book

Mastering Bitcoin

by Andreas M. Antonopoulos

December 2014

Beginner

298 pages

8h 5m

English

O'Reilly Media, Inc.

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Writing the Bitcoin BookIntended AudienceWhy Are There Bugs on the Cover?Conventions Used in This BookCode ExamplesUsing Code ExamplesSafari® Books OnlineHow to Contact UsAcknowledgmentsEarly Release Draft (GitHub Contributions)
What Is Bitcoin?History of BitcoinBitcoin Uses, Users, and Their StoriesGetting StartedQuick StartGetting Your First BitcoinsSending and Receiving Bitcoins
Transactions, Blocks, Mining, and the BlockchainBitcoin OverviewBuying a Cup of CoffeeBitcoin TransactionsCommon Transaction FormsConstructing a TransactionGetting the Right InputsCreating the OutputsAdding the Transaction to the LedgerTransmitting the transactionHow it propagatesBob’s viewBitcoin MiningMining Transactions in BlocksSpending the Transaction
Bitcoin Core: The Reference ImplementationRunning Bitcoin Core for the First TimeCompiling Bitcoin Core from the Source CodeUsing Bitcoin Core’s JSON-RPC API from the Command LineGetting Information on the Bitcoin Core Client StatusWallet Setup and EncryptionWallet Backup, Plain-text Dump, and RestoreWallet Addresses and Receiving TransactionsExploring and Decoding TransactionsExploring BlocksCreating, Signing, and Submitting Transactions Based on Unspent OutputsAlternative Clients, Libraries, and ToolkitsLibbitcoin and Bitcoin ExplorerInstalling Bitcoin ExplorerInstalling LibbitcoinpycoinbtcdInstalling btcdControlling btcd
IntroductionPublic Key Cryptography and CryptocurrencyPrivate and Public KeysPrivate KeysGenerating a private key from a random numberPublic KeysElliptic Curve Cryptography ExplainedGenerating a Public KeyBitcoin AddressesBase58 and Base58Check EncodingKey FormatsPrivate key formatsDecode from Base58CheckEncode from hex to Base58CheckEncode from hex (compressed key) to Base58CheckPublic key formatsCompressed public keysCompressed private keysImplementing Keys and Addresses in PythonWalletsNondeterministic (Random) WalletsDeterministic (Seeded) WalletsMnemonic Code WordsHierarchical Deterministic Wallets (BIP0032/BIP0044)HD wallet creation from a seedPrivate child key derivationUsing derived child keysExtended keysPublic child key derivationHardened child key derivationIndex numbers for normal and hardened derivationHD wallet key identifier (path)Navigating the HD wallet tree structureExperimenting with HD wallets using Bitcoin ExplorerAdvanced Keys and AddressesEncrypted Private Keys (BIP0038)Pay-to-Script Hash (P2SH) and Multi-Sig AddressesMulti-signature addresses and P2SHVanity AddressesGenerating vanity addressesVanity address securityPaper Wallets
IntroductionTransaction LifecycleCreating TransactionsBroadcasting Transactions to the Bitcoin NetworkPropagating Transactions on the Bitcoin NetworkTransaction StructureTransaction Outputs and InputsTransaction OutputsSpending conditions (encumbrances)Transaction InputsTransaction FeesAdding Fees to TransactionsTransaction Chaining and Orphan TransactionsTransaction Scripts and Script LanguageScript Construction (Lock + Unlock)Scripting LanguageTuring IncompletenessStateless VerificationStandard TransactionsPay-to-Public-Key-Hash (P2PKH)Pay-to-Public-KeyMulti-SignatureData Output (OP_RETURN)Pay-to-Script-Hash (P2SH)Pay-to-script-hash addressesBenefits of pay-to-script-hashRedeem script and isStandard validation
Peer-to-Peer Network ArchitectureNodes Types and RolesThe Extended Bitcoin NetworkNetwork DiscoveryFull NodesExchanging “Inventory”Simplified Payment Verification (SPV) NodesBloom FiltersBloom Filters and Inventory UpdatesTransaction PoolsAlert Messages
IntroductionStructure of a BlockBlock HeaderBlock Identifiers: Block Header Hash and Block HeightThe Genesis BlockLinking Blocks in the BlockchainMerkle TreesMerkle Trees and Simplified Payment Verification (SPV)

IntroductionBitcoin Economics and Currency CreationDecentralized ConsensusIndependent Verification of TransactionsMining NodesAggregating Transactions into BlocksTransaction Age, Fees, and PriorityThe Generation TransactionCoinbase Reward and FeesStructure of the Generation TransactionCoinbase DataConstructing the Block HeaderMining the BlockProof-Of-Work AlgorithmDifficulty RepresentationDifficulty Target and RetargetingSuccessfully Mining the BlockValidating a New BlockAssembling and Selecting Chains of BlocksBlockchain ForksMining and the Hashing RaceThe Extra Nonce SolutionMining PoolsManaged poolsP2PoolConsensus Attacks
A Taxonomy of Alternative Currencies and ChainsMeta Coin PlatformsColored CoinsMastercoinCounterpartyAlt CoinsEvaluating an Alt CoinMonetary Parameter Alternatives: Litecoin, Dogecoin, FreicoinLitecoinDogecoinFreicoinConsensus Innovation: Peercoin, Myriad, Blackcoin, Vericoin, NXTPeercoinMyriadBlackcoinVeriCoinNXTDual-Purpose Mining Innovation: Primecoin, Curecoin, GridcoinPrimecoinCurecoinGridcoinAnonymity-Focused Alt Coins: CryptoNote, Bytecoin, Monero, Zerocash/Zerocoin, DarkcoinZerocoin/ZerocashCryptoNoteBytecoinMoneroDarkcoinNoncurrency Alt ChainsNamecoinEthereumFuture of Currencies
Security PrinciplesDeveloping Bitcoin Systems SecurelyThe Root of TrustUser Security Best PracticesPhysical Bitcoin StorageHardware WalletsBalancing RiskDiversifying RiskMulti-sig and GovernanceSurvivabilityConclusion
Key Utility (KU)Transaction Utility (TX)
Examples of bx command use

Content preview from Mastering Bitcoin

Chapter 3. The Bitcoin Client

Bitcoin Core: The Reference Implementation

You can download the reference client Bitcoin Core, also known as the “Satoshi client,” from bitcoin.org. The reference client implements all aspects of the bitcoin system, including wallets, a transaction verification engine with a full copy of the entire transaction ledger (blockchain), and a full network node in the peer-to-peer bitcoin network.

On Bitcoin’s Choose Your Wallet page, select Bitcoin Core to download the reference client. Depending on your operating system, you will download an executable installer. For Windows, this is either a ZIP archive or an .exe executable. For Mac OS it is a .dmg disk image. Linux versions include a PPA package for Ubuntu or a tar.gz archive. The bitcoin.org page that lists recommended bitcoin clients is shown in Figure 3-1.

Figure 3-1. Choosing a bitcoin client at bitcoin.org

Running Bitcoin Core for the First Time

If you download an installable package, such as an .exe, .dmg, or PPA, you can install it the same way as any application on your operating system. For Windows, run the .exe and follow the step-by-step instructions. For Mac OS, launch the .dmg and drag the Bitcoin-QT icon into your Applications folder. For Ubuntu, double-click the PPA in your File Explorer and it will open the package manager to install the package. Once you have completed installation you should ...