Having now used the original Bitcoin client and Electrum, it seems clear that the 'thin client' application such as electrum is probably a lot of people's tool of choice for a lightweight wallet, but to be honest, I like using the original wallet as it gives a better feel for how the Bitcoin system/network is working as a whole, i.e. taking time (in some cases a long time) to download the full block chain from the genesis block.  After a recent 'receive' into my wallet, had a mild panic when the transaction was not showing up (could be seen on 'blockchain.info', until I realised it would not be 'registered' by my wallet until the most recent blocks -which included my transaction and subsequent confirmations- had been downloaded).  But really, this was a good reminder of exactly how the block chain and system as a whole works.

Do thin clients (such as electrum) not encourage users to 'not be a node' in the chain by simply connecting to a BC server, without keeping a copy of the block chain ?  in this case surely some nodes will (or currently are) acting as servers for many users, thus creating a 'trust' issue between 'clients' connecting and the node itself (i.e. is the server a genuine honest version of the chain?), especially if there are significant 'clients'.  Is it not the case that the more nodes the better ?  and along a similar theme, should there not be more sites like blockchain.info to avoid too much trust going into a single blockchain infromation site ?  I'm guessing I'm going to receive a shed load of alternative site options now for blockchain.info    !!  Would love to code up my own data delving application for the block chain if I had time to do it !   

A less 'technical question type post' from me this time  ,  my thoughts in evolving of Bitcoin:

The way I see Bitcoin at the moment, we are working with the ingenious 'raw' system, transactions in the block, scarry (to the uninitiated) looking addresses and relatively unintuitive wallets ..  to those who have taken the time to fairly deeply understand the system, it makes sense, for those that haven't (the majority) its a still a very alien system I think.

I think as Bitcoin becomes more popular, layers of trusted services are going to emerge (and some dare I say it, bank like services) that make using the system open to the masses.. the 'down with banks, up with Bitcoin speak' is all very well, but a bit naive I think (talking about high street type bank services, not central government banks) Banks use currency as their basis for business whereas Bitcoin IS the currency itself with a transaction system built in ..

examples of functions of banks/other financial orgs to people:

safe way of storing money, insured against theft  (The private keys are open to theft by hacking)

instant payment guarantees (e.g. visa); when you pay for something online, the receiver is effectively guaranteed payment, the 'payment guarantee' function understands the risk that a few minimal transactions
will turn bad and accepts the risk, usually by mitigating against it.

credit providers (overdraft, loans, mortgages)

online payment processors ...

international payment processors


Bitcoin has the potential to revolutionise the last two . 

But there will still be neccesity for credit giving and instant payment guarantee (it stakes an hour to really turn that transaction into stone, which is still quite quick, but lacks the instantness of current online payment systems).  Credit giving businesses would 'lend' Bitcoin, in the same way as lending traditional money.  And some kind of 'clearing system service' would be needed to guarantee payments for online retailers who want to instantly hand over goods or services after receiving BTC with just a single confirmation !

Also, whilst Bitcoin provides the great anonymity of payments, most law abiding businesses, who will choose to use Bitcoin, will need transparency between transactions between suppliers and its customers, for record keeping and dispute resolution, so they'll need to use some kind of register of BTC addresses, transaction codes against registered companies etc.  Probably 'trusted' services will emerge to fulfill this need, as well as businesses using their own internal records.  Whilst this goes against the idea that Bitcoin is anonymous, in many situations, you'll WANT to make payments transparent.

Despite these 'value added services' emerging, the great thing about Bitcoin is that you will ALWAYS be able to send and receive using the underlying wallet system itself. At the moment we are in 'raw' stage, exciting times ahead ..

interested in others' thoughts on the above.

fascinating stuff !  disappearing transactions would definitely be a little mysterious for a receiver/sender who does not have a deeper level of understanding of the transaction process !!, but like you say this is the reason to only consider the transaction 'solid' after those handful of confirmations, chances of your transaction disappearing drastically reduce as the blocks pile higher on yours !

thanks again,

bassride.

Danny, thanks for the great answer on the award of the coins  !!  all clearer after that ; and I can see how being well connected in the P2P network would be beneficial.

can't help but wonder now !    if Miner_a in your example has effectively received the new coins as a special transaction in their newly solved block (in a fork that will surely become orphaned) could they not attempt to spend those coins immediately before they effectively become invalidated !!  OR

I guess that they COULD but then that transaction would effectively be invalidated once that block becomes orphaned (as the same coins are rewarded to the new miner who becomes the TRUE owner)  If the recipient waits for a handful of confirmations before handing goods/services/currecny etc over .. he'll see the confirmation count drop to zero.  If he doesn't he'll lose out .  does that make sense?


re: my question on blocks every 10 minutes.  I understand that the protocol is designed to release coins gradually over time and thought that the 10 minutes had something to do with controlling the rate of coin issue - periodically the difficulty level is changed to keep this approximate rate  (although I did read also that it has to do with allowing time for transactions to propagate through the network)  -- if indeed new coins could be issued to 2 different parties (which I now realise, after your answer, is not possible) coins would possibly be issued at a much faster rate than was planned !!

not time based definitely, due to the global nature of the network (which OFFICIAL clock to use would be the problem, as its completely deregulated) and timestamps can easily be 'faked', whereas the 'proof of work' on the cryptograhic puzzle cannot, one of the geniuses of the system !

so in a soft fork, its possible that 2(or nodes) could successfully crack the same block number at roughly the same time.  (e.g number 1022), but that the fork, in practice, is resolved quickly so that only one will end up in the main chain (the longest), BUT do they BOTH get issued with Bitcoins ?    ummm!

and if they do this would be in advance of blocks being cracked every 10 minutes ?

maybe in practice this is indeed rare, and in general blocks get cracked in sequence !!

Hi all,

can anyone answer me this.  So I understand roughly how new bitcoins are mined, a node (or mining pool) takes in transactions into a block, then attempts to crack the block head to be automatically rewarded (in the form of a special transaction) their -currently- 25 BTC .. 

WHAT IF  : 2 competing branches emerge in the chain, 

2 nodes pretty much crack block 1021 (example) at the same time.  Are coins ONLY awarded when they are are stacked on top of the main block chain ?  and is it not possible that node 'C' will be 'aware' that block 1020 is the highest block (and therefore working on block 1021) in the stack whereas node 'M' will know about block 1024 being the highest (and therefore working at cracking block 1025 ??)  . 

thanks,

bassride.

Thanks 'DannyHamilton'

up until now I'd assumed that the difficulty in cracking the block was related to the length of all the transaction data lumped together.  so of course it makes sense to include larger numbers with transaction fees.

My journey into learning this breakthrough technology continues 

bassride ..

Hi all,

from everything I've learnt about Bitcoin so far, the word 'genius' spring to mind  !! 

One thing I'm trying to work out about mining blocks.  As I understand it, new Bitcoins (currently 25) are issued to a miner who sucessfully 'cracks' a block and adds it to the Block Chain.  Is it possible for miners to mine blocks with say for example, only one transaction in it ?   Is it not therefore more worthwhile for a miner to verify a block containing only one transaction every time?   I would have thought that finding the correct hash with 1 TX would take much less time than one with 1000.  I know that they also receive the total of transaction fees contained within the block, but I would have thought that regularly cracking small blocks and receiving the fresh coins would be more profitable !

thanks,

D