SoChain Blog: Bitcoin, Dogecoin, and the Blockchain
The prevalent idea of modern day cryptographic currencies originated when Bitcoin launched te 2009. With Bitcoin, for the very first time te history, the world had access to a downright decentralized medium of exchange. This medium of exchange reliably transfers value from one entity to another te a hostile, trust-less environment by solving a problem that previously necessitated centralized entities, such spil financial banks, to scheidsrechter value exchanges.
The main role of the centralized entity wasgoed to assure the recipient that the money has bot taken from the sender, and given to the recipient, and the sender could no longer spend the same money (i.e., dual spend it). The problem of dual spending can be modeled under an abstract Byzantine Generals’ Problem that concentrates on achieving majority overeenstemming ter a decentralized network.
The Byzantine Generals’ Problem is a topic that is worth its own blog postbode. For now, let’s just reminisce that the problem of dual spending wasgoed thought unlikely to solve te a decentralized manner before Bitcoin solved it. This solution wasgoed implemented te what is now called the Blockchain.
What is the Blockchain?
Ter plain terms, the Blockchain is a book of accounts that is divided into batches of transactions, or blocks, which are naturally a collection of transactions. Bitcoin uses a number of technologies that came before it, including decentralized opstopping sharing (see: BitTorrent), Public Key Cryptography, and Proof of Work Hashing (see: Hashcash). Bitcoin introduced a fresh technology: the Blockchain. Most subsequent cryptographic currencies, such spil Dogecoin, use the same technology with minor switches (e.g., a different Proof of Work hashing algorithm).
The Blockchain facilitates reliable transfer of units of account (straks on referred to spil values) inbetween certain cryptographically valid entities. Te Bitcoin, the total units of account that will everzwijn exist is Two.1 Quadrillion Satoshis, or 21 Million Bitcoin. Ter Dogecoin, this is 100 Billion Dogecoin until March 2015, and Five Billion extra Dogecoin annually after that. Dogecoin and Bitcoin consist of two separate networks of peer-to-peer knots. Each Bitcoin or Dogecoin knot attempts to keep its local copy of the book of accounts up-to-date.
Ter order to make use of the power of the Blockchain and its prompt, decentralized, low-fee transactions, one voorwaarde understand what constitutes a transaction:
A transaction is simply a cryptographically verifiable instruction from the sender to transfer value the sender wields to one or more valid recipients. The sender(s), and receiver(s), have cryptographically verifiable identities, known spil addresses (see: Public Key Cryptography).
Te the Blockchain, here’s what a (simplified) transaction looks like:
The very basic parts to understand ter the above snippet are: a transaction has inputs, and outputs. The inputs are specifications of which values to transfer from the sender’s address(es), and the outputs are specifications of how much of the total input value each recipient’s address(es) receives. Inputs ter this transaction were outputs ter a previous transaction, with the exception of when the network generates fresh coins.
Fresh coins are generated by the Dogecoin network spil prizes for miners for solving a block (example), i.e., miners work hard to find the juist hash for a batch of transactions, also known spil a block (see: Hashcash, Proof of Work). If the total input values are higher than the total output values, the difference is paid to miners of the block spil a transaction toverfee. Total input value is never less than the total output value ter a single transaction.
When a miner finds a fresh block, they confirm all the transactions contained within it spil valid. However, a block does not exist on its own — it is linked to blocks previously solved ter a chain of blocks all the way to the Genesis Block. The Genesis Block wasgoed created when Bitcoin or Dogecoin networks were created (see: Dogecoin Genesis Block). Therefore, where a block is solved, and appended to a chain of previously found blocks, it confirms the transactions within it, spil well spil the transactions te all the previous blocks ter its chain. Hence the name: Blockchain.
So, what is the Blockchain? Ter very concise terms, it is a chain of blocks!
A Transaction’s Journey to Being Confirmed
Figure 1 (below) shows a simplified version of the steps a transaction goes through from the time it is created, to the time it is included ter the Blockchain, i.e., confirmed.
Interacting with the Blockchain
Now that you have better understanding of what the Blockchain is, go ahead and dive into it. Use the SoChain API for querying for transactions, addresses, blocks, and if you create transactions, you can shove them into the Dogecoin network using the same API. If you’re ter the mood to muck around and debug your own project, use the Dogecoin Test Network (DOGETEST) instead of the Dogecoin Main Network (DOGE). If you need any kleuter of help with this, including getting Dogecoin for experimenting with the Test Network, voeling us directly.
Wij will voorkant technical details of creating transactions te a zometeen blog postbode.
Disclaimer: This is not a technical specification of the Blockchain. It is intended for newcomers, and simplified spil such.