Bitcoin explained from the viewpoint of inventing your own cryptocurrency.
These in-depth videos are made possible by patreon: https://patreon.com/3blue1brown
Protocol Labs: https://protocol.ai/
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Special thanks to the following patrons: http://3b1b.co/btc-thanks
Some people have asked if this channel accepts contributions in cryptocurrency form as an alternative to Patreon. As you might guess, the answer is yes :). Here are the relevant addresses:
Supplement video: https://youtu.be/S9JGmA5_unY
Music by Vincent Rubinetti: https://soundcloud.com/vincerubinetti/heartbeat
Here are a few other resources I'd recommend:
Original Bitcoin paper: https://bitcoin.org/bitcoin.pdf
Block explorer: https://blockexplorer.com/
Blog post by Michael Nielsen: https://goo.gl/BW1RV3
(This is particularly good for understanding the details of what transactions look like, which is something this video did not cover)
Video by CuriousInventor: https://youtu.be/Lx9zgZCMqXE
Video by Anders Brownworth: https://youtu.be/_160oMzblY8
Ethereum white paper: https://goo.gl/XXZddT
3blue1brown is a channel about animating math, in all senses of the word animate. And you know the drill with YouTube, if you want to stay posted on new videos, subscribe, and click the bell to receive notifications (if you're into that).
If you are new to this channel and want to see more, a good place to start is this playlist: http://3b1b.co/recommended
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There is something deep and powerful about block chains that will affect civilization for a long time to come. I would put the level importance of this discovery the same as Einstein's relativity. However, I think this will be a slow impact (on the scale of decades).
If a block contains invalid transaction data, anyone who has an up to date copy of the blockchain can see that it's false. Only new peers, or peers who been offline for a while, are vulnerable to misinformation. Proof of work follows the simple realization that the truth is always older than a lie. Once you have the truth, the lies become obvious.
I thumbed-up this video but, it really deserves 2^256 thumbs.
A very good explanation. One issue that crypto holders will have is actually spending their crypto and until this is made easier it won't get mainstream adoption. One solution that requires no fees or being converted back to fiat is this upcoming platform called Zeex who have come up with an excellent solution for converting fiat to physical products. https://www.zeex.me/
Well spoken, voice isn't annoying - very succinct, clear simple animation . Also how you move to the $$$ pitch, you do it smoothly and with class. This should be the benchmark all You Tubers should aim for. Hats off to you, Sir.
So that means you cannot pay with bitcoin without spending fee to include your transaction in the next block? So if you want to buy a 2 dollar object with BTC, you need to add 3.50 as a bribe basically to get it included?
One question I still have, which might be a dumb question: what's the point of the block rewards? Is it just to give people an incentive to do the computational work of mining? (If the ledger is just a record of debts being transferred among users, why is there any need to increase the total size of the bitcoin supply in circulation?)
Finally a satisfying explanation! Every other explanation I've heard has just raised more questions than it answered for me. I think the desire to simplify and draw analogies just obscures what's really going on; these mathematical details are necessary to understand it.
One question, regarding miners getting paid. (18:35) Do the miners put in a transaction into the block and then encrypt that? Wouldn't that change the whole message? and wouldn't it change the requirement to meet? Like if a miner has to find a number to get 60 zeroes at the start, wouldn't it be changed if the miner adds a transaction to their name?
I have two things I still don't quite understand. First of all, why does the transaction rate for bitcoin fluctuate so unpredictably, and what actually affects it? Second, if Alice doesn't want to write the additional statement giving money to the miner, would she ever be able to send money, and how does she know how much she must give to have her payment 'accepted'? And finally, how can Alice plainly say that she pays an extra fee for 'the miner' without saying who the miner is? Surely if he wanted to write his own ID into the transaction, Alice's signature would no longer work?
Very nice explanation. One question when you said that Alice is trying to fool Bob with a fraudulent block, how can she broadcast the block if the initial transaction has not been signed by Bob, at 20:00
The block chain consists of lines of problem solving code in servers connected together into one monolithic mega computer that is growing each day. They use ice caves to keep the servers cool and operations costs down, meaning they need less power and likely can run independently. Where this used for the purpose of creating a super AI, why keep quiet and be vague about what you're doing? Shady in my opinion.
So, what if i made a transaction and that transaction hadn't been included into new block that miners signed with the new number - where does it go? Is there some queue, or i should redo my transaction? What if miners are simultaneously working on finding a number for different versions of blockchain, where is the guarantee that my transaction will be in the main blockchain and will not be ignored as a part of faulty chain? How do miner agree upon on what stack of transactions they are working on? What happens if there are transactions made during the computation of a new number? Do they add it to block and start over? Or do they start the "finding" process only when the whole block(2400 records) is ready?
So what happens if Alice doesn't want to validate it? And no one yet has told us where the basis for this invisible crypto is? You just jump into the middle as if it is real. And when people later say it isn't real and it crashes....then what? The day will come.
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1) If it takes 10m to verify a transaction, how is the network so fast?
2) If (after all the bitcoins are mined), it’s gonna cost a transaction fee to send bitcoin, then what is the point of levering it as a currency? (Even overlooking the fact that it’s so volatile) Is’nt one of the main arguments for BTC lower transaction fees? And banks already have none (except overseas ofc)
QUESTION: What if a peer goes offline and does not receive a block? Won't they be out of the loop, unable to match their previous hash with the headers of new incoming blocks? How do they "catchup" without miners having to send the entire blockchain every time they add a new block?
You can assume I know most of the technical protocols of how cryptocurrencies work, I'm just confused by this aspect. Thanks!!!
Definitely some of the best math videos on the web, and especially on these kind of topics. I absolutely love this, as any reasonably invested math enthusiasts probably will. Excellent animation, explanation, and pacing! <3 <3
I'll be honest while I didn't understand quite everything but I understood more than from other videos. Really appreciated the straightforwardness of the presentation. It gave me the basics and I can go on from there.
Excelentísimo video, la verdad es que me parece un trabajo completamente bien hecho. La simple idea de que haya yo haya comprendido de qué se tratan todos estos procesos denota lo bien que está este video.
with the amount of time it takes to mine a new block for bitcoin being rather high, would it be "more profitable" to mine another crypto currency like etherium, which has a much lower value but also a much shorter average block time?
coins can go suck it cuz its ridiculous that I still would have to pay more than MSRP for a gpu that is 2 years old! I despise the thought that these 0's and 1's are 'valued' at such a high dollar amount and that there exists 'crypto currency experts' as if it requires some sort of godlike power to not realize people are just laundering money and pumping up the price of turds by enticing new buyers of huge rewards.
1) In the proof of work, is it guaranteed that it is possible to find a certain number that when hashed with any transaction list will give x zeros at the start of the hash?
2) I believe that the bitcoin protocol increases the number of zeroes required to consider a block of transactions valid. What happens if the number of zeroes reaches very close to 256 bits or equals that?
3) Is it possible for a block creator to reward himself more money that he should? Since all the other listeners will verify that the block's hash starts with x required zeroes?
Please keep making videos like these. They are amazing!
Nobel Prize-winning Economist, Milton Friedman, 1999: "I think that the internet is going to be one of the major forces for reducing the role of the gov't. The one thing that's missing, but that will soon be developed, is a reliable 'E-Cash'. A method whereby, on the internet, you can transfer funds from A to B, without A knowing B or B knowing A". What a brilliant mind. This is the 20-30 y/o's chance (but really anyone's chance) to do what their parents and grandparents and great great great grandparents couldn't accomplish. OF THE PEOPLE, BY THE PEOPLE, FOR THE PEOPLE. We can change the monetary system in our lifetime. Gold, Silver, BTC, and LTC forever. I'm of the generation who graduated HS when the 07-09' recession hit. Going to college with 6 dollar fuel was not possible. Such a small window. Needed to work right out of school than go and still cannot afford schooling. I don't believe in student loans, want to stay sovereign. God gives the toughest battles to his strongest soldiers. God Bless.
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It seems like trust is not rendered unnecessary, but simply re-assigned. I take it the complete cumulative ledger is only held in the databases of miners. My computer couldn't keep storing away all that data. So what if some catastrophic, or simply unforeseen, event results in the withdrawal of all the miners, and their databases disappear?
Can you make a cast ( or know someone who would love to explain) on this cryptography terms and algorithm used in bitcoin or ethereum, I mean to explain Elliptic Curve Digital Signature Algorithm (ECDSA) and the curve (secp256k1) used inside them? Thanks
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Do not know what to think... A quantum computer can very easily win this computational work and beat the ciptography also. I am afraid of they can guess any hash within seconds, while a classic computer needs years to achive the same. It is unfair.
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