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Title:
06-55 Longest Block Chain
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Description:
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Now what happens in the network is
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at each time step a new block is created
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that validates all the transactions in that block.
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At the point where this block is created,
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this has to be the longest block chain.
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That's the way that Bob can validate
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that this was a valid spend.
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Someone could try to create an alternate block chain.
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So if Bob wants to spend the coin twice,
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what Bob would need to do is create a chain
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that's longer than the longest chain.
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When a transaction's validated by the network,
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all the signatures in the coin are checked.
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This is using the transfer chain,
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but to prevent double spending
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there's also a check of this chain of blocks.
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And the check is: the longest chain is the one that's viewed as correct.
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So each peer in the network might see a different view of this chain of blocks.
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If they see different views, the one that has the longest chain
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is the one that will be viewed as the most correct view of all the transactions.
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So every participant in the network
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is effectively keeping track of all transactions.
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And the version of all transactions that people trust the most
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is the one with the longest chain,
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and if an adversary wants to create a longer chain
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with a different view of transactions--
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so if Bob wants to double spend this coin and, say,
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give the same coin to both Cathy and Doug,
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what Bob would need to do is create a longer chain
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that convinces Doug that this is the correct view of the network
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and this view is incorrect.
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So that requires finding these hash values.
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If the power of the network exceeds the power of the adversary,
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well then it's likely the network will have
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a longer chain than the adversary can produce.
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Keep in mind, the motivation for producing this attack
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is just to be able to double spend one coin.
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There's still the chain of public key signatures
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that validates the transfers of each coin.
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So the resources that you would need to spend to produce a longer chain
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to convince someone that you didn't spend that coin
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in the other chain, which is now the one that would've included the previous spend
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is to find these hash values quicker than the network can.
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Then centers are set up in such a way
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to make it unlikely that someone will want to do that
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since if you do find that next hash value in the chain,
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you can create a new block, which is worth 50 bit coins
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If you create a longer chain
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trying to catch up to the chain that the network has,
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that's going to require a lot more computing resources,
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and would only allow you to respend
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the bit coins that you already owned.
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So this doesn't provide anonymity in the traditional sense.
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It avoids the need for a central authority,
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but each transaction is known to everyone in the network.
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The way to provide some anonymity is,
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instead of using your actual names in the transactions,
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you can have different identities for each transaction.
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So this is gonna be some new identity.
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It will still need to have a certificate
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that validates the public key for that,
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but it doesn't need to be tied to Alice's identity
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in any way that's visible to anyone else.
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So that's the way to provide some anonymity,
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even though all the transactions in the network are public
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to everyone who participates.
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So this actually works.
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There's at least a reasonable number of people
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that trust this currency
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and are providing computation
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to create these blocks,
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which is incentivized by creating the value of new bit coins.
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There's about 9 million bit coins currently available.
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And the marketplace fluctuates, and it depends on cost of computation
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as well as the trust in the bit coin network.
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There have been some incidents where the price fluctuated wildly
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because there was some concern about the security of the bit coin transaction site
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but the current market is fairly stable around $5 for a bit coin.
