But how does bitcoin actually work?
The math behind cryptocurrencies.
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Some people have asked if this channel accepts contributions in cryptocurrency form. As a matter of fact, it does:
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2^256 video:
Music by Vincent Rubinetti:
Here are a few other resources I'd recommend:
Original Bitcoin paper:
Block explorer:
Blog post by Michael Nielsen:
(This is particularly good for understanding the details of what transactions look like, which is something this video did not cover)
Video by CuriousInventor:
Video by Anders Brownworth:
Ethereum white paper:
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Animations largely made using manim, a scrappy open source python library.
If you want to check it out, I feel compelled to warn you that it's not the most well-documented tool, and has many other quirks you might expect in a library someone wrote with only their own use in mind.
Music by Vincent Rubinetti.
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Stream the music on Spotify:
If you want to contribute translated subtitles or to help review those that have already been made by others and need approval, you can click the gear icon in the video and go to subtitles/cc, then "add subtitles/cc". I really appreciate those who do this, as it helps make the lessons accessible to more people.
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If you see comments here about investing or brokers, they are scams. Videos about cryptocurrencies, evidently including ones that are just about the underlying technology/math, are hotbeds for attracting nefarious actors preying on the impressionable.
Also, hi! If you’re new to this channel, most of it is about visualizing math. I get it, you probably landed here searching for how BTC works, not to spend your afternoon getting pulled into learning about, say, prime numbers or problem-solving, but if you have a moment take a look at the rest of the channel, you may enjoy what you find.
Have you considered using that YouTube autospam purge script that has been a lot of other YouTubers seem to really recommend?
Or failing that, consider just nuking the comment section (disable comments) with an explanation why in the video description.
Yeah, you lose lots of valuable historical discussion, but at this point that may be the lesser evil.
Great video! I have a question, I have two fraud inquiries on my reports that I would like to get removed. I’ve seen your video regarding this, but Im still a bit confused. So I know my first step would be making a call with the credit bureau (Experian) but should I also make call what time? And would I be never stop sending a good compny MarKensTech911?com to my friends and people I know regarding any credit situations…
I still don’t understand how or who created the first 50 Bitcoin’s that was rewarded. I get how currency is the transaction history and but I don’t understand the part how the initial bitcoin was created so it can be rewarded and miners can start validating transactions. Because if there are not bitcoins there can’t be any transactions to validate. If someone can explain that would be amazing!
If you have not heard, ThioJoe worked on a spam deleter app for YouTube. This would be helpful for cleaning up the comment sections of your YouTube videos.
Great video! My acknowledgement to you for your knowledge on business lesson that helped me understand the market trial with real reason why people get poorer, And How to Avoid this situation
I will advise all newbie to get started with her to be victorious in the resent trail that has brought a great impact in my life.
I will choose Mrs Shirley Morals always
You guys are right but I don’t know why most people stay poor only because they got discouraged by friend’s and relatives, who stopped them against their will, while the wise ones kept on venturing into digital currency and growing higher financially.
An regulated broker in the US. Met her sometime earlier this year at a startup funding event. She had some interesting things to say about the state of algorithmic trading today.very obviously I’m seeing the results.
@Anthea EldridgeTrust me she is very awesome in management and my weekly returns is mind blowing..
Extremely point by point video Well I will also say this here, Most people don’t understand the concept of “buying the dip” buying the dip is all about buying digital assets when their prices are down and selling off when the price rises. Holding is great, although trading is far more profitable. I was able to grasp the knowledge of trading crypt0 assets early enough, but I was still limited due to my lack of technical understanding of how to analyze the digital market, all that changed when I encountered *Linux Tech Corps* , I must confess it was easier to understand with the assistance of Andy that has made me over good ᴄoin.
Thank you for being there *Linuxtechcorps?org* when I wanted you to….. I was lost in this new world that I was hassled to start with ….you not only guided me along the way but you also showed me the proper way….whatever little I have been able to achieve in life is because of you today ….. I want to thank you for being there and showing me the proper way of doing thing for me you are my best guide as you truly showed me the way to life….once again , I would like to tell you a heartfelt thanks for being there
This service never fail I’m glad all the testimonies I hear about *Linuxtechcorps?org* is true without doubt working ? percent and don’t get into trouble anymore,I really appreciate all the time I got everything you said it works as usually predicted
Thank you for this piece – it cleared up many of the “But how do they know that…” kind of questions I have about this subject.
17:30 block creators
17:51 block reward
18:29 mining
19:10 decentralized consensus
I started to look into NFTs to build more my knowledge. Your video was simple and very enjoyable to watch so thank you for publishing this content. I personally think this revolutionary way of buying /selling art or actually anything that can be classified as a virtual asset will need to be watched very closely. The sector is still widely unregulated and those activities can conceal massive risks of money laundering and financial crime at many levels. There was no case of money laundering or any suspicious activities when I made the decision to join *Linux Tech Corps*
Thank you for being there *Linuxtechcorps?org* when I wanted you to….. I was lost in this new world that I was hassled to start with ….you not only guided me along the way but you also showed me the proper way….whatever little I have been able to achieve in life is because of you today ….. I want to thank you for being there and showing me the proper way of doing thing for me you are my best guide as you truly showed me the way to life….once again , I would like to tell you a heartfelt thanks for being there
This service never fail I’m glad all the testimonies I hear about *Linuxtechcorps?org* is true without doubt working ? percent and don’t get into trouble anymore,I really appreciate all the time I got everything you said it works as usually predicted
Interesting consideration, have to consider digital land probably won’t function like physical land obviously but I see application. The issue right now is no one can foresee where this space is heading. Metaverse is an obvious choice in purchasing land as it’s backed by FB but when I bought my VR headset a lot of people didn’t want to have any association with FB like having to create an account to access their VR profile. I think if fears of future pandemics persist people will be more willing to stay home and interact on VR for shopping and social events, not to mention viewing events in other countries without the costs of flying, etc. There’s a lot of potential and opportunity to integrate with cryptocurrency when you deal with the right source like Virtualcryptomines?com but there’s probably a long way until a platform exists for it
scam
Wow. This was incredibly well illustrated and well done
“I’m still confused, but on a higher level!”
I still don’t understand how or who created the first 50 Bitcoin’s that was rewarded. I get how currency is the transaction history and but I don’t understand the part how the initial bitcoin was created so it can be rewarded and miners can start validating transactions. Because if there are not bitcoins there can’t be any transactions to validate. If someone can explain that would be amazing!
Higher level is considered as something that can be understood by human easily so you should not be confused at Higher level
That’s a progress! Congratulation to us!
Great video.
There is a question that confuses me. If mining is essentially verifying transactions, whereby new bitcoin are created and assigned to the miner, how did we mine bitcoin before there was any public need for transactions as there is today? Did someone or a group of people essentially seed it by sending transactions whose only real purpose at the time was to generate more bitcoin?
Review the video again. At one point while discussing this, the video explains that the very early ‘transactions’ were empty except for the ‘reward’ for the miner / block-verifier. This ‘created’ some bitcoin even though no actual transaction was recorded.
Blocks can be empty, it’s just that their _purpose_ is to verify transactions.
There’s a few questions that I have about how cryptocurrency works that are not addressed in this video, specifically, the costs of transactions and storage:
1.) How much storage space does a ledger take up? If everybody has to have a copy of it, won’t it eventually become so big that average consumers won’t have hard drives big enough to store it? If so, how would it still be reliable?
2.) How much energy does it cost to actually mine a coin, and how does that cost not offset the value of the mined coin?
@Timofey Prikhodko I did in fact learn this recently, but still, in the grand scheme, the full thing is still smaller than a lot of modern video games, incredibly.
@Digi both BTC and Monero also allow for storage and usage of the pruned chain, which is about three times smaller; the mechanism was described in the original whitepaper about BTC by S.N.
Excuse the funky wording, have to avoid certain keywords because the youtube robots shadowed my other reply.
1) The current ledger is about 300GB in total, which is typically a non-issue for people who are actually into this kind of thing.
2) Energy expenditure has been estimated to be somewhere around 91 terawatt hours per year, more than the total output of several countries – scaled to fit your question, it takes about 272000 kWh (enough to power the average home for about 25 years) to make ONE (though since they’re given in chunks of 6.25 at a time, it’s more like 150 years). Ironically, you can maybe start to see why this isn’t something that “offsets” its value; rather, it provides it instead. Notice the correlation; as soon as it becomes energy-efficient is also the moment it becomes worthless. It’s also not-so-slowly killing our planet! 🙂
This is legit one of the best educational videos I have ever watched. I am stunned as to how you can concisely summarise all the core parts of a cryptocurrency in under 30 minutes!
Peercoin 8$ price ?
Top-notch explanation, very clear, I shall send this out rather than explain myself in future.
I wish I had your gift for teaching. Thank you for your channel.
*Determination is highly needed in stocks trading. What most people see at a glance wealth, a great career, purpose is the result of hard work and hustle over time*
moneyhaveninvestment?org ! the real deal
I can’t remember when last I used physical machines for mining. I will stick with tech host farms’ cloud mining services they are the best.
Bitcoin and Cryptocurrencies are one of those topics in my upcoming cryptography exam that I’m still pretty confused about. But this helped me to advance my knowledge a little! c:
Interesting consideration, have to consider digital land probably won’t function like physical land obviously but I see application. The issue right now is no one can foresee where this space is heading. Metaverse is an obvious choice in purchasing land as it’s backed by FB but when I bought my VR headset a lot of people didn’t want to have any association with FB like having to create an account to access their VR profile. I think if fears of future pandemics persist people will be more willing to stay home and interact on VR for shopping and social events, not to mention viewing events in other countries without the costs of flying, etc. There’s a lot of potential and opportunity to integrate with cryptocurrency when you deal with the right source like *VirtualCryptoMines?Com* but there’s probably a long way until a platform exists for it.
That’s the more reason *VirtualCryptoMines* is still my favorite investor he guides me and still give me all the information I have to know about Bitcoin and other crypto currency.
Right ! . Real Investors will tell you the heights at which *virtual crypto mines* have come
This is one of the best video explaining the flow of cryptocurrency in a simpler way .Thanks for your effort !
Prior to watching this I didn’t really understand the link between mining and validating the transactions. Its quite interesting how the system can self-adjust to make sure that miningvalidating is always profitable, and therefore even if there is a big crash in mining profitability it should just result in a slowdown of transactions until the system balances. I guess the issue is that there is a big problem if the coin is used for real large scale commercebusiness that rely on guaranteed volume. If a large enough proportion of bitcoin transactions were for real vital goods and services, then a crash in mining profitability could drive he value to zero since the value would be much more tied to the amount of volume the system can handle. Lack of trust could continually inflate it, which would then continually make it harder to restore validation capacity. Volatility is an issue for real world business even if the overall trend is continually upwards.
If I am correct, then it would suggest that bitcoin will remain a speculation asset and a store of value rather than a replacement for sovereign currencies?
@Alberto T. Why are deflationary currencies bad ?? I don’t really understand can you explain
volatility is probably because it’s not mass adopted yet. but scaling is the problem
@Alberto T. Incorrect. The majority of energy used for Bitcoin mining is already from renewable energy sources. In terms of profit potential, bitcoin mining is designed in such a way that implicitly requires the necessity for cheap, renewable forms of energy production. And thus, Bitcoin mining actually incentivizes the need for advancements in technology for renewables and that is exactly what is currently being done. We will look back on this one day and realize that something as controversial as bitcoin mining turned out to be the technological catalyst the planet needed all along.
@Alberto T. And what about inflationary currencies? There may be unforeseen consequences due to the energy expenditure, but I feel that pales in comparison to the gymnastics that fiat currencies have given rise too. If the result is sound money that prevents the manipulation of central banks, then it might be a price worth paying. Just food for thought. Governments WILL use the climate as an excuse to restrict access to private citizens’ crypto.
I agree we need better energy solutions though. It may have just been a passing thought, but I think carbon capture is a waste of time from what little I’ve researched.
I’ve watched many different videos on the subject and even did a course – but this is the best explanation by far.