

How Bitcoin Works Under the Hood [video] - nvk
https://www.youtube.com/watch?v=Lx9zgZCMqXE

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cstrat
I haven't been able to watch the video because I am at work, but I do have a
question.

The statistics on mining now show that it is quite unprofitable -
[http://blockchain.info/stats](http://blockchain.info/stats) Even if those
figures are taken with a grain of salt, its clearly not the profit machine it
once was.

Given that running a mining rig is becoming less and less profitable, won't we
end up in a situation where the only people running rigs are the ones that
have a vested interest in keeping the technology going... Probably reducing
the total size of the network down to a small group of collectives. Even worse
will be when there are no new coins being mined, profitability will be reduced
even further - and the mining difficulty will be massive given all the
dedicated mining rigs in the market from the boom time.

I jumped on the bandwagon early this year and speculated, gambled, purchased
and ended up cashing out before the issues with Liberty Reserve arose and
caused issues with my ability to deposit/withdraw from MtGox. So I have spent
quite a bit of time using the technology, but have been out of the loop for a
few months now.

~~~
nimrody
At some point the motivation for verifying transactions (mining) will become
the attached transaction fee.

At this point laws of supply&demand become applicable: If the number of miners
gets small, transaction fees will rise and mining becomes more profitable.

Of course this is all theoretical. The network might die if the number of
people accepting bitcoins as payment becomes too low.

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Aqueous
Another cool BitCoin video which is not very technical, but has impressive
visuals:

[http://vimeo.com/63502573](http://vimeo.com/63502573)

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lifeformed
If you can generate a new public key for every transaction, how does it know
what previous transactions to refer to as an input? I have a feeling it has
something to do with how key signing works, like signing your old key with
your new one or something, but I don't really know much about that.

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kimar
Very good video. Wish he had said a few words about how it all started and who
is behind the technology.

~~~
coo1k
[https://en.bitcoin.it/wiki/Satoshi_Nakamoto](https://en.bitcoin.it/wiki/Satoshi_Nakamoto)

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joemir
Seems very accurate.

~~~
M4v3R
One (small) thing that isn't correct is that your Bitcoin address is not the
public key. It's actually hash of the public key [1], using RIPEMD-160 and
SHA-256 algorithms, with a network type and a checksum added to it, then
encoded with Base58 to make it shorter and prevent typos (Base58 doesn't have
similar looking characters like O - 0 and I - l).

Also, somewhere in the middle of the video it is said that all inputs have to
be spent entirely in the outputs, but this is not correct as well. You can
send less amount than you have in your inputs and the resulting difference
between the sum of your inputs and outputs is the transaction fee, that is
mentioned later in the video.

These are very minor things though, and overall, this is a very good video,
probably the best I've seen covering the technical aspects of Bitcoin.

[1]
[https://en.bitcoin.it/wiki/Technical_background_of_Bitcoin_a...](https://en.bitcoin.it/wiki/Technical_background_of_Bitcoin_addresses)

~~~
scott_ci
True, I still need add a note in the video about the public key. As far as I
know, this doesn't impact the security of the system, just makes addresses
easier to pass around. Also true about the inputs. It's extremely hard to
explain Bitcoin piece by piece without telling some fibs along the way!

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MarkTanamil
when is this pathetic fad going to die?

~~~
ztnewman
I don't understand what would motivate such a post, or the hoax submission you
posted previously. Care to explain?

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diogocal
He probably lost money speculating, and now he is hate-posting.

~~~
simonebrunozzi
Don't feed the troll.

