Bitcoin Exposed: Today's Complete Guide to Tomorrow's Currency

Free Bitcoin Exposed: Today's Complete Guide to Tomorrow's Currency by Daniel Forrester, Mark Solomon

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Appendix A - Major Bitcoin Developments & Timeline
     

1990 - David Chaum founds DigiCash Inc. Transactions were unique based on cryptographic properties, similar to Bitcoin.
     
    1998 - DigiCash, Inc. files bankruptcy, and is sold to Ecash.
     
    2002 - InfoSpace buys Ecash.
     
    2008 - Satoshi Nakomoto makes hundreds of posts to cryptography forum metzdowd.com. He publishes a research paper detailing a Bitcoin concept.
     
    8/15/2008 - Patent #20100042841  filed for a Distributed Encryption Key Invention
     
    8/18/2008 - Bitcoin.org domain reserved out of Helsinki, Finland.
     
    2009 - Bitcoin network forms with the open source client and first bitcoins issued.
     
    2010 - Mt.Gox bitcoin exchange formed.
     
    2011-2012 WikiLeaks, Wordpress, Reddit and small online merchants accept Bitcoin. Bitpay reports over 1000 merchants using their service.
     
    Bitcoins have a major crash from $30 to $2 in late 2011.
     
    Coinbase sells over $1 million BTC in a single month.
     
    2013 - A split occurs in the Bitcoin transaction log or block chain. It is eventually resolved.
     
    FinCEN - The financial crimes are of the U.S. Treasury puts Bitcoin exchanges on notice that they are considered under their rules.
     
    Mt.Gox, the major Bitcoin exchange, shuts down during a crash from $266 to $105.00.
     

Appendix B - List Of Main Bitcoin Services And Websites

Appendix C - Bitcoin Terminology
     

Appendix D - Bitcoins Mathematical Basis
     

Bitcoin Mathematical Details:
     
    This information comes from Akram El-korashy, Computer Science and Engineering Department, German University in Cairo ( http://www.slideshare.net/akram-elkorashy/bitcoins-math )
     
    Bitcoin address 27-34 alphanumerical address that is a potential destination or recipient for Bitcoin payments. A Bitcoin Address is 160-digit hash of public/private portion of the ECDSA key pair.
    Uses a random Elliptical Curve keypair with a public key portion turned into the BTC address.
     

     
    Here is what this looks like from the results of the math problems solved to create the Bitcoin Address:
     
    A Bitcoin Address looks like this:
    1Lez1wcwPLWNmPtcfGXtSy8F34ZF45fwYh
     
     
    Base58 encoding from binary to text /alphanumeric encoding except 0, O, I, l.
     
    RIPEMD-160 is a hashing function that generates a 160 bit digest of an arbitrary block size.
    Essentially this function turns random words letters, numbers, etc..into a block of alphanumerics of an arbitrary number of characters of 256 bit data.
     
    This is a critical part of the Bitcoin code that creates uniformity from the random inputs:
     

     
    Uses Merkle-Damguard Construction for compressing blocks. Creating cyphers.
     
    The basis of the math is the elliptical curve function over a field Fp is a set of points (x,y) satisfying the equation:
    y2 mod p = (x3 + ax + b) mod p
     
    There is a Signature and Verify phase of the signature algorithm.
     
    q is field size
    a, b are field elements
    fr is field size - and is fixed
    G is base point
    n is the order (of multiplication, how many times an element is multiplied by itself point element, group element, point doubling, etc. This is calculated from G!)
    h is a cofactor (order of the curve divided by n)
     
    Here is what this looks like for key generation for the ECRSA form of the function as taken from the Elliptical Curve Solution Primer:
     

     
    This is advanced mathematics for most readers. For a complete explanation of the math behind elliptical curve cryptography, one of the best papers is here:
    http://www.eis.mdx.ac.uk/staffpages/m_cheng/link/ecc_simple.pdf
     
     
    A transaction section of data that is broadcast to the network and collected into blocks.
     
    - It usually references previous transactions and describes sending bitcoins from one address to another. - It is not encrypted.
    - Transactions and blocks are the main data structures.
    - Blocks have a header and a group of transactions.
    -

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