The "Keys" in Bitcoin that Everything Depends on + Insightful Comments get YOU 100SP~

in #bitcoin4 years ago

Hi all,

This is part 3 of my series on the basics of blockchain/bitcoin. Start with part 1: https://steemit.com/bitcoin/@ddangerwu/learn-by-interacting-with-hash-blocks-and-blockchain-get-100sp-delegated-for-insightful-comments

bitcoin-3025639_1920.jpg

This post will focus on public vs private keys and its function in bitcoin transactions. Again, I highly recommend that you play around with the parameters discussed in the post by going to https://Anders.com/blockchain/public-private-keys/keys.html Disclaimer: This website was made by Anders Brownworth and you should check him out at https://anders.com.

So last post ended with our understanding that ledgers on the blockchain because there are many transactions of A sending X amount to B. But what is stopping people from just adding/changing a transaction and spending all of someone else money? Or, we can spend our money to multiple people, creating the problem known as "double-spend".

Screen Shot 2018-03-01 at 5.48.16 PM.png

Let me introduce to you the idea of private and public key pair. Let's assume that you can make up some string of numbers and derive another string of data similar to how you could make up some data and derive some hash as we learned in Part 1. You can think of the public key as the representation of your private key, open for everyone to see. As you can see from the above picture, the public key for the private key "1" is "0479..."

What is very important to understand here is that you can verify the keys match but cannot go backwards and derive a private key with your public key. Imagine that you have a math problem of 2+x=4. You figure out by doing the computation that the answer x=2. You can very easily verify that the answer and the problem match but if only given x=2, you have a infinitesimally small chance of guessing the problem is "2+x=4". This concept is called asymmetrical encryption and it is at the heart of making bitcoin work. My analogy dumbs down the concept a lot and you should read about it further here: https://en.wikipedia.org/wiki/P_versus_NP_problem

Screen Shot 2018-03-01 at 6.07.05 PM.png

For now, let's make up a random private key "1030..." and derive its public key "041b..."

Screen Shot 2018-03-01 at 6.10.21 PM.png

Now, with our private key, we derive again or sign the data "Hello again Steemit! Remember to follow, upvote and resteem if you found this post helpful!" This gives us the signature "3045..."

Screen Shot 2018-03-01 at 6.14.12 PM.png

If we input the same info again, we can check or verify that the data, signature and private key match. This is similar to that given x=2, we can verify the problem 2+x=4 matches with the answer.

Screen Shot 2018-03-01 at 6.16.19 PM.png

Notice that if I change any given components, in the above picture I changed the private key to 1234, then the transaction does not verify.

Screen Shot 2018-03-01 at 6.18.50 PM.png

For a real transaction, we have the data be a structured message with peoples' names replaced by public keys. Similarly, we can verify the transaction given the public keys and the signature of the sender, which was derived from the private key of the sender.

Screen Shot 2018-03-01 at 6.35.03 PM.png

Lastly, let’s put everything together into the blockchain distributed ledger (see part 2 if you don’t understand). I’ve changed the first transaction that I have in block #2 from 10 to 1000, giving myself more money. This causes the block to be invalid because that transaction is invalid.

Screen Shot 2018-03-01 at 6.37.44 PM.png

Notice that even if I re-mined block #2 to make the hash “follow the rule”, the transaction is still invalid because the signature don’t match. This is how can throw the transaction back into the mem-pool and still have a valid block.

Important understanding: These concepts shows that one of the biggest reasons that bitcoin has value is that you can get a new address or public key by just making up a new private key. This allows you to send money peer to peer, cutting out any centralized permission. For details, see my video: https://steemit.com/bitcoin/@ddangerwu/the-reason-that-bitcoin-has-value-is-because-get-100sp-delegated-to-you-by-commenting

-Dan Wu

—————

Now that you’ve read the post, what did you think? I want to do my part to fight spam and promote insightful comments/discussions. I read every comment and value your feedback. Write something and I will pick the most insightful comment to delegate 100 Steem Power to you for a week.

You may earn curation awards using my STEEM manually OR use a service like SmartSteem to vote automatically for you.

Here is last post's winner:
Screen Shot 2018-03-01 at 6.48.25 PM.png
my response:
Screen Shot 2018-03-01 at 6.48.58 PM.png

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I want a B sticker for my keyboard!!

Really great article!!

Probably the most important part to many is fully understanding this process.

This series has been very insightful :-)

hey there

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This concept is what drew me to cryptos, and what I perceive as their value. Yet few people even think about it or understand it. When I'm asked what bitcoin is, I typically answer it's a way of paying people without having to give them your account number and liken it to Visa... where they try to increase security by adding a secret pin number to the back which you then have to give to everyone that you make a purchase from. Bitcoin has created a secret pin that never has to be shared yet can be verified. It's an extremely difficult thing to accomplish and that in of itself is immensely valuable.

Is it theoretically possible for a seed generator to generate the same seed twice? Or do they only create so far not existing wallets?

Very informative post. You explaining that from our public key we can't recover our private key because of unlimited number of probalities. All public and private key coded with crytographic code.But the Quantum computing which is very very fast and calculate unlimited number of probalities within a second . So by use of quantum computing one can got your private key. That's why latest technology used photon/ light for sending message in internate communication which is far better than crytographic encryption and unhackable if anyone want to hack it will detectable and the message is lost.
Thanks for sharing your valuable information about blockchain.

I was just about to say the same thing, and I saw you’re comment. I was not aware that quantum computers could compromise private keys though. If that’s a fact, there has to be some kind of way to write a script to defend against that.

There has to be a way. Say you have a Nano Ledger Wallet for example, wouldnt those private keys be just as vulnerable? Either way you’re post was informative. Thanks.

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The maths analogy is a bit complicated, but I think that the idea of mining is probably still a little absurd in my mind even though I've been mining since December. The information about hash power is a discussion that is rather exclusive and underground which makes it complicated to understand. The idea behind computing power having real value in industry is fresh and perhaps it needs to be introduced to the syllabus in schools. Shoutout for the gangster post @ddangerwu. This one has dangerous cashflow vested..

This is one of the best posts I have seen on here, especially the following paragraph really stands out:

'I'm looking to build a world where compassion and courage prevail over deception and fear, where technology brings transparency in our relationships finally giving honest cooperation the upper hand over any other types of human interaction.'

I have been looking for people who want to change social media, the internet and the planet for the better for so long and it seems I've finally found them!

If anyone reading this has not voted this guy as a witness, I'd suggest you vote right now!

Wonderful and beautiful article

If it wasn't for life, we wouldn't have the Blockchain.

I am thankful for life.

I am thankful for the Blockchain 👍✨

This is a scam! Its a phishing scam! Hope you get this post removed!

Create money curently
A small piece of information The transaction blocks contain a list of end-to-end transactions. The first computer that creates this block receives a bitcoin reward for participating in the smooth running of the system. The length of the blocks grows more and more, so there are fewer and fewer bitcoins created. This goes up to 21 million as we specified above. The generation of bitcoins follows an algorithm defined in advance: thus the first four years, 50 bitcoins are generated every 10 minutes, then the value is divided by two for another four years, since November 2013, 25 bitcoins are created every 10 minutes , and this division takes place every 210,000 blocks, which roughly corresponds to four years. The figure of 21 million bitcoin should be reached in 2040 Why not?

its really working. if its working then its one of the best deal. Thanks

Hi Dan Wu. Even though I did not understand the words that you are using, maybe you are using a different or unreliable translation, I understand the thought of the whole article. This is very informative, considering the fees that are being used in every single transaction. I was very interested when I saw the title of your post, therefore I went and read the article and all the previous article. This specific article makes me more interested. This makes everyone informed of the concept known as double spending, and providing knowledge about public and private key pair. Continue to provide knowledge about the whole platform and inspire others. You are doing great.

Great in-depth explanation of key pairs. Probably a bit more than the average Bitcoin user is interested in, but I personally think it's important to have a basic understanding of how Bitcoin works on a technical level.

Also want to add that you can also sign messages to give proof of ownership of a private key over a certain address. It's a function in many wallets.

you know.....bitcoin is best.....it is a golden coin.... it is so nice post...

thanks for sharing! i will start following your exciting posts! Checkout my posts as well

Wow... honestly I’m just coming across you blog but I must say, what I saw kinda look like magic to me. All the pages you used for illustration and the calculations are just exceptional. I Love that I learn and value is being added to me everyday on steemit. I’m a user of smartmarket/smartsteem and I sell upvotes sometimes. Smartmarket I recommend to anyone who’s willing to sell upvote and earn good rewards on it . I look forward to more of your post. FYI Value has been added to one soul which is me. Merci

upvote and follow @rikineng
i am a newcomer in steemit

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very informative like my other fellow steemian have said. i really wanna know more about bitcoin and how i can also invest wisely

Thank you friends your information is very useful for me and for others hopefully others also useful.

This is a significant fascinating and educative post. I should tail you in other to increment on my little information of the complexities of Bitcoin. Great post

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Well this is amazing I really feel good to see this

Is it theoretically possible for a seed generator to generate the same seed twice? Or do they only create so far not existing wallets?

It's Awesome, Even seeing this process every day, I did not know the difference between them. thanks for your post regards

Nice your post

Nice post brother

I am very much delighted after reading your post. Very well detailed and described. Kudos to you. Your post is inspiration for the new comers like me and many others on steemit platform. Once again thanks for your efforts and hardwork.

Congratulations @ddangerwu, this post is the most rewarded post (based on pending payouts) in the last 12 hours written by a Superuser account holder (accounts that hold between 1 and 10 Mega Vests). The total number of posts by Superuser account holders during this period was 1706 and the total pending payments to posts in this category was $13943.85. To see the full list of highest paid posts across all accounts categories, click here.

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Upvoted plz do the same for me

Congratulations, your post received one of the top 10 most powerful upvotes in the last 12 hours. You received an upvote from @upme valued at 140.06 SBD, based on the pending payout at the time the data was extracted.

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A wonderful and beautiful article continued, worthy of follow-up and support what you publish very beautiful

it is hard for me to understand what you said .

Yeah blockchain technology is a mind-fook.

thanks for post

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Thank You! ⚜

This is awesome! A great way of explaining something complicated to those of us less tech savvy, thank you! Ill be following!

HELLO, THANK YOU FOR THIS POST.

Woww.... Nice :)
I'm reading ur post again and again so that I can absorb the information...
Thanks again.. I'll update u soon after I get in the core of it.. it's because people like u, people like me never feel abandoned ;)

thank you for share

any of you guys are a good way of storing/verifying private keys without having to save them down or write them by hand. That would be truly awesome

consider getting a ledger nano s - Safest way to store your coins (ledger on taobao) - https://tinyurl.com/ycfth9ar

(ledger on official site) - https://tinyurl.com/y7onrx7v

Thanks I already have a trezor so have been using that amongst MEW and some other exchanges. Still do take the precaution to store my seed in at least 2 different places as a hard copy just in case

wonderful post❤️

Hey man great post!

Most of all since it shows your vast knowledge on this so I got encouraged to ask you this question I have:

How does the lightning nodes routing payment technology works? meaning, I heard a lot that the payment channels are like a smart contract between 2 bitcoin private keys, so if that's the case what's underneath the technology of the nodes that enables payment to go through them to find the wallet that is receiving the payment?

It's a 2 part question since what I'm trying to find out is if big companies will be able to develop a bandwidth shaping technology as they have done so in the case of ISP with the internet to limit the bandwidth of the lightning network nodes and hence hijack bitcoin and manipulate it as ISP are doing with the internet ?

Ok cool, I'm going to check that.
Edit: I just watch it and you don't explain my question, beg your pardon if you find my to demanding, but just to let you know that video doesn't explain how the technology itself of routing payment through LN works.

Thanks for your efforts in explaining this to the newbies anyways man, I'm on a different level of knowing this, again excuse me if I sound arrogant, it is what it is but I know you know more than this, the one that can explain in simple terms see a big picture.

So, I'm going to take a look at this document, is from 2016 but probably has the answer I'm looking for, if you have time you can read it too and probably make a post about it summarizing your thoughts on it:

http://bitfury.com/content/5-white-papers-research/whitepaper_flare_an_approach_to_routing_in_lightning_network_7_7_2016.pdf

Now i understand the keys a bit.

This article was very insightful to me as a newbie / minnow. I don't have anything insightful to offer, but it was a very valuable read. Resteemed, followed and upvoted.

This is quite an interesting and educative post. I will have to follow you in other to increase on my small knowledge of the intricacies of Bitcoin and Co. Thanks a lot.

really interesting article! 😇

interesting subject

Amazing Post

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Extremely useful post @ddangerwu. You clarifying that from our open key we can't recuperate our private key as a result of boundless number of probalities. All open and private key coded with crytographic code.But the Quantum registering which is quick and figure boundless number of probalities inside a moment . So by utilization of quantum registering one can got your private key. That is the reason most recent innovation utilized photon/light to send message in internate correspondence which is much better than crytographic encryption and unhackable on the off chance that anybody need to hack it will perceivable and the message is lost.

A debt of gratitude is in order for sharing your profitable data about blockchain

enjoying reading this work that is beautiful and very professioanl, im glad for that sucess , could you tell me the secret of all thoese upvots thats really impressive , im having a hard start i need some encouragment and i belive in this beautiful community

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'insightful comment'

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upvote on these post..congrats man..keep it up!

It is awesome B sticker is excellent for keyboard buttons

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You got a 95.24% upvote from @inciter courtesy of @ddangerwu!

Excellent post. Upvoted.

I have been tinkering with crypto currencies, by mining with minergate,, And bought a asic, With very little knowledge how they work. So these articles have been quite useful to begin to fully understand how things work, Keep up the posts

nice, that’s how I start too.

very good post my friend!!!

... by DEFINITION ... that's T H E step-by-step-guidance for "not yet"- IT cracks ... !!!

AMAZING!ly displayed ... -_-

So what your saying is a single private key could have plenty of public hashes but those public hashes cant be reduced back to their originals based on themselves therefore as long as you maintain full control of that original private key keep it secure use your 12 word phrase to restore the key anywhere and it would be literally impossible for anybody other than yourself to gain access to that private key. As long as you created it originally. Thats why bitcoin is beautiful. Im not a mathematician by any standard, but i trust in math more than i could any religion. Thanks for breaking this down for me again its been a long time since i first looked into what makes your kes secure and insecure. Much love.

Thanks for the explanation of the keys, very insightful.

Interest, but can you explain it like I am a cat? 😸 Meow Brrrrrrrr....

Oh my oh! You are good at descriptions.. You have concluded all the information one should know. Thanks man