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How does Bitcoin work?

Ilya GrigorikIf you clearly understand how Bitcoin works then don’t bother reading this post. However, if you are like how I was before I read the article Minimum Viable Block Chain, and you are not clear about what Bitcoin is and how it works then please read on.

Bitcoin is a neat technical solution to the problem of how to ensure the integrity of a financial transaction without going through a central trusted authority.

It is a very intriguing and interesting technical solution!

The solution has three component:

  1. How to ensure the integrity of individual transaction using public-private key infrastructure (PKI)?
  2. How to verify multi-party transfers and guard against double spending through distributed consensus in peer-to-peer (P2P) network?
  3. How to protect the whole system from malicious attack through a block chain?

I don’t think I can explain this better than Ilya Grigorik – so read this post - Minimum Viable Block Chain.

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More Stories By Udayan Banerjee

Udayan Banerjee is CTO at NIIT Technologies Ltd, an IT industry veteran with more than 30 years' experience. He blogs at http://setandbma.wordpress.com.
The blog focuses on emerging technologies like cloud computing, mobile computing, social media aka web 2.0 etc. It also contains stuff about agile methodology and trends in architecture. It is a world view seen through the lens of a software service provider based out of Bangalore and serving clients across the world. The focus is mostly on...

  • Keep the hype out and project a realistic picture
  • Uncover trends not very apparent
  • Draw conclusion from real life experience
  • Point out fallacy & discrepancy when I see them
  • Talk about trends which I find interesting
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