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Title: Question about transaction in the Bitcoin white paper. Post by: bincedecrabe on April 02, 2016, 04:10:23 PM Hi there,
I'm reading the white paper and there's something I don't understand at the very beginning (2 - transations, page 2) I understand that the old owner has to sign the transaction with his private key. But why a hash made with the public key of the new owner is needed ? What is the purpose of this ? Title: Re: Question about transaction in the Bitcoin white paper. Post by: DannyHamilton on April 02, 2016, 04:58:46 PM Hi there, I'm reading the white paper and there's something I don't understand at the very beginning (2 - transations, page 2) I understand that the old owner has to sign the transaction with his private key. But why a hash made with the public key of the new owner is needed ? What is the purpose of this ? Page two is just a generaic example of how transfer of ownership could be indicated. It isn't exactly how Bitcoin actually does it. Regardless, if you want to understand what's happening on page two, the public key is included so that the sender can lock ownership to the provider of that public key. By signing the hash of the public key, the sender indicates to the system that the ONLY the person allowed to transfer control of the indicated value is the person that can provide a signature from the private key that is associated with that public key. When that recipient wants to transfer control of the value to someone else, he does the same... He creates a signature to provide proof that he is authorized to transfer the control, and he signs the public key of the new recipient (so that the new recipient becomes the ONLY person that can transfer control, bu providing a valid signature). Effectively, the sender encumbers the value with a requirement that must be met to be allowed to use the value in a new transaction. The recipient is the only person that can meet the requirements of that encumbrance, and then encumbers the value with a new requirement for the next recipient. Title: Re: Question about transaction in the Bitcoin white paper. Post by: CIYAM on April 02, 2016, 05:00:53 PM But why a hash made with the public key of the new owner is needed ? What is the purpose of this ? That is the Bitcoin "address" of the new owner - and the reason it is a hash of their public key is for added security (so that their public key is not exposed until the coins are transferred by a newer tx). This might be relevant if say quantum computers are able to work out private keys from public keys (but not instantly so). Title: Re: Question about transaction in the Bitcoin white paper. Post by: bincedecrabe on April 03, 2016, 02:25:25 PM Guys,
Thanks a lot for your responses. @DannyHamilton. I understand that the paper just gives a rough idea. In the paper, the public key is not included and that was the purpose of my question :) Title: Re: Question about transaction in the Bitcoin white paper. Post by: Gahs on April 05, 2016, 11:42:42 AM But why a hash made with the public key of the new owner is needed ? What is the purpose of this ? That is the Bitcoin "address" of the new owner - and the reason it is a hash of their public key is for added security (so that their public key is not exposed until the coins are transferred by a newer tx). This might be relevant if say quantum computers are able to work out private keys from public keys (but not instantly so). Hello, what is a public key and how does it differ from a private key? |