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← 06-55 Longest Block Chain

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Showing Revision 1 created 06/29/2012 by Amara Bot.

  1. Now what happens in the network is
  2. at each time step a new block is created
  3. that validates all the transactions in that block.
  4. At the point where this block is created,
  5. this has to be the longest block chain.
  6. That's the way that Bob can validate
  7. that this was a valid spend.
  8. Someone could try to create an alternate block chain.
  9. So if Bob wants to spend the coin twice,
  10. what Bob would need to do is create a chain
  11. that's longer than the longest chain.
  12. When a transaction's validated by the network,
  13. all the signatures in the coin are checked.
  14. This is using the transfer chain,
  15. but to prevent double spending
  16. there's also a check of this chain of blocks.
  17. And the check is: the longest chain is the one that's viewed as correct.
  18. So each peer in the network might see a different view of this chain of blocks.
  19. If they see different views, the one that has the longest chain
  20. is the one that will be viewed as the most correct view of all the transactions.
  21. So every participant in the network
  22. is effectively keeping track of all transactions.
  23. And the version of all transactions that people trust the most
  24. is the one with the longest chain,
  25. and if an adversary wants to create a longer chain
  26. with a different view of transactions--
  27. so if Bob wants to double spend this coin and, say,
  28. give the same coin to both Cathy and Doug,
  29. what Bob would need to do is create a longer chain
  30. that convinces Doug that this is the correct view of the network
  31. and this view is incorrect.
  32. So that requires finding these hash values.
  33. If the power of the network exceeds the power of the adversary,
  34. well then it's likely the network will have
  35. a longer chain than the adversary can produce.
  36. Keep in mind, the motivation for producing this attack
  37. is just to be able to double spend one coin.
  38. There's still the chain of public key signatures
  39. that validates the transfers of each coin.
  40. So the resources that you would need to spend to produce a longer chain
  41. to convince someone that you didn't spend that coin
  42. in the other chain, which is now the one that would've included the previous spend
  43. is to find these hash values quicker than the network can.
  44. Then centers are set up in such a way
  45. to make it unlikely that someone will want to do that
  46. since if you do find that next hash value in the chain,
  47. you can create a new block, which is worth 50 bit coins
  48. If you create a longer chain
  49. trying to catch up to the chain that the network has,
  50. that's going to require a lot more computing resources,
  51. and would only allow you to respend
  52. the bit coins that you already owned.
  53. So this doesn't provide anonymity in the traditional sense.
  54. It avoids the need for a central authority,
  55. but each transaction is known to everyone in the network.
  56. The way to provide some anonymity is,
  57. instead of using your actual names in the transactions,
  58. you can have different identities for each transaction.
  59. So this is gonna be some new identity.
  60. It will still need to have a certificate
  61. that validates the public key for that,
  62. but it doesn't need to be tied to Alice's identity
  63. in any way that's visible to anyone else.
  64. So that's the way to provide some anonymity,
  65. even though all the transactions in the network are public
  66. to everyone who participates.
  67. So this actually works.
  68. There's at least a reasonable number of people
  69. that trust this currency
  70. and are providing computation
  71. to create these blocks,
  72. which is incentivized by creating the value of new bit coins.
  73. There's about 9 million bit coins currently available.
  74. And the marketplace fluctuates, and it depends on cost of computation
  75. as well as the trust in the bit coin network.
  76. There have been some incidents where the price fluctuated wildly
  77. because there was some concern about the security of the bit coin transaction site
  78. but the current market is fairly stable around $5 for a bit coin.