A Beginner’s Guide to Bitcoin (Part 1): Introduction

I recently had a series of conversations with different friends of mine who said they'd tried to understand Bitcoin from what was on the internet and failed.  Almost all of them said they couldn't understand mining or why it was needed. The truth is that there isn't anything particularly complicated about Bitcoin.  Even the cryptography …

A Beginner’s Guide to Bitcoin (Part 14): Conclusion

Previous Article   -   Table of Contents I'm hoping that if you've read all of these articles you'll have a much better idea of how Bitcoin works technically.  This was my original aim for the series.  I also hope that you can understand why people are excited about it and the underlying technology solution, and why …

A Beginner’s Guide to Bitcoin (Part 13): Beyond Bitcoin

Previous Article   -   Next Article   -   Table of Contents Blockchains and Distributed Ledgers Introduction This final section of this lengthy series of articles isn't about Bitcoin at all.  It's about the hype that's come to surround it: the 'blockchain' and 'distributed ledger technology' as it's been called, abbreviated to 'DLT'. If you've read this series …

A Beginner’s Guide to Bitcoin (Part 12): Bitcoin Problems – Electricity, Centralization

Previous Article   -   Next Article   -   Table of Contents Electricity Paying People To Run The Network At the start of this series of articles I mentioned that Bitcoin uses as much electricity as a small nation.  How is that possible? We've seen that Bitcoin gets people (the miners) to add computing power to the network …

A Beginner’s Guide to Bitcoin (Part 11): Bitcoin Problems – Speed

Previous Article   -   Next Article   -   Table of Contents Introduction The next couple of articles will look in some more detail at some of the flaws in Bitcoin mentioned previously.  In this article we'll look at speed. Speed As previously discussed, Bitcoin is deliberately slowed down by mining to ensure that it works properly. Throughput …

A Beginner’s Guide to Bitcoin (Part 10): Technical Description – Summary

Previous Article   -   Next Article   -   Table of Contents It's taken a while, but we have now covered all the basics of how Bitcoin works.  There's a lot here.  If you're still confused then below there is a slightly extended version of the previous technical recap that gives a summary of what we've covered. Bitcoin …

A Beginner’s Guide to Bitcoin (Part 9): Anonymity

Previous Article   -   Next Article   -   Table of Contents Bitcoin Doesn't Know Who You Are As I've already discussed one of the features of Bitcoin is anonymity. When you make a payment through a regular bank the bank is usually required by their regulators to know who you are.  There are 'know your customer' rules …

A Beginner’s Guide to Bitcoin (Part 8): Mining

Previous Article   -   Next Article   -   Table of Contents Recap At the start of this article I said that none of the ideas in Bitcoin were that difficult.  However, there are a lot of things going on here already, and we haven't even described mining.  So I've written a brief recap of the what we've …

A Beginner’s Guide to Bitcoin (Part 7): Being Consistent

Previous Article   -   Next Article   -   Table of Contents The Problem The next big problem with our distributed ledger is more subtle, and much harder to solve.  Indeed as we shall see it's a problem that leads to the crazy genius at the heart of Bitcoin. However, it's in no way a new problem.  I …

A Beginner’s Guide to Bitcoin (Part 6): Paying for Bitcoin’s Computers

Previous Article   -   Next Article   -   Table of Contents Printing Money: the Block Reward Another problem for Bitcoin is that someone has to pay for all the computers running this ledger.  With conventional money the government pays to create coins and banknotes from general taxation, and banks pay for systems that deal with checking accounts …