Here is a very direct description of the system:
- each transaction (transaction is often abbreviated "tx") has a list of inputs, and a list of outputs
- each input is the output of a previous transaction. You verify your identity as the indented receiver by producing a digital signature for the public key specified on the output
- each output specifies the public key of the receiver and the value being sent
- the sum of output values cannot obvious exceed the sum of input values. If it is any less, the leftover is sent to the miner of the transaction as a transaction fee, which is an incentive for mining.
- once an output is used from an input, it becomes marked as spent, and cannot be reused again. Every input uses the selected output fully. Therefore, if you want to use an input of 1 BTC to pay 0.1 BTC, what you do is to send 0.1 BTC to the receiver, and 0.9 BTC back to yourself as change. This is why the vast majority of transactions has two outputs: one "real", and the other change back to self.Code 1. "Sample Bitcoin transaction graph" illustrates these concepts:
tx0: magic transaction without any inputs, i.e. either Genesis block or a coinbase mining reward. Since it is a magic transaction, it produces 3 Bitcoins from scratch: 1 inout0and 2 inout1. The initial value was actually 50 BTC and reduced with time: Section "Bitcoin halvening"tx1: regular transaction that takes:Since this is a regular transaction, no new coins are produced.- a single input from
tx0 out0, with value 1 - produces two outputs:
out0for value 0.5out1for value 0.3
- this means that there was 0.2 left over from the input. This value will be given to the miner that mines this transaction.
- a single input from
tx2: regular transaction with a single input and a single output. It uses up the entire input, leading to 0 miner fees, so this greedy one might (will?) never get mined.tx3: regular transaction with two inputs and one output. The total input is 2.3, and the output is 1.8, so the miner fee will be 0.5
tx1 tx3
tx0 +---------------+ +---------------+
+----------+ | in0 | | in0 |
| out0 |<------out: tx0 out0 | +------out: tx1 out1 |
| value: 1 | +---------------+ | +---------------+
+----------+ | out0 | | | in1 |
| out1 |<-+ | value: 0.5 | | +----out: tx2 out0 |
| value: 2 | | +---------------+ | | +---------------+
+----------+ | | out1 |<-+ | | out1 |
| | value: 0.3 | | | value: 1.8 |
| +---------------+ | +---------------+
| |
| |
| |
| tx2 |
| +---------------+ |
| | in0 | |
+----out: tx0 out1 | |
+---------------+ |
| out0 |<---+
| value: 2 |
+---------------+Since every input must come from a previous output, there must be some magic way of generating new coins from scratch to bootstrap the system. This mechanism is that when the miner mines successfully, they get a mining fee, which is a magic transaction without any valid inputs and a pre-agreed value, and an incentive to use their power/compute resources to mine. This magic transaction is called a "coinbase transaction".
The key innovation of Bitcoin is how to prevent double spending, i.e. use a single output as the input of two different transactions, via mining.
For example, what prevents me from very quickly using a single output to pay two different people in quick succession?
The solution are the blocks. Blocks discretize transactions into chunks in a way that prevents double spending.
A block contains:
- a list of transactions that are valid amongst themselves. Notably, there can't be double spending within a block.People making transactions send them to the network, and miners select which ones they want to add to their block. Miners prefer to pick transactions that are:
- small, as less bytes means less hashing costs. Small generally means "doesn't have a gazillion inputs/outputs".
- have higher transaction fees, for obvious reasons
- the ID of its parent block. Blocks therefore form a linear linked list of blocks, except for temporary ties that are soon resolved. The longest known list block is considered to be the valid one.
- a nonce, which is an integer chosen "arbitrarily by the miner"
For a block to be valid, besides not containing easy to check stuff like double spending, the miner must also select a nonce such that the hash of the block starts with N zeroes.
For example, considering the transactions from Code 1. "Sample Bitcoin transaction graph", the block structure shown at Code 2. "Sample Bitcoin blockchain" would be valid. In it
block0 contains two transactions: tx0 and tx1, and block1 also contains two transactions: tx2 and tx3. block0 block1 block2
+------------+ +--------------+ +--------------+
| prev: |<----prev: block0 |<----prev: block1 |
+------------+ +--------------+ +--------------+
| txs: | | txs: | | txs: |
| - tx0 | | - tx2 | | - tx4 |
| - tx1 | | - tx3 | | - tx5 |
+------------+ +--------------+ +--------------+
| nonce: 944 | | nonce: 832 | | nonce: 734 |
+------------+ +--------------+ +--------------+
nonces are on this example arbitrary chosen numbers that would lead to a desired hash for the block.block0 is the Genesis block, which is magic and does not have a previous block, because we have to start from somewhere. The network is hardcoded to accept that as a valid starting point.Now suppose that the person who created Clearly, this transaction would try to spend Notably, it is not possible that
tx2 had tried to double spend and also created another transaction tx2' at the same time that looks like this: tx2'
+---------------+
| in0 |
| out: tx0 out1 |
+---------------+
| out0 |
| value: 2 |
+---------------+tx0 out1 one more time in addition to tx2, and should not be allowed! If this were attempted, only the following outcomes are possible:block1containstx2. Then whenblock2gets made, it cannot containtx2', becausetx0 out1was already spent bytx2block1containstx2'.tx2cannot be spent anymore
block1 contains both tx2 and tx2', as that would make the block invalid, and the network would not accept that block even if a miner found a nonce.Since hashes are basically random, miners just have to try a bunch of nonces randomly until they find one that works.
The more zeroes, the harder it is to find the hash. For example, on the extreme case where N is all the bits of the hash output, we are trying to find a hash of exactly 0, which is statistically impossible. But if e.g. N=1, you will in average have to try only two nonces, N=2 four nonces, and so on.
The value N is updated every 2 weeks, and aims to make blocks to take 10 minutes to mine on average. N has to be increased with time, as more advanced hashing hardware has become available.
Once a miner finds a nonce that works, they send their block to the network. Other miners then verify the block, and once they do, they are highly incentivized to stop their hashing attempts, and make the new valid block be the new parent, and start over. This is because the length of the chain has already increased: they would need to mine two blocks instead of one if they didn't update to the newest block!
Therefore if you try to double spend, some random miner is going to select only one of your transactions and add it to the block.
They can't pick both, otherwise their block would be invalid, and other miners wouldn't accept is as the new longest one.
Then sooner or later, the transaction will be mined and added to the longest chain. At this point, the network will move to that newer header, and your second transaction will not be valid for any miner at all anymore, since it uses a spent output from the first one that went in. All miners will therefore drop that transaction, and it will never go in.
The goal of having this mandatory 10 minutes block interval is to make it very unlikely that two miners will mine at the exact same time, and therefore possibly each one mine one of the two double spending transactions. When ties to happen, miners randomly choose one of the valid blocks and work on top of it. The first one that does, now has a block of length L + 2 rather than L + 1, and therefore when that is propagated, everyone drops what they are doing and move to that new longest one.
This is what society gets for not using open knowledge: some of its best minds will be bound to waste endless hours reversing some useless technology.
With that said, even when you do have the source code, reading run logs and using debuggers are a sort of reverse engineering at heart.
One of the most jaw dropping reverse engineering projects Ciro has ever seen is the Super Mario 64 reverse engineering project.
Notable lists:
Ciro Santilli's 10 month stay in Coventry, United Kingdom, in the year 2000 Updated 2025-01-06 +Created 1970-01-01
In the year 2000, Ciro lived with his parents for 10 months in the Coventry because his father took some courses at the University of Warwick. This was Ciro's most important educational experience, more so than any other inCiro Santilli's formal education, because it taught him the Holy Language of English, which infinitely expanded Ciro's Internet horizons, and shaped Ciro's having more than one natural language is bad for the world philosophy. When he came back to Brazil, Ciro skipped dozens of levels in his English school in Santos, São Paulo, Brazil, a Brazilian chain called Cultura Inglesa, and was put to study with much older teenagers who marveled at Ciro's incredibly cute, but since lost, British accent.
Another huge advantage of Coventry is that the Hearsall Community Primary School where Ciro studied was a regular British primary school but with two classes dedicated to foreign students to learn English before integrating with the British students. There were a several kids from Kosovo there due to the Kosovo War which was just ending, and it was there that Ciro made his first Chinese friend, yet unaware of course of the role the country would later play in his life. One particularly fun memory was that of playing soccer on the school playground with a sponge ball to avoid breaking the windows. Then one day it was raining, british weather of course, but Ciro still went for a header, and the soaked sponge ball was soaked and splashed Ciro with dirty water all over. Good days.
Ciro also played a bit of Rugby in those days in a local club.
Some other good memories are of reading the first two Harry Potters, playing and mostly watching other kids play Pokemon on their Game Boys and Pokemon trading cards, and going to a nearby commons playing field and woods, as it typical throughout the UK. Ciro also played some rugby with a local boys team TODO name? but for some reason his team was always crushed when they went to nearby towns to play against other teams. And Ciro also went with his family or with school to some nearby attractions, like Stratford-Upon-Avon (Shakespeare's hometown), and some castles.
When Ali G met the Beckhams by Comic Relief (2001)
Source. Ciro's father really liked Ali G. when they were in the UK in the year 2000, and Ciro would watch along, not fully getting all jokes, but still amused by his irreverence. This interview with David and Victoria Beckham is perhaps one of Ali's best performances.Wicked wicked jungle is massive song from Ali G Indahouse (2002)
Source. OK, the last Ali G video, I promise. Maybe. This video illustrate well the main point of Ali G's humour: his cultural appropriation of American black rap/crime culture, despite it being entirely incongruence with his British background.Ciro's parents put him to play the piano. This is partly influenced by Ciro's paternal grandfather, an energetic Italian descendant who liked music
The piano was fine, but a bit boring due to how it was taught.
The teachers were nice old ladies who followed a very traditional and methodic approach which was just like regular school, instead of doing what actually needed to be done: inspire kids into becoming creative musical geniuses that can compose their own stuff.
While in Santos, before going to university, Ciro somehow got into acoustic and electric guitar.
The electric guitar environment was much less formalized in general, and he took courses with an awesome teacher (archive), who actually tried to inspire his students to create their own music and improvisation.
And so a young teenage Ciro once seriously considered becoming a professional guitar player.
In his early teens, Ciro listened to the usual canned music his friends listened to: music teenager Ciro Santilli liked to listen to, until he started to stumble upon jazz.
Ciro remembers clearly rainy weekend days where he would go to a run down second hand shop near his home in someone's garage (Sebo do Alfaiate, R. Frei Francisco de Sampaio, 183 - Embaré, Santos - SP, 11040-220, Brazil :-)), and buy amazing second hand Jazz CDs. It was just a matter of time until he would start scouring the web for "the best jazz albums of all time" and start listening to all of them, see e.g. the best modern instrumental Western music. digitaldreamdoor.com/index.html was a good resource from those times!
Ciro ultimately decided his bad memory and overwhelming passion for the natural sciences would better suit a scientific carrier.
He also learnt that the computer is also an extremely satisfying artistic instrument.
Also, with a computer, boring dexterity limitations are no more: you can just record perfect played segments or program things note by note to achieve whatever music or action you want!
Although Ciro quit playing musical instruments, his passion for the music has remained, and who knows how it has influenced his life.
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