Introduction
This documentation serves as a comprehensive guide for developers looking to understand Bitcoin and build Bitcoin-based applications. While it provides essential information, it is not a formal specification.
👉 Get started with Bitcoin Core
Block Chain
The block chain acts as Bitcoin’s public ledger, ensuring transaction integrity and preventing double-spending.
Key Concepts:
- Blocks: Contain validated transactions.
- Consensus Rules: Validation criteria enforced by nodes.
- Merkle Tree: Hashes transactions for efficiency.
Proof of Work (PoW)
- Miners solve cryptographic puzzles to add blocks.
- Difficulty adjusts every 2,016 blocks (~2 weeks) to maintain a consistent block time.
Block Height and Forking
- Conflicting blocks create temporary forks.
- The longest valid chain becomes canonical.
Transaction Data
- Coinbase Transaction: First transaction in a block, rewarding the miner.
- UTXOs (Unspent Transaction Outputs): Spendable transaction outputs.
Transactions
Structure
- Inputs: Reference previous UTXOs.
- Outputs: Specify recipient addresses and amounts.
P2PKH (Pay-to-Public-Key-Hash)
- Most common transaction type.
- Uses cryptographic signatures for authorization.
P2SH (Pay-to-Script-Hash)
- Supports complex scripts (e.g., multisig).
- Redeem scripts unlock funds.
Standard Transactions
- Follow Bitcoin Core’s validation rules.
- Types: P2PKH, P2SH, Multisig, Null Data.
Transaction Malleability
- Modifying transaction IDs without invalidating them.
- Solution: Segregated Witness (SegWit).
Contracts
Escrow and Arbitration
- Uses multisig (2-of-3) for dispute resolution.
- Example: Buyer, seller, and arbitrator.
👉 Learn more about Bitcoin contracts
FAQ
How does Bitcoin prevent double-spending?
- Transactions are recorded in the immutable block chain.
What is a Merkle root?
- A hash summarizing all transactions in a block.
Why are transaction fees necessary?
- Fees incentivize miners to include transactions in blocks.
Conclusion
Bitcoin’s decentralized architecture ensures security and transparency. Developers can leverage its programmability for innovative applications.
Note: This guide is for educational purposes. Always verify code and practices against the latest Bitcoin standards.
Keywords: Bitcoin, block chain, transactions, P2PKH, P2SH, contracts, escrow, proof of work, UTXO, SegWit.