Virtual currency? Crypto-currency? Internet Money? Property? What IS Bitcoin? Virtual currency? Crypto-currency? Internet Money? Property?

Bitcoin is a protocol; A set of rules How entities can send and receive bitcoins How new bitcoins are generated A whole lot of math to make sure no one cheats. Anyone can write a bitcoin client, as long as it follows the rules. If it fails to follow the rules, the client is ignored.

What is the block-chain? A public ledger of all Bitcoin transactions A block Contains: A collection of transactions (typically all pending transactions on the network, at the time this block was mined) the coin-base transaction The hash of the previous block to which this one is "chained". the mathematical proof, which makes this block valid

Anatomy of the Block-Chain

What is mining, anyway? Working to verify transactions. Miner rewarded with a "coinbase transaction" (new bitcoins) Miner rewarded with transaction fees. Miner works to solve "proof of work" puzzle to make a block valid.

How are transaction made? A transaction is an operation where the ownership of funds are transferred from one Bitcoin address to another. Sender signs a message with their private key (associated with the address the funds are being sent from) saying that they are transferring ownership of bitcoin to the receivers address, and then broadcasts this message to the Bitcoin network. Shortly afterwards (10min on average), it will be included in a mined block. When 5 more blocks are generated after that which contains our transaction, the transaction is said to be "verified".

Anatomy of a Bitcoin Transaction

Resources blockchain.info bitcoin.org/bitcoin.pdf michaelnielsen.org/ddi/how-the-bitcoin-protocol- actually-works/ en.bitcoin.it/wiki