Mastering Bitcoin Unlocking Digital Cryptocurrencies 1st Edition by Andreas Antonopoulos 1449374042 9781449374044

1. Introduction

What Is Bitcoin?

History of Bitcoin

Bitcoin Uses, Users, and Their Stories

Getting Started

Quick Start

Getting Your First Bitcoins

Sending and Receiving Bitcoins

2. How Bitcoin Works

Transactions, Blocks, Mining, and the Blockchain

Bitcoin Overview

Buying a Cup of Coffee

Bitcoin Transactions

Common Transaction Forms

Constructing a Transaction

Getting the Right Inputs

Creating the Outputs

Adding the Transaction to the Ledger

Transmitting the transaction

How it propagates

Bob’s view

Bitcoin Mining

Mining Transactions in Blocks

Spending the Transaction

3. The Bitcoin Client

Bitcoin Core: The Reference Implementation

Running Bitcoin Core for the First Time

Compiling Bitcoin Core from the Source Code

Using Bitcoin Core’s JSON-RPC API from the Command Line

Getting Information on the Bitcoin Core Client Status

Wallet Setup and Encryption

Wallet Backup, Plain-text Dump, and Restore

Wallet Addresses and Receiving Transactions

Exploring and Decoding Transactions

Exploring Blocks

Creating, Signing, and Submitting Transactions Based on Unspent Outputs

Alternative Clients, Libraries, and Toolkits

Libbitcoin and Bitcoin Explorer

Installing Bitcoin Explorer

Installing Libbitcoin

pycoin

btcd

Installing btcd

Controlling btcd

4. Keys, Addresses, Wallets

Introduction

Public Key Cryptography and Cryptocurrency

Private and Public Keys

Private Keys

Generating a private key from a random number

Public Keys

Elliptic Curve Cryptography Explained

Generating a Public Key

Bitcoin Addresses

Base58 and Base58Check Encoding

Key Formats

Private key formats

Decode from Base58Check

Encode from hex to Base58Check

Encode from hex (compressed key) to Base58Check

Public key formats

Compressed public keys

Compressed private keys

Implementing Keys and Addresses in Python

Wallets

Nondeterministic (Random) Wallets

Deterministic (Seeded) Wallets

Mnemonic Code Words

Hierarchical Deterministic Wallets (BIP0032/BIP0044)

HD wallet creation from a seed

Private child key derivation

Using derived child keys

Extended keys

Public child key derivation

Hardened child key derivation

Index numbers for normal and hardened derivation

HD wallet key identifier (path)

Navigating the HD wallet tree structure

Experimenting with HD wallets using Bitcoin Explorer

Advanced Keys and Addresses

Encrypted Private Keys (BIP0038)

Pay-to-Script Hash (P2SH) and Multi-Sig Addresses

Multi-signature addresses and P2SH

Vanity Addresses

Generating vanity addresses

Vanity address security

Paper Wallets

5. Transactions

Introduction

Transaction Lifecycle

Creating Transactions

Broadcasting Transactions to the Bitcoin Network

Propagating Transactions on the Bitcoin Network

Transaction Structure

Transaction Outputs and Inputs

Transaction Outputs

Spending conditions (encumbrances)

Transaction Inputs

Transaction Fees

Adding Fees to Transactions

Transaction Chaining and Orphan Transactions

Transaction Scripts and Script Language

Script Construction (Lock + Unlock)

Scripting Language

Turing Incompleteness

Stateless Verification

Standard Transactions

Pay-to-Public-Key-Hash (P2PKH)

Pay-to-Public-Key

Multi-Signature

Data Output (OP_RETURN)

Pay-to-Script-Hash (P2SH)

Pay-to-script-hash addresses

Benefits of pay-to-script-hash

Redeem script and isStandard validation

6. The Bitcoin Network

Peer-to-Peer Network Architecture

Nodes Types and Roles

The Extended Bitcoin Network

Network Discovery

Full Nodes

Exchanging “Inventory”

Simplified Payment Verification (SPV) Nodes

Bloom Filters

Bloom Filters and Inventory Updates

Transaction Pools

Alert Messages

7. The Blockchain

Introduction

Structure of a Block

Block Header

Block Identifiers: Block Header Hash and Block Height

The Genesis Block

Linking Blocks in the Blockchain

Merkle Trees

Merkle Trees and Simplified Payment Verification (SPV)

8. Mining and Consensus

Introduction

Bitcoin Economics and Currency Creation

Decentralized Consensus

Independent Verification of Transactions

Mining Nodes

Aggregating Transactions into Blocks

Transaction Age, Fees, and Priority

The Generation Transaction

Coinbase Reward and Fees

Structure of the Generation Transaction

Coinbase Data

Constructing the Block Header

Mining the Block

Proof-Of-Work Algorithm

Difficulty Representation

Difficulty Target and Retargeting

Successfully Mining the Block

Validating a New Block

Assembling and Selecting Chains of Blocks

Blockchain Forks

Mining and the Hashing Race

The Extra Nonce Solution

Mining Pools

Managed pools

P2Pool

Consensus Attacks

9. Alternative Chains, Currencies, and Applications

A Taxonomy of Alternative Currencies and Chains

Meta Coin Platforms

Colored Coins

Mastercoin

Counterparty

Alt Coins

Evaluating an Alt Coin