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Author Topic: Bitcoin transport - please explain your understand of the transport mechanism  (Read 102 times)
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Jet Cash
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July 01, 2018, 12:29:26 PM
 #1

Here is another chance to earn some merits for telling us your understanding of bitcoin topics. To give newer members a chance, the first 10 replies are restricted to newbies and juniors, after that the thread is open to all ranks. The topic can be quite complex, so I'll award merits for good basic description, more detailed explanations of selected transport elements, and more for a good technical overview. Elements include the mempool and UTXOs for example. No plagiarism or copy posting is allowed of course.

Please explain your understanding of the process that takes a bitcoin transaction from an entry in a spender's wallet, to an entry in a receiver's wallet

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July 01, 2018, 02:47:17 PM
Merited by DarkStar_ (2), Jet Cash (1), iasenko (1)
 #2

Although I haven't sent or received any bitcoin in my life (even a fraction) I am going to have a go at this.  Cheesy

  • In Spender's wallet there are no bitcoins, but a list of transactions made by him, where the balance of bitcoin can be calculated using that. The Bitcoin algorithm always makes sure that a person does not send more than he actually owns
  • Once the sender wants to send some bitcoins to another he must sign the transaction (With the details of the sender and the value ) with his private key. Only this private address can authorize bitcoin transactions. (Sender does not need to worry about these signing, He just needs to input the Private key along with transaction details and digital signature will be automatically generated.)
  • Then this information (The digitally signed transaction details) must be validated. This validation does not need sender's private key, Using only the above-mentioned signature and the sender's public key (Literally it is public, It can not authorize any transactions. Although it is somehow connected to the private key it is impossible to reverse engineer the private key using that. ) the transaction can be validated. (This process makes sure that the actual sender has sent this Bitcoins.)
  • The validated transaction is broadcasted after being checked whether the sender has that amount of bitcoin.
  • Then our mining friends will mine the block with the transaction and after few confirmations, it can be made sure the transaction is successfully done

Quick Question!  Huh

What if someone copy pasted a transaction over and over again? Let's say sender A has sent B some bitcoins and B copies that transaction details which have been already signed by A. (Since the original transaction was validated with the private key of A, then the copy-pasted forged transaction must be validated too!) Or Is it??

No! Each and every transaction is combined with a unique number If someone copy pasted a previous transaction to a certain block the unique number also is included! Since there can not be two transactions with same identification number the transaction does not get validated, and also the imposter cannot change the unique identifier number of the transaction as it will change the whole signature supposed for that transaction and will not be validated at all. (A single letter difference leads to totally different signatures)


References:
https://www.coindesk.com/information/how-do-bitcoin-transactions-work/
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July 01, 2018, 02:59:11 PM
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Well that wasn't quite what I was after, but I gave you a merit for it anyway. Smiley

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July 01, 2018, 03:31:44 PM
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Well that wasn't quite what I was after, but I gave you a merit for it anyway. Smiley

Ooops I did not see this part earlier!
 
.......
Elements include the mempool and UTXOs for example. No plagiarism or copy posting is allowed of course.
.......
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July 01, 2018, 10:05:21 PM
Last edit: July 01, 2018, 10:26:43 PM by r1s2g3
 #5


Please explain your understanding of the process that takes a bitcoin transaction from an entry in a spender's wallet, to an entry in a receiver's wallet

Since this question is about bitcoin transaction so I will like to start first with bitcoin.
First I will clear the misconception that something like Bitcoin really exist in system. What really exist in system(blockchain) is Unspent Transaction Output (UTXO). So these bitcoin or UTXO exist in blockchain.
So when we do transfer /transaction then the UTXO will transfer from sender wallet to the receiver wallet. The transfer of these UTXO will be governed by the set of rules like the sum of all inputs must be equal to or greater than the sum of all outputs. If the inputs exceed the outputs, the difference is considered a transaction fee, and is redeemable by whoever first includes the transaction into the block chain.
(A special kind of transaction, called a coinbase transaction, has no inputs. It is created by miners, and there is one coinbase transaction per block .)

All set of rules can  be read at:
https://en.bitcoin.it/wiki/Protocol_rules#.22tx.22_messages

Once the transaction is valid ( A fullnode is able to  validate the validity of the transactions). This transaction will include in the mempool (memory pool).
In the Memory pool , it will wait for getting picked up by a miner. The miner who is first to find the solution (Coinbase transaction) will include the transaction on the block. (High transaction fees will be incentive for miner to include the transactions). Once this transaction included in the block then it will become part of the the blockchain and the UTXO are now successfully transferred from sender to receiver. (or transfer of bitcoins).   

References:
https://en.bitcoin.it/wiki/Protocol_documentation#Transaction_Verification
https://github.com/bitcoinbook/bitcoinbook

Edited.


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July 04, 2018, 05:44:59 PM
 #6

Hi Good Day,
this is enjoyable unlike reading stuffs from other threads in other  section with 1500+ replies, i can't even understand where is the topic going, so i'm gonna try this one.

Here is the link to where i read from :
https://www.thebalance.com/how-does-a-bitcoin-transaction-work-391213

Basically, what i understand is there are three important basis to complete a transaction. 
These are the following :
Transaction input address,
Transaction output address,
Amount.

I will use bitcoin as the crypto use to transact.

The input bitcoin address is untraceable but it can be traceable if you want to dig deep into bitcoins blockchain and search all through the transactions given by the network.  Why did i say it is traceable because the bitcoin you have received is sent to you by someone and that someone also receives the bitcoin he sends to you by another someone until you address the name of the very first sender.

The transaction output address is the receiver's address now if the transaction is done then the information of the output address will be registered into the bitcoin network and will serve as the transaction history to who is the receiver ; this is transparent means that this is traceable.

I haven't discussed about miners which are the operators of the transaction block since it is replied by other members on this thread. 

I really learn an idea about this topic but is very basic.
I will appreciate if there are some clarifications about my explanation i know there is a possible mistake. 

Thanks

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