure the Bitcoin network? Should you mine Bitcoin as a retail individual? How are Bitcoin miners compensated? What is the block reward, and what is the block subsidy?
Think of a Bitcoin node as a fake Bitcoin detector. Just as people transacting with gold want to use special equipment to verify that the gold is legitimate, Bitcoin nodes check the rules of Bitcoin and enable the user to interact with the Bitcoin network. Note, though, that some wallets connect to a central node and are run by a third party. You can run your own Bitcoin node for a more "trust-minimized" Bitcoin experience. When you run your own Bitcoin node and use it in conjunction with your own Bitcoin wallet (and private keys), you are said to be self-validating. This may be particularly useful in the case of verifying that you have truly received Bitcoins (rather than trusting another party or service to tell you and not lie to you). As you read this article, consider how Bitcoin can act as an impenetrable fortress of validation.
As you read this article by Pierre Rochard, consider the process for Bitcoin upgrades to take place. Note the different parties involved, such as Bitcoin developers and Bitcoin users. Using Bitcoin is a voluntary, opt-in choice, and while Bitcoin developers may write code, Bitcoin users do not necessarily have to run that code. In this way, the different parties within the Bitcoin ecosystem "check" each other. Recall the earlier material on Segwit2X and merging SegWit into the Bitcoin protocol, and the interplay between different actors in the Bitcoin space, such as exchanges, merchants, miners, developers, and users.
In this article, Jameson Lopp delves into further detail in how Bitcoin Core (the reference implementation of Bitcoin) is developed and how changes are made. As you read, consider the following questions. Which parties may propose upgrades? Which parties may block upgrades or changes to code? What other controls exist to stop unwanted or malicious code from entering the Bitcoin Core codebase?
In this interview with Jon Atack, you will learn about the process behind open source contribution to Bitcoin Core. As you listen, think about the discussions around the following topics. What is being worked on in Bitcoin right now? How do contributors to Bitcoin discuss and make decisions? What is the process of peer review for Bitcoin like?
For more technical information about contributing to Bitcoin Core, review this document from the Bitcoin Core code repository: https://github.com/Bitcoin/Bitcoin/blob/master/CONTRIBUTING.md#peer-review
As an optional extra, you may want to listen to this interview with Gloria Zhao for an enjoyable discussion on learning to become a Bitcoin Core contributor: https://stephanlivera.com/episode/216/
Read this article by Thib Maréchal on why battles in the monetary market are not about incremental technological features, but rather monetary properties.
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