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It doesn't explain either how the money is created in the first place or how actual resolution happens when coming across a block which differs from others' cop

It doesn't explain either how the money is created in the first place or how actual resolution happens when coming across a block which differs from others' copies. Do I need to ping all the peers?

CydeWeys 10y ago
Unfortunately it didn't explain this correctly, and this is the most important part of Bitcoin, as well as its biggest innovation. The longest chain always wins. And since valid block hashes are very hard to find, the longest chain is the one that has the most mining effort behind it. This is why mining is essential to securing the blockchain. In order to make a fake chain of any appreciable length, you would need to have >50% of the total hashing power of the blockchain. And if you have that much power, then whatever you say is the right chain is the right chain, because you can mine more blocks than anyone else and so yours is right by virtue of being longest. The video incorrectly implies that there is some sort of voting mechanism going on wherein the version of the chain with the most copies is correct, but this is incorrect, and would be horribly broken. The P2P network exists only to communicate transactions and blocks; it does not factor in to which version of a chain is considered valid (the longest one always wins). If the P2P network were used for this, then it would be trivial to take over Bitcoin using a Sybil attack, by e.g. hiring a botnet to run millions of fake nodes with your preferred version of the chain. With mining and validity determination by longest length, that doesn't even put a dent in Bitcoin, as even a million general purpose commodity computers can't get anywhere close to matching a small percentage of the overall hashing power of the miners.
- Natanael_L 10y ago
  Actually length doesn't decide, but rather total accumulated hashing power. This is because Bitcoin changes the difficulty per block over time to keep the time between blocks close to 10 minutes. This means that two chains can be equally long but have different amounts of accumulated difficulty. It even means that long blockchains can have low amounts of accumulated difficulty. But for short periods of time, less than ~2 weeks as it is for Bitcoin, the difficulty will not yet have changed and thus length = total difficulty for SHORT forks.
DennisP 10y ago
When a block is found, the miner who found it is rewarded with newly minted bitcoins. As a miner, you create your own block from the transactions you see. Every miner makes its own blocks. This means sometimes two miners will find a block at about the same time, and they'll be different. Other miners will have to choose one or the other as the predecessor for their own blocks, and before long one of the candidate blocks will have another block on top of it. Everybody considers the fork with the most accumulated difficulty to be the valid fork.

It doesn't explain either how the money is created in the first place or how actual resolution happens when coming across a block which differs from others' copies. Do I need to ping all the peers?

CydeWeys 10y ago

Unfortunately it didn't explain this correctly, and this is the most important part of Bitcoin, as well as its biggest innovation. The longest chain always wins. And since valid block hashes are very hard to find, the longest chain is the one that has the most mining effort behind it. This is why mining is essential to securing the blockchain. In order to make a fake chain of any appreciable length, you would need to have >50% of the total hashing power of the blockchain. And if you have that much power, then whatever you say is the right chain is the right chain, because you can mine more blocks than anyone else and so yours is right by virtue of being longest. The video incorrectly implies that there is some sort of voting mechanism going on wherein the version of the chain with the most copies is correct, but this is incorrect, and would be horribly broken. The P2P network exists only to communicate transactions and blocks; it does not factor in to which version of a chain is considered valid (the longest one always wins). If the P2P network were used for this, then it would be trivial to take over Bitcoin using a Sybil attack, by e.g. hiring a botnet to run millions of fake nodes with your preferred version of the chain. With mining and validity determination by longest length, that doesn't even put a dent in Bitcoin, as even a million general purpose commodity computers can't get anywhere close to matching a small percentage of the overall hashing power of the miners.

Natanael_L 10y ago
Actually length doesn't decide, but rather total accumulated hashing power. This is because Bitcoin changes the difficulty per block over time to keep the time between blocks close to 10 minutes. This means that two chains can be equally long but have different amounts of accumulated difficulty. It even means that long blockchains can have low amounts of accumulated difficulty. But for short periods of time, less than ~2 weeks as it is for Bitcoin, the difficulty will not yet have changed and thus length = total difficulty for SHORT forks.

DennisP 10y ago

When a block is found, the miner who found it is rewarded with newly minted bitcoins. As a miner, you create your own block from the transactions you see. Every miner makes its own blocks. This means sometimes two miners will find a block at about the same time, and they'll be different. Other miners will have to choose one or the other as the predecessor for their own blocks, and before long one of the candidate blocks will have another block on top of it. Everybody considers the fork with the most accumulated difficulty to be the valid fork.