The Blockchain & Bitcoin - Computerphile
Blockchain is the underlying technology behind cryptocurrencies bringing together Merkle trees, Hashing & Distributed Architecture. Christopher Ellis explains.
Note1 - At 6:46 when Chris is drawing the Merkle Tree, C would actually be duplicated and hashed with itself not with B. So you would get H(C - C) instead of H(B - C).
Note2 - At minute 17, Christopher mentioned the mining reward halving at 21,000 bitcoins but meant 210,000 blocks.
Public Key Encryption: • Public Key Cryptograph...
The Perfect Code: • The Perfect Code - Com...
/ computerphile
/ computer_phile
This video was filmed and edited by Sean Riley.
Computer Science at the University of Nottingham: bit.ly/nottscomputer
Computerphile is a sister project to Brady Haran's Numberphile. More at www.bradyharan.com
This is the best block chain 101 video I've seen. Most often people explaining it don't sound like they understand what they're endeavoring to describe.
Ah yes. Pretty sure those are investors and speculators mate. Ask them about blockchain and they'll goes: 'Sorry I have a meeting'
I salute a fellow stereotypical nerd
i salute someone who doesn't like pi
Tau is at about 2 times more awesome than pi.
Finally numerical value doesn't pose any restrictions on coolness (for mathematical constants). Remarks: Tau=2Pi=circumference/radius Pi=circumference/diameter radius=1/2diameter.
This dude is a *baller*.
No, he's an engineer
Best, most technically understandable explanation of the blockchain that I have ever heard.
ikr
Coincurrrr
I think 3blue1brown may have just made a better one.
Virtue signalling.
@@175griffin More graphics I agree. This one explains better the hashing, Merkal tree and what miners are actually responsible for. Both videos together are unbeatable. I finally get it. Like when trying to under RSA encryption scheme you just keep researching until you finally get it. The information age I love it.
It's interesting that the people criticising this guy's pronunciation can't post simple comment using correct spelling and grammar. Great video. I learned more in five minutes of this description than in a couple of hours worth of other videos.
This guy is brilliant. Finally someone who explained so clear with good enough knowledge but accessible for anyone who is not in the world of cryptocurrency and blockchain technologies.
He looks so nervous I want to give him a hug. Perfectly explained though
Yeah, talk about that, this triggers a protection mechanism deep down in me somehow, like a duck family crossing a dangerous street. He doesn't have to be nervous though, apart from the somewhat rare way of pronouncing sharp sounds ,). No, really, he seems to be quite able to explain things; definately one of the better... umm... 'explain-guys' on computerphile!
It's really hard to explain something you have understood on a very deep layer on a much more common layer. You have to double-check if your listener can still follow you and jet your simplification does not lead to miss information. That's especially hard in math and IT wheres nothing really in your hands that can be checked against your knowledge.
This is the hardest Computerphile video to watch while eating cereal
L Ramsden literally doing that right now lol
You mean shereal?
thatsh what he shaid!
I am eating cereal and watching this video as well
Maybe I'm just spoiled by listening to people who're comfortable in front of a mic. Helpful information shouldn't be cut off by our aesthetic standards
Out of all the vague explanations about blockchains and cryptocurrencies available out there.. this is the best I have seen and most technically explained, and in a very short time.
Thanks for /finally/ taking the time to make a in-depth video about Bitcoin/Blockchain on Computerphile!
This video actually explained it to me. thank you. many podcasts and blogs have failed, but the whole public private key explanation made it click! thanks
I have seen multiple simplified explanations of bit coins, the block chain and, mining and never understood it. Thank you Computerphile!
Omg, you have no idea how useful this video is and how perfectly timed it is. I am applying for an apprenticeship at IBM and I researched Blockchain as it is one of their big things at the moment. This is exactly what I needed to learn further about it. THANK YOU!
Yeah, they seem to have many open positions in that field atm.
The Hyperledger Intership program?
Nice try, IBM
Daniel Hammond IBM is involved with bitcoin?
Not exactly Bitcoin, but blockchain technology AFAIK.
Guys, why are you so mean? This man tells interesting stuff, he is definitely cool guy, why do you care so much about how he pronounces "s"?
This is the beauty of KZhead. TV will only hire robots as presenters... and they will lie about bitcoin. This man has got the knowledge and he can just put it out there. BTW, I found his delivery to be clear.
because many funny comrade
really pathetic comment
I already understood the components of this, but a clear brain-to-mouth presentation made it make sense (fully-ish). Thanks.
This is by far the best explanation of the system that I have heard yet. The ending of the video was rather sobering however. An hour or more to have a verified transaction is way too long for much of the world's trading, especially when we still have to pay a fee for the transaction.
Holy moly, I have watched many explanations on blockchain and this is the first one that made me go "Aha!". Thank you!
Still mining 12.5btc per block till 2020. Much love to all involved in doing this vids!
I feel this would have been easier to understand if they had gone over version control system before this
I'm not sure how, exactly. True, some version control systems (e.g. Git, Mercurial, Bazaar) use hashes to identify and authenticate their commits, among other things, but I think the same explanation of "hashing is the process of mapping an input to a unique and immutable output code" could've been used there too. They're just two independent concepts that happen to rely on the same underlying and independent technology of crypto-hashes.
ray They are not independent concept. a block chain is just a version control with prof of work. Every time someone write in block chain is like making a commit in git.
git commits include the hash for its parent commits. That's a has chain. The only difference with the bitcoin ledger is that it's hard to make blocks.
Great video! Keep them coming! Just please pay attention: When looking for the merkle root C is duplicated and hashed with itself to get hash(C,C). It won't be hashed together with B!
OMG hadn't seen dot matrix paper in more than 15 years, nearly cried :)
I last seen in 2013
This is a MUCH better explanation of blockchain technology than his video on Smart Contracts.
I totally love that you write on a perforated computer paper.
Great video. Hope to see you in more Computerphile videos!
This guys is very good at explaining the system Good job!
More on this topic please! And please talk about other implementations of the blockchain too. But Bitcoin is inherently interesting ofc.
Best explanation I've seen thus far. Fantastic video. -Cheers
His shirt is killing the antialias when you play it in a small window
The block reward is halved every 210,000 blocks (about 4 years), not every 21,000 bitcoins.
nyx211 check description ;)
heh. whoops.
if you did it by bitcoins it would be nonconvergent
Nice description of proof-of-work.
wow. in depth and great explanation. Thank you!
I'm glad you guys managed to talk about "the blockchain" in 2017 by mentioning only bitcoin and leaving out ponzi schemes fraudulent securities and vaporware projects. However, despite the superficial overview about mining, one cannot talk about bitcoin and immutability without a more in-depth explanation about proof-of-work and how the process of burning energy is key to achieve that immutability and secure the network.
it was a nice talk, from which i learned something. but it could use some more emphasis on practical details of: - how the concepts tie together - maybe just a tiny bit more about how public and private keys are normally used - could also mention that the sender chooses the transaction fee
Just what skynet needs. First, a distributed internet now a distributed currency.
for anyone interesed in learning more about bitcoin the princeton course available in youtube is very well done
I always thought that 'nonce value' meant the number of people in the Tory cabinet. Thanks for clearing that up!
We would be friends irl
i watched the Video a 2nd time, the first time i was really impressed of such a cute pronouncing. But then i want to really know something about the Blockchain. And wow! by far the best technical Explanation of Blockchain here on KZhead. Could be a bit more Graphical, but it is to 95% top! :D Nice work and keep up, i saw you made already an 2nd Video. Nice! i respect you a lot.
Great video, would like to see more detail in the future about the network side of things behind this, like keeping track of transactions which were lost in a forked chain etc.
In a forked chain, both forks probably have all of the same transactions on them long before either side is dropped.
Man this video solved my puzzle to understand blockchain you deserve a heart coin ❤.
brilliant video and well explained.
Excellent explanation of block chain. Thanks a lot!
11:23 - Basically, if you mine a block but it ends up on the shorter chain, then you lose your block reward!
nyx of course ... orphaned blocks are just part of the function, and a known unknown.
will have a watch one more time cause it's high level for me! Thanks!
Each block is 12.5 Bitcoins right now, not 6.
His Divine Shadow I thought bitcoins were worth like $100... are miners really making $1250 per block, or did the value go down or what
time traveler confirmed
kiefac They make $12,000 for every block
It is almost impossible to find a block on your own though.
A bitcoin is almost $1000 right now.
very smart in explaining the process I loved it
so many questions...who decides or sets the policy over how long the miners should take on average to decrypt the key? dont these people hold a lot of power over the bitcoin market? also, what if there arent enough miners around? then the transactions would take ages to validate, unless the keys are made easier to decrypt (which would mean constant adjustment of their difficulties?)?
amazing explanation, thank u very much
12:30 The txs on a fork chain are not "out of luck" or illegitimate(the block is orphaned or illegitimate the txs aren't), they simply go back into the mempool and get added to the next block on the valid chain. The end user isn't effected and he will get confirmations like normal.
Is it necessarily the longest chain that wins? Couldn't I just create a longer chain in isolation on a reduced difficulty and then broadcast that chain to the network?
Great explanation! Thank you. :)
kripkee from big bang is here boys and girls. very well explained
This is a bit focused on crypto coins like Bitcoin used as cash. I recommend discussing blockchain tech for distributed computing, for instance, Ethereum.
Brilliant. I think I finally get (some of) it. Thanks.
After many years I finally understand Bitcoin. Kinda. Thank you so much! :)
thanks for this great explanation.
Very useful and detailed video!
I was hoping for information about the split. Good intro video though!
Great work !
Can someone tell me, in video description that mention about Note1, why the C is hashing to itself, not with B?
really well done!
So how does the value in USD come about?
I like to use blockchain and this video was cool but I am now more confused about how the system works
Can you make a new video explaining SegWit (and maybe the Lightning Network)?
Very interesting video, very informative
Point of clarification in Bitcoin. It isn't the longest chain that defines bitcoin but the "Most worked VALID chain" that defines it. Bitcoin testnet and many alts have longer chains. Economic nodes define what is valid or not through consensus and the most worked is the combination of the cumulative weight on a chain of PoW (Proof of work)
Awesome video! Thanks!
I actually like his voice. Would like him to explain more things
Why is the puzzle where the miner varies the nonce value to eventually meet the hash criteria made to be so difficult? Is it to provide enough delay time for some process to prevent the same transaction getting grouped into two different blocks or something? Or just to slow down the mining process? I don't get it
The idea is to target 1 block roughly every 10 mins - gives enough time to ensure the block is propagated the world over and to give ample time to all miners to have a chance to fairly solve the next one. If blocks are being made faster than every 10 mins (on average), the difficulty is algorithmically increased (and lowered if blocks are being made too slowly).
Great video!
Bitcoin is going through a turbulent time right now as miners can't currently achieve consensus on how Bitcoin should scale to increase .capacity for more transaction volume.
There is always tons of Drama in bitcoin and will continue to be for some time period.... yes
BU
There have been estimations about total power consumption of crypto-currency servers, miners, exchanges and cracking/manipulation attempts. The total electrical energy used far exceeds the net worth of, say, Bitcoin. Thoughts?
This guy is incredibly brilliant! I bet he gets lots of pushy
He pjobably drownsj in pushy
brilliant,thank you!
How about a video on ethereum now?
Thanks for the explanation
Still a little confused about the nonce hash. Is the purpose simply to increase the computing difficulty of the blockchain creation?
Yes, in order to keep the block generation time at ~10 min.
well, that takes courage. Lets hope internet will be nice to you.
Hmm, what is your commend about?
His speech.
AndrejCibikDesign I watched the whole video just because of his voice. It's actually really quite nice to listen to.
i think and hope that these videos are watched by fairly intelligent people ....
not sure if you're giving a backhanded compliment but this video is fine... I care more for the content than to be worried about how he sounds..which is fine anyway
Thanks learnt a lot from this
This is a very brave man.
So @Computerphile Core or Unlimited?
I think his speech impediment makes him better at explaining ideas. He is probably focused less on using big words to appear brilliant and just wants to help you understand what he’s talking about. It’s also a sign that he truly understands what he’s talking about.
I didn't really notice a speech impediment. I *DID* notice he is really, really knowledgeable.
i really like this subject, but i just realized i know very little about it...
So in a sense, the investments of real world currencies into this dedicated network infrastructure creates and supports the value of the digital currency, until those tx fees are supporting it. But won't another online currency be able to promise more growth and tease away capacity from BC? Fees might collapse a currency if they're too high, while not high enough to compete with mining rewards in (BC de novo).
Doesn't this mean that the block-chain will become (close to) "infinitely" large eventually? I mean (eventually) 21 million bitcoins times whatever huge amount of transactions each day equals an enormously large block-chain? Even though it's only text, eventually not even NSA + GOOGLES + whatever, size of server is not going to be big enough to hold all this text?
There are different types of full nodes, pruned full nodes are less than 5GB and can still 100 Validate all txs, Archival full nodes do indeed store the full blockchain ~105GB in size for all txs going back to 2009 , in the future we may end up sharding these archival nodes but as of right now they aren't too big.
there are other blockchains besides bitcoin. One of the solutions to scaling is sharding the network.
Question: Who makes the criteria for the block puzzles? (Or how are they generated?)
They are generated based on parameters of the previous block that was mined.
SAL OK thanks mate.
I think I understood about 1% of this talk, but it was really interesting! I need to watch it again...
Would someone be so nice and add subtitles? I'm really interested in what he has to say, but I stand the way he talks.
at 3:16 this states that a bitcoin transaction is all or nothing. if I have 5 bitcoins and want to spend one I transfer 5 out, 1 to the person I am paying and 4 back to myself at 13:30 it states that transactions aren't really final until the are on the block chain and that takes about an hour. does this mean that if I spend some bitcoin I need to wait an hour before I can spend any more bitcoin, that would be really annoying, I regularly make 3-4 transactions within an hour on my credit card.
Bitcoin txs show up instantly in wallets, and payment processors approve them instantly as well so there is no wait when spending . Waiting 1 hour for 6 block confirmations is just good advice for those wanting to be careful and spending 100k and up
Transactions are visible immediately, but being on a block prevents double spending. What you describe wouldn't be considered double spending though, so you should have no problem doing that.
Just a quick comment on block halving. Current block reward is 12.5 and when it all started for BTC it was 50 BTC. Next year in April or May I think it will be half so 6.25 BTC then 3.125 BTC then 1.5625 BTC then 78.125 Million Satoshi then 39.062 Million Satoshi so on and so forth, that means it will take almost more than 7-10 decades to mine all coins. By then, I reckon it will evolve into something unknown.
So the actual bitcoins are actually just the result of the transactions? Not even an actual binary number? I guess the transactions are signed with the iniatiator's private key. Is that correct?
The bitcoins are merely the unspent outputs left in an address that originated originally from a coinbase mined. The private key allow you to transact or sign those outputs
At that point in the future when miners are only rewarded for transaction fees, can miners decide to not incorporate transactions from the "ether" into their block if the transaction fee is too low or zero? Will that mean that, essentially, zero-fee transactions may have to wait longer until they are eventually confirmed into a block by a miner who does accept free transactions?
"can miners decide to not incorporate transactions from the "ether" into their block if the transaction fee is too low or zero?" This already is occurring. Without a tx fee the tx will likely never get included in a block. Offchain txs dont need fees though. Zero fee txs will only exist for payment channels and offchain.
So distributed is not decentralized? Well explained video!
And while Bitcoin was intended and developed to be distributed, mining pools and asics have effectively made it decentralized.
Regarding this fork thing... If one network is big enough and favors the blocks computed by their own miners, couldn't this be exploited to first create a huge chain before making that one public? To outdo all other networks working on the blocks in question and "monopolize" the whole mining business?
Miners are incentivized to publish their blocks as quickly as possible to ensure they are accepted by the network. The longer they wait to publish their blocks, the higher the risk of all the other miners publishing their mined blocks (and take the reward for each block).
Although they did not use the term blockchain, there existed software that proceeded Bitcoin that uses blockchains. One prominent example is git, and it's not a coincidence that it's also a distributed decentralised system.
Gary van der Merwe Git uses a merkle tree. While very similar, I believe a blockchain is a merkle tree that also includes a consensus protocol.
I like to think of a Bitcoin wallet as owning the private key which corresponds to the transaction history on the distributed Bitcoin blockchain ledger of the coins held within it.
....since you own the transaction history of the coins you 'own', you can therefore alter the transaction state or 'spend' the coins within the wallet that you own the transaction history of.
WTF. I just started reading about this yesterday. I even visited blockchain.info! Right on time guys👍👍
Look up how the banks , Feds, IBM etc have invested in Blockchain . Look up IBM Hyperledger
Johmathan ok i did. what about it?
Askhay stated just started, along with right on time. I believe it started in 2009 or 2010. That's all.
Akshay It's called the Baader-Meinhof phenomenon (when you learn about something and then right after you suddenly start to see it being discussed or used in contexts you wouldn't have before). It happens to me all the time! Always feels eerie too, even tho it's just a cognitive bias But yea. Boring lil piece of trivia for ya there
Great video! Concerning the "s" pronunciation problem, it seems you have a upper jaw front bridge, ask you dentist to create a small curved dip in the back of your bridge and you will be able again to make the sound "sss" again, there must be a small passage for air to make the correct sound. I had the same problem and corrected it like this. You should probably look for a more qualified dentist. I hope I am not making any mistake, only want to help.
This is the first time I heard about the fact that there will eventually be a maximum number of coins issued. That seems like an important piece of information. I also worry about what the mechanisms for actually making transaction fees work, will be. Another thing I wonder about is what the good safety practices are for actually using bitcoins, and currencies like it. Like, if you pay for something, using your cryto-currency of choice, what dangers are there, how might you be taken advantage of, and how do you make yourself harder to be robbed. I also wonder about how the use of a crypto-currency matches up with practicality, if you go to a physical store, but pay with a crypto-currency, will you have some kind of problem? I've never used, or even seen someone use, crypto-currency in a store. I heard somewhere that you have to wait for the transaction to clear, which could take ~10-30 minutes. (I don't have any solid evidence for or against it.)
Even though there is a limited amount of coins issued there bitcoin can be divisible by at least 8 decimal places and beyond so there will always be the ability to pay for items regardless of the price of bitcoin. The txs fees are merely a measure of supply and demand as shown here in a fee marketplace but offchain tx fees are typically free and new technologies will lower txs fee more- bitcoinfees.21.co Bitcoin is like digital cash, where once including in a block it is safe and cannot practically be reversed. Payment processors insure that txs show up instantly with no need to wait and hardware wallets insure that you can store your bitcoins securely without viruses or hackers stealing them.
5:50 when transactions are published in the network, it's existing out there in the ether. No pun intended.
Excellent on the theory and math...If these have a value (Bitcoins) who is funding it and why? Is the computing actually doing something useful that I am not seeing? I am not skeptical, I just don't understand. Anyone point me to a "Bitcoin for Dummies" video?
Supply and demand give bitcoin value. Their principle value is for regulatory arbitrage and speculation with an inelastic demand of users who need it. The puzzles being solved are useful because they secure the network.
I am funding it and users like me by buying coins. I do that because: 1. I believe in the technology and that it will get more and more use cases so the value will grow since the number of coins is limited 2. I am using it to make payments in other countries because it's cheap, fast and secure. There is no other way to pay online with something you can own 100%. You always need to use a 3rd party. Bitcoin is a currency you can own 100%. You can store millions of dollars in your brain by memorizing a 12 or 24 word sequence. The computing power is useful only for the network itself and helps secured it since you need to bring a lot of computing power to take control of the network. The network is millions of times more powerful than the top supercomputers. Other cryptocurrencies have tried to use this computing power to fold proteins of find prime numbers but they didn't get much success.
I know what a hashing algorithm is, I use them all the time to store passwords in databases. I know what public-private key cryptography is, I use it all the time over SSL. But I still do not understand how you put these together to come up with the Bitcoin system. To be honest, I still do not understand how the Bitcoin system works at all.
Marcos Beni You download blockchain, use some serious computing power to find proof of work that satisfies current requirements, you take bunch of transactions, slap these things together and place it on top of last block - viola you have a new block. You need to sign it with your private key, and that's it - transaction fees and block reward are landing on address associated with your private key. Repeat forever
It might be beneficial for you to picture bitcoin as a large accounting ledger where the units (bitcoins) are tied to addresses. You need to own the corresponding private key (of your address) to sign transactions.