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The central problem that banks solve is the shared-truth problem, and banks solve it by being the score-keepers. Alice's bank owes her $100; Bob's bank owes him

The central problem that banks solve is the shared-truth problem, and banks solve it by being the score-keepers. Alice's bank owes her $100; Bob's bank owes him $100. If Alice pays Bob $50, Alice's bank owes her $50, and Bob's owes him $150. That's all there is to it. The key is that the banks have to agree on the truth. A check from Alice to Bob is a statement from her saying "I pay Bob $50", he endorses it, saying, "I accept $50 from Alice" and then the two banks at some point say "1-2-3 go!" and make the change simultaneously. Until I understand how Bitcoin does that, I will not believe in it. And don't give me hand-wavy bullshit. Speak plainly. EDIT: Yes, downvote me for wanting to understand, you bitcoin bastards.

throwaway3453 11y ago
You're being downvoted because you didn't put in the effort to explain why you misunderstand Bitcoin transactions. Further, your tone is aggressive and instigative.
iopq 11y ago
Bitcoin is a distributed ledger of all transactions. Alice mines 100 BTC. That "mining" transaction is recorded on the ledger and distributed to all the other miners and they accept it because it has the correct math behind it. Bob wants to buy 100 BTC because he wants to deposit to an online poker site and the regulations don't allow him to deposit using a credit card. He goes to Alice in person and gives Alice USD and Alice transfers Bob 100 BTC. Carol mines the block that contains the transaction. Carol gets some BTC for mining and also verifies that the transaction from Alice to Bob is legitimate because it was signed by Alice. Therefore, since Carol mined a legitimate block it's accepted by all the miners. Now all miners agree that Bob has 100 BTC. The answer for all of this is math. Cryptography proves that these things happened.
DanWaterworth 11y ago
> Until I understand how Bitcoin does that, I will not believe in it. And don't give me hand-wavy bullshit. Speak plainly. You're probably being down-voted because that information is available to you. You just need to look for it.
- perfunctory 11y ago
  > that information is available to you. You just need to look for it. In this case almost all questions on HN should be downvoted.
  - DanWaterworth 11y ago
    There wasn't a question.
  - geofft 11y ago
    Not really, I think. There are questions like "Why is my site not attracting users" or "Is this business / project idea viable", where putting it in front of the HN audience is looking for information. There are questions like "Is Cisco generally nice to acquired companies' free products" or "How profitable is Uber in the long term" that can't be trivially answered with public data, but can lead to productive discussions. There's stuff like "What should I do about this particular diversity problem in my company, from my position," where discussion is the best way to get an answer. All of this is very different from asking a technical question that is (in theory) answered in the very first technical paper on the subject. There's also the question of relevance. "Ask HN: What's your favorite resource for explaining Paxos?" as a top-level post is very different from commenting on some random AWS blog post insinuating that Paxos can't possibly work.
deleted 11y ago
[deleted]
geofft 11y ago
Is there a reason that you find the existing resources on Bitcoin (the Wikipedia article, the paper, the "how it works" page on bitcoin.org, etc.) unclear? What parts of them do you find un-plain or handwavy? What have you read? Do you concur with the purported answer in part and not in part, or do you disagree completely, or do you not understand it...? Help us help you. I don't believe that Bitcoin is a good idea, but I certainly believe that it works for the use case / model of the world it has, and I believed it just about as soon as I heard of it, because I found the resources clear. I imagine so have most others, and so us repeating that to you is probably no different from what you've heard already. If you tell us more about what you understand and what you don't, what you've read and what you haven't, then we can give more useful replies.
- javajosh 11y ago
  For one thing, if you have a single global ledger, how do you avoid the problem that miners can ignore your transactions if they want to? I have other questions, but none of them matter, really, except this one, because this implies that the score-keepers become bitcoin miners rather than banks, which makes bitcoin a non-solution to the banking problem. If you transfer money, at what point does the transfer "happen"? If you have to wait for a miner to calculate something during a 10-minute batch of (global) transactions, doesn't this mean that a) everyone has to wait (at least) 10 minutes for a transfer to take place and b) that all global transactions for every 10 minute window have to reach the same place (e.g. the miner)? Do all miners have to agree on the contents of a block before they start mining? Most discussions of Bitcoin seem to get bogged down in details and jargon. I think the idea is to create a single ledger that monotonically increases in size, with each block of transactions getting integrated with it by solving a (mostly) arbitrary math problem involving the value of those transactions. So I guess my main problem with the system is that it's trivial to alter blocks before integration. The secondary problem is the "waiting for transfer" issue. Or perhaps it's enough for a buyer to hand a seller a signed message saying "I pay you $50" which the seller can a) look at the global ledger to make sure they have the money, and b) integrate into the ledger at their leisure. Which implies there's a double-spending possibility in the window between handing the seller the message and the seller passing the message to the miners for integration.
roberte 11y ago
Well, for Bob's bank to owe $50 more to Bob they need to be compensated so Alice's bank now owes $50 to Bob's bank. In other words, Bob's bank must trust Alice's shitty bank. Unlike the dollar, Bitcoin is not the transfer of debt.
lhl 11y ago
The original Bitcoin white paper very "plainly" describes how it solves this. It is Bitcoin's fundamental invention. http://nakamotoinstitute.org/bitcoin/ http://nakamotoinstitute.org/bitcoin/

throwaway3453 11y ago

You're being downvoted because you didn't put in the effort to explain why you misunderstand Bitcoin transactions. Further, your tone is aggressive and instigative.

iopq 11y ago

Bitcoin is a distributed ledger of all transactions. Alice mines 100 BTC. That "mining" transaction is recorded on the ledger and distributed to all the other miners and they accept it because it has the correct math behind it. Bob wants to buy 100 BTC because he wants to deposit to an online poker site and the regulations don't allow him to deposit using a credit card. He goes to Alice in person and gives Alice USD and Alice transfers Bob 100 BTC. Carol mines the block that contains the transaction. Carol gets some BTC for mining and also verifies that the transaction from Alice to Bob is legitimate because it was signed by Alice. Therefore, since Carol mined a legitimate block it's accepted by all the miners. Now all miners agree that Bob has 100 BTC. The answer for all of this is math. Cryptography proves that these things happened.

DanWaterworth 11y ago

> Until I understand how Bitcoin does that, I will not believe in it. And don't give me hand-wavy bullshit. Speak plainly. You're probably being down-voted because that information is available to you. You just need to look for it.

perfunctory 11y ago
> that information is available to you. You just need to look for it. In this case almost all questions on HN should be downvoted.
- DanWaterworth 11y ago
  There wasn't a question.
- geofft 11y ago
  Not really, I think. There are questions like "Why is my site not attracting users" or "Is this business / project idea viable", where putting it in front of the HN audience is looking for information. There are questions like "Is Cisco generally nice to acquired companies' free products" or "How profitable is Uber in the long term" that can't be trivially answered with public data, but can lead to productive discussions. There's stuff like "What should I do about this particular diversity problem in my company, from my position," where discussion is the best way to get an answer. All of this is very different from asking a technical question that is (in theory) answered in the very first technical paper on the subject. There's also the question of relevance. "Ask HN: What's your favorite resource for explaining Paxos?" as a top-level post is very different from commenting on some random AWS blog post insinuating that Paxos can't possibly work.

deleted 11y ago

[deleted]

geofft 11y ago

Is there a reason that you find the existing resources on Bitcoin (the Wikipedia article, the paper, the "how it works" page on bitcoin.org, etc.) unclear? What parts of them do you find un-plain or handwavy? What have you read? Do you concur with the purported answer in part and not in part, or do you disagree completely, or do you not understand it...? Help us help you. I don't believe that Bitcoin is a good idea, but I certainly believe that it works for the use case / model of the world it has, and I believed it just about as soon as I heard of it, because I found the resources clear. I imagine so have most others, and so us repeating that to you is probably no different from what you've heard already. If you tell us more about what you understand and what you don't, what you've read and what you haven't, then we can give more useful replies.

javajosh 11y ago
For one thing, if you have a single global ledger, how do you avoid the problem that miners can ignore your transactions if they want to? I have other questions, but none of them matter, really, except this one, because this implies that the score-keepers become bitcoin miners rather than banks, which makes bitcoin a non-solution to the banking problem. If you transfer money, at what point does the transfer "happen"? If you have to wait for a miner to calculate something during a 10-minute batch of (global) transactions, doesn't this mean that a) everyone has to wait (at least) 10 minutes for a transfer to take place and b) that all global transactions for every 10 minute window have to reach the same place (e.g. the miner)? Do all miners have to agree on the contents of a block before they start mining? Most discussions of Bitcoin seem to get bogged down in details and jargon. I think the idea is to create a single ledger that monotonically increases in size, with each block of transactions getting integrated with it by solving a (mostly) arbitrary math problem involving the value of those transactions. So I guess my main problem with the system is that it's trivial to alter blocks before integration. The secondary problem is the "waiting for transfer" issue. Or perhaps it's enough for a buyer to hand a seller a signed message saying "I pay you $50" which the seller can a) look at the global ledger to make sure they have the money, and b) integrate into the ledger at their leisure. Which implies there's a double-spending possibility in the window between handing the seller the message and the seller passing the message to the miners for integration.

roberte 11y ago

Well, for Bob's bank to owe $50 more to Bob they need to be compensated so Alice's bank now owes $50 to Bob's bank. In other words, Bob's bank must trust Alice's shitty bank. Unlike the dollar, Bitcoin is not the transfer of debt.

lhl 11y ago

The original Bitcoin white paper very "plainly" describes how it solves this. It is Bitcoin's fundamental invention. http://nakamotoinstitute.org/bitcoin/ http://nakamotoinstitute.org/bitcoin/