Understanding Bitc


Bagian 1 - Foundations
Sudah cukup banyak diskusi mengenai Bitcoin, dan banyak figur publik yang dipaksa untuk mengutarakan opini mereka. Bitc merupakan topik yang kompleks, meliputi kriptografi, software engineering, dan ekonomi.

Understanding Bitcoin: Cryptography, Engineering and Economics is written by Pedro Franco. As the title, this book introduces about Bitcoin. Bitcoin is a digital money, or people call it “cryptocurrency”. Digital money is popular now, especially Bitcoin. But there are still many people misunderstanding with Bitcoin. It makes Pedro Franco writes Understanding Bitcoin to give financial professionals resource and technical guide to the cryptography, engineering, and economic development of Bitcoin and other cryptocurrencies.
The author writes this book with step-by-step description of how Bitcoin works, starting with introduction what Bitcoin is, the technology in Bitcoin, and information about Bitcoin in other sectors. He explains how transactions are processed, exploring the blockchain and reviewing how the wallet and mining technologies are structured.
Bitcoin is controlled by algorithm, not a company or others entity. Many people thinks wrong about it. Bitcoin is based on a peer-to-peer network of computers running the software. It is open source software. It means the source code available for anyone to use, modify, and redistribute free of charge.
The book contains three parts contents, with 14 chapters description. There are 268 pages. This book is begun with introduction of Bitcoin and the affect of Bitcoin to economics sector. Bitcoin is not only the currency, it is also the technology. The digital transfer of Bitcoin’s value uses the smart contracts. Smart contracts are contracts that do not require human interpretation or intervention to complete. Their settlement is done entirely by running a computer program. When doing transaction, cryptography is used to sign the transaction. And the address is needed to do it. The address is the public part of a public-private cryptographic key. It means Bitcoin address are not exactly public keys, but are derived from public keys. While the private part of the key is under the control of user.
Then the introduction of Bitcoin technology, pros and cons in economic sector. Bitcoin’s distributed database is called the blockchain. Transaction are grouped in blocks of transactions every 10 minutes. These blocks of transactions are then recorded one after the other in a chain of blocks, hence the name blockchain. One of the important things in distributing Bitcoin is wallet. Wallet is the software that helps a user manage her funds. The function of the wallet software are to hold (securely) the user’s private keys, create transactions that are sent to the network, and collect incoming and outgoing transactions to show the balance of available funds to the user. As a user can own many addresses, most software wallets are ready to manage multiple addresses, aggregating the funds across them.
And the application of Bitcoin in business, Bitcoin is as a cost-effective payment system. This section will present some business models that are being created around this application. Such as money transfer, exchanges, payment processors, web wallets, mining, and ATMs. Transferring money by using Bitcoin is less cost than transferring by using current money transmitters. Exchanges allow users to convert bitcoins (and other cryptocurrencies) to flat money. Some exchanges allow the conversion of different cryptocurrencies, such as between bitcoin and alt-coins. Payment processors offer solutions to merchants to accept bitcoin as payment. The payment processor converts the bitcoins to USD using and exchange, and returns the USD to the merchant. Bitcoins ATMs allow users to buy or sell bitcoins with cash.
Part two tells about bitcoin technology within. This part is divided to five chapters. Beginning by explaining about public key cryptography. Bitcoin is a cryptocurrency. Without cryptography Bitcoin could not have existed. This chapter explains the importance of cryptography in Bitcoin’s design. This chapter serves the purpose of both introducing cryptography and highlighting the main public key cryptography algorithms used in Bitcoin.
The next chapter explains about transactions. Bitcoin is not inside in user’s computers. They are entries into a distributed database called the blockchain. This is not like centralized digital currencies, Bitcoin’s blockchain does not store account and balances, but the blockchain stores transactions. Transaction are composed of a list of transaction inputs and a list of transaction outputs.
Then, chapter seven is about the blockchain. In this chapter will explain about the blockchain within, such as hash functions. A hash function is an algorithm that takes data of arbitrary length as an input and outputs a bit-string of fixed length, named the hash value. The hash value is always the same for the same input data. Bitcoin uses cryptography hash functions to perform proof-of-work. Cryptographic hash functions (sometimes called secure hash functions) impose additional requirements over regular hash functions, they are one-way, weak collision resistance, and strong collision resistance. Then about time-stamp. A digital time-stamp is analogous to a physical time-stamp,  such as a postmark on a letter or a rubber stamp from an official organism. The next section explains proof-of-work. One possible defence against the attacks is to require the client requesting the service prove that some work has been done, i.e. proof-of-work. It could be the solution of a computationally-hard problem, a memory-hard problem, a problem requiring user intervention, and so on.
In the third chapter, wallets are explained within. Early by symmetric key cryptography, and followed by explanation about some wallets. There are offline wallets, web wallets, brain wallets, deterministic wallet, and multisignature wallets. In this chapter also explains about the payment protocol.
And the last chapter in the part two is about mining. Mining is the process of adding blocks to the blockchain. Miners contribute their computational power to solve the blocks that are added to the blockchain. The network gives them with the reward that collected from all the transaction.
Part three is talking about the cryptocurrencies landscape. This chapter says about the origins of bitcoin and the variant of alternative coins. Here also discusses the odds and ends of Bitcoin.
In summary, Understanding Bitcoin is good for those who want to know about Bitcoin. It is suitable to correct the misconception about Bitcoin. It is recommended to the expert of computer and information technology, and the college students at Information Technology faculty. Or for the businessman who want to know about what and how Bitcoin work. Overall, this book is good because contained the basic description of Bitcoin and written in language style which easy to understand.
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