title
But how does bitcoin actually work?

description
The math behind cryptocurrencies. Help fund future projects: https://www.patreon.com/3blue1brown An equally valuable form of support is to simply share some of the videos. Special thanks to these supporters: http://3b1b.co/btc-thanks This video was also funded with help from Protocol Labs: https://protocol.ai/join/ Some people have asked if this channel accepts contributions in cryptocurrency form. As a matter of fact, it does: http://3b1b.co/crypto ENS: 3b1b.eth 2^256 video: https://youtu.be/S9JGmA5_unY Music by Vincent Rubinetti: https://soundcloud.com/vincerubinetti/heartbeat Here are a few other resources I'd recommend: Original Bitcoin paper: https://bitcoin.org/bitcoin.pdf Block explorer: https://blockexplorer.com/ Blog post by Michael Nielsen: https://goo.gl/BW1RV3 (This is particularly good for understanding the details of what transactions look like, which is something this video did not cover) Video by CuriousInventor: https://youtu.be/Lx9zgZCMqXE Video by Anders Brownworth: https://youtu.be/_160oMzblY8 Ethereum white paper: https://goo.gl/XXZddT Timestamps: 0:00 - Introduction 2:25 - Ledgers and digital signatures 7:21 - The ledger is the currency 10:06 - Decentralization 12:26 - Cryptographic hash functions 14:38 - Proof of work and blockchains 19:42 - Double spending 21:41 - Block times, halvenings, and transaction fees 24:40 - Thanks ------------------ Animations are largely made using manim, a scrappy open-source python library. https://github.com/3b1b/manim 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. Download the music on Bandcamp: https://vincerubinetti.bandcamp.com/album/the-music-of-3blue1brown Stream the music on Spotify: https://open.spotify.com/album/1dVyjwS8FBqXhRunaG5W5u 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. ------------------ 3blue1brown is a channel about animating math, in all senses of the word animate. And you know the drill with YouTube, if you want to stay posted on new videos, subscribe, and click the bell to receive notifications (if you're into that). If you are new to this channel and want to see more, a good place to start is this playlist: http://3b1b.co/recommended Various social media stuffs: Website: https://www.3blue1brown.com Twitter: https://twitter.com/3Blue1Brown Patreon: https://patreon.com/3blue1brown Facebook: https://www.facebook.com/3blue1brown Reddit: https://www.reddit.com/r/3Blue1Brown

detail
{'title': 'But how does bitcoin actually work?', 'heatmap': [{'end': 319.547, 'start': 300.942, 'weight': 0.724}, {'end': 854.153, 'start': 828.959, 'weight': 0.753}, {'end': 915.825, 'start': 894.052, 'weight': 0.935}, {'end': 1048.499, 'start': 1028.256, 'weight': 0.705}, {'end': 1108.171, 'start': 1090.063, 'weight': 0.819}, {'end': 1288.939, 'start': 1264.082, 'weight': 0.85}, {'end': 1321.795, 'start': 1302.247, 'weight': 0.925}], 'summary': 'Covers understanding cryptocurrencies, digital signatures for trust in transactions, cash settlement using an honor system, cryptographic hash functions like sha-256, and the bitcoin protocol with its limited supply of 21 million bitcoin, emphasizing the importance of technical details and decentralized trustless verification.', 'chapters': [{'end': 144.528, 'segs': [{'end': 83.585, 'src': 'embed', 'start': 44.922, 'weight': 0, 'content': [{'end': 50.364, 'text': "and if you're clever enough to bring in a few ideas from cryptography to help circumvent the need for trust,", 'start': 44.922, 'duration': 5.442}, {'end': 52.985, 'text': "what you end up with is what's called a cryptocurrency.", 'start': 50.364, 'duration': 2.621}, {'end': 62.488, 'text': 'You see, Bitcoin is just the first implemented example of a cryptocurrency, and now there are thousands more on exchanges with traditional currencies.', 'start': 53.725, 'duration': 8.763}, {'end': 73.117, 'text': "Walking the path of inventing your own can help to set the foundations for understanding some of the more recent players in the game and recognizing when and why there's room for different design choices.", 'start': 63.288, 'duration': 9.829}, {'end': 81.504, 'text': "In fact, one of the reasons I chose this topic is that in the last year, there's been a huge amount of attention and investment and, well honestly,", 'start': 74.097, 'duration': 7.407}, {'end': 83.585, 'text': 'hype directed at these currencies.', 'start': 81.504, 'duration': 2.081}], 'summary': 'Cryptocurrencies, like bitcoin, have gained significant attention and investment in the last year, with thousands now on exchanges with traditional currencies.', 'duration': 38.663, 'max_score': 44.922, 'thumbnail': 'https://coursnap.oss-ap-southeast-1.aliyuncs.com/video-capture/bBC-nXj3Ng4/pics/bBC-nXj3Ng444922.jpg'}, {'end': 150.412, 'src': 'embed', 'start': 125.016, 'weight': 2, 'content': [{'end': 130.958, 'text': "there's lots of user-friendly applications that let you just send and receive the currencies without thinking about what's going on.", 'start': 125.016, 'duration': 5.942}, {'end': 137.062, 'text': 'The difference is that the backbone underlying this is not a bank that verifies transactions.', 'start': 131.778, 'duration': 5.284}, {'end': 144.528, 'text': "Instead, it's a clever system of decentralized trustless verification based on some of the math born in cryptography.", 'start': 137.663, 'duration': 6.865}, {'end': 150.412, 'text': 'But to start, I want you to actually set aside the thought of cryptocurrencies and all that just for a few minutes.', 'start': 145.909, 'duration': 4.503}], 'summary': 'Decentralized trustless verification system for currency transactions, based on cryptography.', 'duration': 25.396, 'max_score': 125.016, 'thumbnail': 'https://coursnap.oss-ap-southeast-1.aliyuncs.com/video-capture/bBC-nXj3Ng4/pics/bBC-nXj3Ng4125016.jpg'}], 'start': 4.284, 'title': 'Understanding cryptocurrencies', 'summary': 'Delves into the concept of bitcoin, its underlying technology, and the growth of cryptocurrencies, stressing the significance of grasping technical details and the necessity for decentralized trustless verification.', 'chapters': [{'end': 144.528, 'start': 4.284, 'title': 'Understanding cryptocurrencies', 'summary': 'Discusses the concept of bitcoin, the underlying technology, and the growth of cryptocurrencies, emphasizing the importance of understanding the technical details and the need for decentralized trustless verification.', 'duration': 140.244, 'highlights': ['Bitcoin is the first implemented example of a cryptocurrency, and now there are thousands more on exchanges with traditional currencies.', "In the last year, there's been a huge amount of attention and investment directed at cryptocurrencies.", 'The backbone underlying cryptocurrencies is a clever system of decentralized trustless verification based on cryptography.']}], 'duration': 140.244, 'thumbnail': 'https://coursnap.oss-ap-southeast-1.aliyuncs.com/video-capture/bBC-nXj3Ng4/pics/bBC-nXj3Ng44284.jpg', 'highlights': ["There's been a huge amount of attention and investment directed at cryptocurrencies. (Relevance: 3)", 'Bitcoin is the first implemented example of a cryptocurrency, and now there are thousands more on exchanges with traditional currencies. (Relevance: 2)', 'The backbone underlying cryptocurrencies is a clever system of decentralized trustless verification based on cryptography. (Relevance: 1)']}, {'end': 441.964, 'segs': [{'end': 181.649, 'src': 'embed', 'start': 145.909, 'weight': 2, 'content': [{'end': 150.412, 'text': 'But to start, I want you to actually set aside the thought of cryptocurrencies and all that just for a few minutes.', 'start': 145.909, 'duration': 4.503}, {'end': 153.235, 'text': "We're going to begin the story with something more down to earth.", 'start': 151.033, 'duration': 2.202}, {'end': 155.396, 'text': 'Ledgers and digital signatures.', 'start': 153.675, 'duration': 1.721}, {'end': 158.999, 'text': 'If you and your friends exchange money pretty frequently,', 'start': 156.437, 'duration': 2.562}, {'end': 164.002, 'text': 'you know paying your share of the dinner bill and such It can be inconvenient to exchange cash all the time.', 'start': 158.999, 'duration': 5.003}, {'end': 169.964, 'text': 'So you might keep a communal ledger that records all of the payments that you intend to make some point in the future.', 'start': 164.662, 'duration': 5.302}, {'end': 174.746, 'text': 'You know, Alice pays Bob $20, Bob pays Charlie $40, things like that.', 'start': 170.464, 'duration': 4.282}, {'end': 181.649, 'text': 'This ledger is going to be something public and accessible to everyone, like a website where anyone can go and just add new lines.', 'start': 175.566, 'duration': 6.083}], 'summary': 'Explains the concept of communal ledgers for exchanging money among friends.', 'duration': 35.74, 'max_score': 145.909, 'thumbnail': 'https://coursnap.oss-ap-southeast-1.aliyuncs.com/video-capture/bBC-nXj3Ng4/pics/bBC-nXj3Ng4145909.jpg'}, {'end': 299.334, 'src': 'embed', 'start': 272.413, 'weight': 0, 'content': [{'end': 276.056, 'text': "Now as the name suggests, this secret key, it's something you want to keep to yourself.", 'start': 272.413, 'duration': 3.643}, {'end': 281.644, 'text': "In the real world, your handwritten signature looks the same no matter what document you're signing.", 'start': 277.082, 'duration': 4.562}, {'end': 286.967, 'text': 'But a digital signature is actually much stronger, because it changes for different messages.', 'start': 282.465, 'duration': 4.502}, {'end': 293.331, 'text': 'It looks like some string of ones and zeros, commonly something like 256 bits,', 'start': 287.968, 'duration': 5.363}, {'end': 299.334, 'text': 'and altering the message even slightly completely changes what the signature on that message should look like.', 'start': 293.331, 'duration': 6.003}], 'summary': 'Digital signatures are stronger than handwritten ones, changing for different messages and typically consisting of 256 bits.', 'duration': 26.921, 'max_score': 272.413, 'thumbnail': 'https://coursnap.oss-ap-southeast-1.aliyuncs.com/video-capture/bBC-nXj3Ng4/pics/bBC-nXj3Ng4272413.jpg'}, {'end': 328.089, 'src': 'heatmap', 'start': 300.942, 'weight': 0.724, 'content': [{'end': 308.464, 'text': 'Speaking a little more formally, producing a signature involves a function that depends both on the message itself and on your private key.', 'start': 300.942, 'duration': 7.522}, {'end': 312.925, 'text': 'The private key ensures that only you can produce that signature,', 'start': 309.264, 'duration': 3.661}, {'end': 319.547, 'text': 'and the fact that it depends on the message means that no one can just copy one of your signatures and then forge it on another message.', 'start': 312.925, 'duration': 6.622}, {'end': 328.089, 'text': 'Hand in hand with this is a second function used to verify that a signature is valid, and this is where the public key comes into play.', 'start': 321.107, 'duration': 6.982}], 'summary': 'Producing a signature involves a function dependent on message and private key, ensuring uniqueness and preventing forgery.', 'duration': 27.147, 'max_score': 300.942, 'thumbnail': 'https://coursnap.oss-ap-southeast-1.aliyuncs.com/video-capture/bBC-nXj3Ng4/pics/bBC-nXj3Ng4300942.jpg'}, {'end': 441.964, 'src': 'embed', 'start': 418.868, 'weight': 1, 'content': [{'end': 427.015, 'text': 'what we do is make it so that, when you sign a transaction, the message has to also include some sort of unique ID associated with that transaction.', 'start': 418.868, 'duration': 8.147}, {'end': 435.323, 'text': 'That way, if Alice pays Bob $100 multiple times, each one of those lines on the ledger requires a completely new signature.', 'start': 427.876, 'duration': 7.447}, {'end': 437.683, 'text': 'Alright, great.', 'start': 436.983, 'duration': 0.7}, {'end': 441.964, 'text': 'Digital signatures remove a huge aspect of trust in this initial protocol.', 'start': 438.143, 'duration': 3.821}], 'summary': 'Adding unique ids to each transaction prevents duplicate payments and requires new signatures, enhancing trust and security in the protocol.', 'duration': 23.096, 'max_score': 418.868, 'thumbnail': 'https://coursnap.oss-ap-southeast-1.aliyuncs.com/video-capture/bBC-nXj3Ng4/pics/bBC-nXj3Ng4418868.jpg'}], 'start': 145.909, 'title': 'Digital signatures', 'summary': 'Discusses the use of digital signatures for trust in transactions, emphasizing their strength in preventing forgeries and the potential for a public ledger accessible to everyone, providing a high level of security.', 'chapters': [{'end': 203.618, 'start': 145.909, 'title': 'Ledgers and digital signatures', 'summary': 'Discusses the concept of communal ledgers and digital signatures for recording and settling payments, highlighting the inconvenience of exchanging cash and the potential for a public ledger accessible to everyone.', 'duration': 57.709, 'highlights': ['Communal ledger records all payments for future transactions', 'Inconvenience of exchanging cash for frequent transactions', 'Potential for a public ledger accessible to everyone']}, {'end': 441.964, 'start': 203.618, 'title': 'Digital signatures and trust', 'summary': 'Explores the use of digital signatures to ensure trust in transactions, emphasizing the strength of digital signatures in preventing forgeries and the large number of possible signatures, providing a high level of security in the verification process.', 'duration': 238.346, 'highlights': ['Digital signatures are created using a public key-private key pair, making it infeasible for anyone else to forge the signature, with a signature length of 256 bits providing a high level of security.', 'The number of signatures with a length of 256 bits is 2 to the power of 256, a remarkably large number, ensuring confidence in the validity of signatures.', 'Including a unique ID associated with each transaction in the message ensures that each line on the ledger requires a completely new signature, mitigating the risk of copying valid signatures for multiple transactions.']}], 'duration': 296.055, 'thumbnail': 'https://coursnap.oss-ap-southeast-1.aliyuncs.com/video-capture/bBC-nXj3Ng4/pics/bBC-nXj3Ng4145909.jpg', 'highlights': ['Digital signatures with 256-bit length provide high security', 'Unique ID for each transaction ensures new signature for each line on the ledger', 'Potential for a public ledger accessible to everyone', 'Communal ledger records all payments for future transactions', 'Inconvenience of exchanging cash for frequent transactions']}, {'end': 746.443, 'segs': [{'end': 472.48, 'src': 'embed', 'start': 442.364, 'weight': 1, 'content': [{'end': 447.185, 'text': 'But even still, if you were to really do this, you would be relying on an honor system of sorts.', 'start': 442.364, 'duration': 4.821}, {'end': 452.626, 'text': "Namely, you're trusting that everyone will actually follow through and settle up in cash at the end of each month.", 'start': 447.745, 'duration': 4.881}, {'end': 459.108, 'text': 'What if, for example, Charlie racks up thousands of dollars in debt and just refuses to show up?', 'start': 453.627, 'duration': 5.481}, {'end': 467.077, 'text': "The only real reason to revert back to cash to settle up is if some people I'm looking at you, Charlie owe a lot of money.", 'start': 460.233, 'duration': 6.844}, {'end': 472.48, 'text': 'So maybe you have the clever idea that you never actually have to settle up in cash,', 'start': 468.018, 'duration': 4.462}], 'summary': 'Relying on an honor system for settling debts in cash, but risks arise if someone refuses to pay up.', 'duration': 30.116, 'max_score': 442.364, 'thumbnail': 'https://coursnap.oss-ap-southeast-1.aliyuncs.com/video-capture/bBC-nXj3Ng4/pics/bBC-nXj3Ng4442364.jpg'}, {'end': 507.046, 'src': 'embed', 'start': 477.403, 'weight': 3, 'content': [{'end': 484.608, 'text': 'Maybe what you do is start by having everyone pay $100 into the pot and then have the first few lines of the ledger read Alice gets $100,', 'start': 477.403, 'duration': 7.205}, {'end': 485.808, 'text': 'Bob gets $100, Charlie gets $100, etc.', 'start': 484.608, 'duration': 1.2}, {'end': 495.943, 'text': "Now, just don't accept any transactions where someone is spending more than they already have on that ledger.", 'start': 489.201, 'duration': 6.742}, {'end': 507.046, 'text': 'For example, if the first two transactions are CharliePaysAlice $50 and CharliePaysBob $50, if he were to try to add CharliePaysYou $20,', 'start': 496.823, 'duration': 10.223}], 'summary': 'Proposing a system where everyone pays $100, with ledger transactions preventing overspending.', 'duration': 29.643, 'max_score': 477.403, 'thumbnail': 'https://coursnap.oss-ap-southeast-1.aliyuncs.com/video-capture/bBC-nXj3Ng4/pics/bBC-nXj3Ng4477403.jpg'}, {'end': 546.587, 'src': 'embed', 'start': 520.145, 'weight': 0, 'content': [{'end': 525.889, 'text': 'And this is more or less also going to be true in cryptocurrencies, though there is a little room for optimization.', 'start': 520.145, 'duration': 5.744}, {'end': 535.52, 'text': "What's interesting here is that this step removes the connection between the ledger and actual physical US dollars.", 'start': 528.715, 'duration': 6.805}, {'end': 543.645, 'text': 'In theory, if everyone in the world was using this ledger, you could live your whole life just sending and receiving money on this ledger,', 'start': 536.36, 'duration': 7.285}, {'end': 546.587, 'text': 'without ever having to convert to real US dollars.', 'start': 543.645, 'duration': 2.942}], 'summary': 'Cryptocurrencies allow global transactions without converting to us dollars.', 'duration': 26.442, 'max_score': 520.145, 'thumbnail': 'https://coursnap.oss-ap-southeast-1.aliyuncs.com/video-capture/bBC-nXj3Ng4/pics/bBC-nXj3Ng4520145.jpg'}, {'end': 643.335, 'src': 'embed', 'start': 613.024, 'weight': 5, 'content': [{'end': 618.368, 'text': "So far, I've said that this ledger is in some public place, like a website where anyone can add new lines.", 'start': 613.024, 'duration': 5.344}, {'end': 623.951, 'text': 'But that would require trusting a central location, namely who hosts the website??', 'start': 619.208, 'duration': 4.743}, {'end': 626.693, 'text': 'Who controls the rules of adding new lines?', 'start': 624.271, 'duration': 2.422}, {'end': 631.917, 'text': "To remove that bit of trust, we'll have everybody keep their own copy of the ledger.", 'start': 627.554, 'duration': 4.363}, {'end': 637.385, 'text': 'Then, when you want to make a transaction like Alice Pays Bob 100 Ledger Dollars,', 'start': 632.737, 'duration': 4.648}, {'end': 643.335, 'text': 'what you do is broadcast that out into the world for people to hear and to record on their own private ledgers.', 'start': 637.385, 'duration': 5.95}], 'summary': 'To ensure trustless transactions, each person keeps their own copy of the ledger and broadcasts transactions for others to record.', 'duration': 30.311, 'max_score': 613.024, 'thumbnail': 'https://coursnap.oss-ap-southeast-1.aliyuncs.com/video-capture/bBC-nXj3Ng4/pics/bBC-nXj3Ng4613024.jpg'}, {'end': 732.124, 'src': 'embed', 'start': 704.577, 'weight': 4, 'content': [{'end': 711.779, 'text': 'At a high level, the solution that Bitcoin offers is to trust whichever ledger has the most computational work put into it.', 'start': 704.577, 'duration': 7.202}, {'end': 714.8, 'text': "I'll take a moment to explain exactly what that means.", 'start': 712.579, 'duration': 2.221}, {'end': 717.94, 'text': 'It involves this thing called a cryptographic hash function.', 'start': 715.28, 'duration': 2.66}, {'end': 725.302, 'text': "The general idea that we'll build to is that if you use computational work as a basis for what to trust,", 'start': 718.52, 'duration': 6.782}, {'end': 732.124, 'text': 'you can make it so that fraudulent transactions and conflicting ledgers would require an infeasible amount of computation to bring about.', 'start': 725.302, 'duration': 6.822}], 'summary': "Bitcoin's trust in ledger is based on computational work, making fraud infeasible.", 'duration': 27.547, 'max_score': 704.577, 'thumbnail': 'https://coursnap.oss-ap-southeast-1.aliyuncs.com/video-capture/bBC-nXj3Ng4/pics/bBC-nXj3Ng4704577.jpg'}], 'start': 442.364, 'title': 'Cash settlement, debt management, cryptocurrency ledger, and trust', 'summary': 'Delves into the use of an honor system for cash settlement, addressing the potential debt issue, proposing ledger usage. it discusses cryptocurrency ledger, detached from physical us dollars, and the trust issue in maintaining a consensus, while introducing computational work to trust the ledger.', 'chapters': [{'end': 519.325, 'start': 442.364, 'title': 'Cash settlement and debt management', 'summary': 'Discusses the reliance on an honor system for settling up in cash, the potential issue of individuals accruing significant debts, and the proposal of using a ledger to prevent overspending and manage debt.', 'duration': 76.961, 'highlights': ['The reliance on an honor system for settling up in cash', 'The potential issue of individuals accruing significant debts', 'Proposal of using a ledger to prevent overspending and manage debt']}, {'end': 746.443, 'start': 520.145, 'title': 'Cryptocurrency ledger and trust', 'summary': 'Explains the concept of a cryptocurrency ledger, the removal of connection between the ledger and physical us dollars, and the trust issue in maintaining a consensus on the ledger. it also introduces the concept of using computational work to trust a ledger.', 'duration': 226.298, 'highlights': ['The removal of connection between the ledger and physical US dollars allows for transactions to occur solely on the ledger without converting to real US dollars.', "The concept of using computational work as a basis for trust in maintaining the ledger's consensus.", 'The trust issue in maintaining a consensus on the ledger.']}], 'duration': 304.079, 'thumbnail': 'https://coursnap.oss-ap-southeast-1.aliyuncs.com/video-capture/bBC-nXj3Ng4/pics/bBC-nXj3Ng4442364.jpg', 'highlights': ['The removal of connection between the ledger and physical US dollars allows for transactions to occur solely on the ledger without converting to real US dollars.', 'The reliance on an honor system for settling up in cash', 'The potential issue of individuals accruing significant debts', 'Proposal of using a ledger to prevent overspending and manage debt', "The concept of using computational work as a basis for trust in maintaining the ledger's consensus.", 'The trust issue in maintaining a consensus on the ledger.']}, {'end': 1182.714, 'segs': [{'end': 814.55, 'src': 'embed', 'start': 772.282, 'weight': 0, 'content': [{'end': 780.092, 'text': 'But the idea is that if you slightly change the input, maybe editing just one of the characters, the resulting hash changes completely.', 'start': 772.282, 'duration': 7.81}, {'end': 784.817, 'text': "In fact, for the hash function that I'm showing here, called SHA256,", 'start': 781.053, 'duration': 3.764}, {'end': 791.566, 'text': 'the way the output changes as you slightly change that input is entirely unpredictable.', 'start': 784.817, 'duration': 6.749}, {'end': 794.631, 'text': 'You see, this is not just any hash function.', 'start': 792.469, 'duration': 2.162}, {'end': 796.933, 'text': "It's a cryptographic hash function.", 'start': 795.132, 'duration': 1.801}, {'end': 800.637, 'text': "That means it's infeasible to compute in the reverse direction.", 'start': 797.374, 'duration': 3.263}, {'end': 811.667, 'text': 'If I show you some string of ones and zeros and ask you to find an input so that the SHA-256 hash of that input gives this exact string of bits,', 'start': 801.357, 'duration': 10.31}, {'end': 814.55, 'text': 'you will have no better method than to just guess and check.', 'start': 811.667, 'duration': 2.883}], 'summary': 'Sha256 hash function is unpredictable and infeasible to reverse compute.', 'duration': 42.268, 'max_score': 772.282, 'thumbnail': 'https://coursnap.oss-ap-southeast-1.aliyuncs.com/video-capture/bBC-nXj3Ng4/pics/bBC-nXj3Ng4772282.jpg'}, {'end': 854.153, 'src': 'heatmap', 'start': 828.959, 'weight': 0.753, 'content': [{'end': 834.042, 'text': 'You might think that if you just really dig into the details of how exactly this function works,', 'start': 828.959, 'duration': 5.083}, {'end': 837.464, 'text': 'you could reverse engineer the appropriate input without having to guess and check.', 'start': 834.042, 'duration': 3.422}, {'end': 840.645, 'text': 'But no one has ever figured out a way to do that.', 'start': 838.264, 'duration': 2.381}, {'end': 846.949, 'text': "Interestingly, there's no cold hard rigorous proof that it's hard to compute in the reverse direction.", 'start': 841.586, 'duration': 5.363}, {'end': 854.153, 'text': 'And yet, a huge amount of modern security depends on cryptographic hash functions and the idea that they have this property.', 'start': 847.629, 'duration': 6.524}], 'summary': 'No rigorous proof of reversibility for cryptographic hash functions, crucial for modern security.', 'duration': 25.194, 'max_score': 828.959, 'thumbnail': 'https://coursnap.oss-ap-southeast-1.aliyuncs.com/video-capture/bBC-nXj3Ng4/pics/bBC-nXj3Ng4828959.jpg'}, {'end': 883.222, 'src': 'embed', 'start': 855.071, 'weight': 2, 'content': [{'end': 862.579, 'text': 'If you were to look at what algorithms underlie the secure connection that your browser is making with YouTube right now or that it makes with your bank,', 'start': 855.071, 'duration': 7.508}, {'end': 865.683, 'text': 'you will likely see the name SHA-256 show up in there.', 'start': 862.579, 'duration': 3.104}, {'end': 868.225, 'text': 'For right now.', 'start': 867.364, 'duration': 0.861}, {'end': 876.774, 'text': 'our focus will just be on how such a function can prove that a particular list of transactions is associated with a large amount of computational effort.', 'start': 868.225, 'duration': 8.549}, {'end': 883.222, 'text': 'Imagine, someone shows you a list of transactions and they say hey, I found a special number,', 'start': 878.058, 'duration': 5.164}], 'summary': 'Sha-256 algorithm used for secure connections, proving computational effort.', 'duration': 28.151, 'max_score': 855.071, 'thumbnail': 'https://coursnap.oss-ap-southeast-1.aliyuncs.com/video-capture/bBC-nXj3Ng4/pics/bBC-nXj3Ng4855071.jpg'}, {'end': 922.251, 'src': 'heatmap', 'start': 894.052, 'weight': 0.935, 'content': [{'end': 896.614, 'text': 'How hard do you think it was for them to find that number?', 'start': 894.052, 'duration': 2.562}, {'end': 907.237, 'text': 'Well, for a random message, the probability that a hash happens to start with 30 successive zeros is 1 in 2 to the 30, which is about 1 in a billion.', 'start': 898.049, 'duration': 9.188}, {'end': 915.825, 'text': 'And because SHA-256 is a cryptographic hash function, the only way to find a special number like that is just guessing and checking.', 'start': 908.178, 'duration': 7.647}, {'end': 922.251, 'text': 'So this person almost certainly had to go through about a billion different numbers before finding this special one.', 'start': 916.626, 'duration': 5.625}], 'summary': 'Finding a hash with 30 zeros has 1 in a billion probability.', 'duration': 28.199, 'max_score': 894.052, 'thumbnail': 'https://coursnap.oss-ap-southeast-1.aliyuncs.com/video-capture/bBC-nXj3Ng4/pics/bBC-nXj3Ng4894052.jpg'}, {'end': 1054.445, 'src': 'heatmap', 'start': 1028.256, 'weight': 0.705, 'content': [{'end': 1032.199, 'text': "which changes that block's hash, which changes the one that comes after it, and so on.", 'start': 1028.256, 'duration': 3.943}, {'end': 1041.29, 'text': 'That would require redoing all of the work, finding a new special number for each of these blocks that makes their hashes start with 60 zeros.', 'start': 1034.041, 'duration': 7.249}, {'end': 1048.499, 'text': "Because blocks are chained together like this, instead of calling it a ledger, it's common to call it a blockchain.", 'start': 1042.412, 'duration': 6.087}, {'end': 1054.445, 'text': "As part of our updated protocol, we'll now allow anyone in the world to be a block creator.", 'start': 1050.1, 'duration': 4.345}], 'summary': 'Blockchain requires finding special numbers to create blocks with 60 zeros. anyone can now be a block creator.', 'duration': 26.189, 'max_score': 1028.256, 'thumbnail': 'https://coursnap.oss-ap-southeast-1.aliyuncs.com/video-capture/bBC-nXj3Ng4/pics/bBC-nXj3Ng41028256.jpg'}, {'end': 1120.436, 'src': 'heatmap', 'start': 1090.063, 'weight': 0.819, 'content': [{'end': 1092.865, 'text': "It doesn't come from anyone, so it doesn't have to be signed.", 'start': 1090.063, 'duration': 2.802}, {'end': 1099.47, 'text': 'And it also means that the total number of ledger dollars in our economy increases with each new block.', 'start': 1093.606, 'duration': 5.864}, {'end': 1108.171, 'text': 'Creating blocks is often called mining since it requires doing a lot of work and it introduces new bits of currency into the economy.', 'start': 1100.868, 'duration': 7.303}, {'end': 1116.614, 'text': "But when you hear or read about miners, keep in mind that what they're really doing is listening for transactions, creating blocks,", 'start': 1109.071, 'duration': 7.543}, {'end': 1120.436, 'text': 'broadcasting those blocks and getting rewarded with new money for doing so.', 'start': 1116.614, 'duration': 3.822}], 'summary': 'Mining creates new ledger dollars, increasing with each block, rewarding miners for transactions.', 'duration': 30.373, 'max_score': 1090.063, 'thumbnail': 'https://coursnap.oss-ap-southeast-1.aliyuncs.com/video-capture/bBC-nXj3Ng4/pics/bBC-nXj3Ng41090063.jpg'}, {'end': 1189.5, 'src': 'embed', 'start': 1162.939, 'weight': 4, 'content': [{'end': 1167.602, 'text': "If there's a tie, just wait until you hear an additional block that makes one of them longer.", 'start': 1162.939, 'duration': 4.663}, {'end': 1174.247, 'text': "So, even though there's no central authority and everyone is maintaining their own copy of the blockchain,", 'start': 1168.702, 'duration': 5.545}, {'end': 1182.714, 'text': 'if everyone agrees to give preference to whichever blockchain has the most work put into it, we have a way to arrive at decentralized consensus.', 'start': 1174.247, 'duration': 8.467}, {'end': 1189.5, 'text': 'To see why this makes for a trustworthy system and to understand at what point you should trust that a payment is legit.', 'start': 1183.635, 'duration': 5.865}], 'summary': 'Decentralized consensus is achieved by giving preference to the blockchain with the most work put into it, ensuring trust in the system and payment legitimacy.', 'duration': 26.561, 'max_score': 1162.939, 'thumbnail': 'https://coursnap.oss-ap-southeast-1.aliyuncs.com/video-capture/bBC-nXj3Ng4/pics/bBC-nXj3Ng41162939.jpg'}], 'start': 747.984, 'title': 'Cryptographic hash functions and blockchain security', 'summary': 'Delves into the concept of cryptographic hash functions, focusing on sha-256, its unpredictable output, and its computational complexity requiring 2^256 guesses. it also explores the significance of hash functions in modern security, proof of work in transaction validation, and decentralized consensus through blockchain technology.', 'chapters': [{'end': 837.464, 'start': 747.984, 'title': 'Understanding cryptographic hash functions', 'summary': 'Explains the concept of a cryptographic hash function, such as sha-256, which produces an unpredictable and fixed-length output for any given input, making it infeasible to compute in the reverse direction, requiring 2 to the power of 256 guesses for computation.', 'duration': 89.48, 'highlights': ['The output of a hash function, such as SHA-256, is a string of bits with a fixed length, like 256 bits, and is intended to look random, while always giving the same output for a given input.', 'A slight change in the input of a hash function results in a completely different hash, making the output entirely unpredictable, especially for cryptographic hash functions like SHA-256.', 'Cryptographic hash functions, like SHA-256, are infeasible to compute in the reverse direction, requiring guesses and checks to find an input that produces a specific hash, with 2 to the power of 256 guesses being needed for computation.']}, {'end': 1182.714, 'start': 838.264, 'title': 'Cryptographic hash functions & proof of work', 'summary': 'Discusses the importance of cryptographic hash functions like sha-256 in modern security, the concept of proof of work in validating transactions, and the decentralized consensus achieved through blockchain technology.', 'duration': 344.45, 'highlights': ['Cryptographic hash functions like SHA-256 are crucial in modern security, underpinning the secure connections made by browsers with websites and banks.', 'A proof of work involves finding a special number that, when added to a list of transactions and hashed using SHA-256, results in a specific output, with the process requiring significant computational effort, demonstrated by the probability of 1 in 2 to the 30 for a random message to start with 30 zeros.', 'The blockchain protocol ensures decentralized consensus by having everyone trust the ledger with the most work, achieved through organizing ledgers into blocks, each containing a list of transactions and a proof of work, and chaining them together to form a blockchain.']}], 'duration': 434.73, 'thumbnail': 'https://coursnap.oss-ap-southeast-1.aliyuncs.com/video-capture/bBC-nXj3Ng4/pics/bBC-nXj3Ng4747984.jpg', 'highlights': ['Cryptographic hash functions like SHA-256 produce unpredictable outputs for a given input.', 'SHA-256 requires 2^256 guesses for computation in the reverse direction.', 'Hash functions underpin secure connections in modern security.', 'Proof of work using SHA-256 involves significant computational effort.', 'Blockchain protocol achieves decentralized consensus through proof of work.']}, {'end': 1499.536, 'segs': [{'end': 1321.795, 'src': 'heatmap', 'start': 1264.082, 'weight': 2, 'content': [{'end': 1273.691, 'text': 'the probability becomes overwhelming that the blockchain that all of the other miners are working on grows faster than the single fraudulent blockchain that Alice is feeding to Bob.', 'start': 1264.082, 'duration': 9.609}, {'end': 1282.757, 'text': "So after enough time, Bob's just going to reject what he's hearing from Alice in favor of the longer chain that everyone else is working on.", 'start': 1275.174, 'duration': 7.583}, {'end': 1288.939, 'text': "Notice that means that you shouldn't necessarily trust a new block that you hear immediately.", 'start': 1284.037, 'duration': 4.902}, {'end': 1293.12, 'text': 'Instead, you should wait for several new blocks to be added on top of it.', 'start': 1289.639, 'duration': 3.481}, {'end': 1300.463, 'text': "If you still haven't heard of any longer blockchains, you can trust that this block is part of the same chain that everyone else is using.", 'start': 1293.921, 'duration': 6.542}, {'end': 1305.148, 'text': "And with that, we've hit all the main ideas.", 'start': 1302.247, 'duration': 2.901}, {'end': 1313.611, 'text': 'This distributed ledger system based on a proof of work is more or less how the Bitcoin protocol works and how many other cryptocurrencies work.', 'start': 1305.848, 'duration': 7.763}, {'end': 1315.852, 'text': "There's just a few details to clear up.", 'start': 1314.232, 'duration': 1.62}, {'end': 1321.795, 'text': 'Earlier, I said that the proof of work might be to find a special number so that the hash of the block starts with 60 zeros.', 'start': 1316.332, 'duration': 5.463}], 'summary': "Blockchain's consensus mechanism relies on longer chains, requiring trust in multiple new blocks.", 'duration': 41.066, 'max_score': 1264.082, 'thumbnail': 'https://coursnap.oss-ap-southeast-1.aliyuncs.com/video-capture/bBC-nXj3Ng4/pics/bBC-nXj3Ng41264082.jpg'}, {'end': 1389.204, 'src': 'embed', 'start': 1361.974, 'weight': 0, 'content': [{'end': 1369.138, 'text': 'And if you look at the very first few blocks on the chain, they contain no transactions other than that 50 Bitcoin reward to the miner.', 'start': 1361.974, 'duration': 7.164}, {'end': 1376.3, 'text': 'But every 210, 000 blocks, which is about every four years, that reward gets cut in half.', 'start': 1369.938, 'duration': 6.362}, {'end': 1380.081, 'text': 'So right now, the reward is 12.5 Bitcoin per block.', 'start': 1376.84, 'duration': 3.241}, {'end': 1389.204, 'text': 'And because this reward decreases geometrically over time, it means there will never be more than 21 million Bitcoin in existence.', 'start': 1380.721, 'duration': 8.483}], 'summary': 'Bitcoin rewards halve every 210,000 blocks, currently 12.5 btc per block, capped at 21 million btc.', 'duration': 27.23, 'max_score': 1361.974, 'thumbnail': 'https://coursnap.oss-ap-southeast-1.aliyuncs.com/video-capture/bBC-nXj3Ng4/pics/bBC-nXj3Ng41361974.jpg'}, {'end': 1452.134, 'src': 'embed', 'start': 1404.672, 'weight': 1, 'content': [{'end': 1408.215, 'text': "that's going to go to the miner of whichever block includes that payment.", 'start': 1404.672, 'duration': 3.543}, {'end': 1415.864, 'text': 'The reason you might do that is to incentivize miners to actually include the transaction that you broadcast into the next block.', 'start': 1409.281, 'duration': 6.583}, {'end': 1425.069, 'text': 'You see, in Bitcoin, each block is limited to about 2, 400 transactions, which many critics argue is unnecessarily restrictive.', 'start': 1416.405, 'duration': 8.664}, {'end': 1433.673, 'text': "For comparison, Visa processes an average of about 1, 700 transactions per second, and they're capable of handling more than 24, 000 per second.", 'start': 1425.949, 'duration': 7.724}, {'end': 1441.407, 'text': 'This comparatively slow processing on Bitcoin makes for higher transaction fees,', 'start': 1436.303, 'duration': 5.104}, {'end': 1446.11, 'text': "since that's what determines which transactions miners choose to include in a new block.", 'start': 1441.407, 'duration': 4.703}, {'end': 1452.134, 'text': 'All of this is far from a comprehensive coverage of cryptocurrencies.', 'start': 1448.191, 'duration': 3.943}], 'summary': "Bitcoin's 2,400 transaction limit incentivizes miners, unlike visa's 24,000 per second capability.", 'duration': 47.462, 'max_score': 1404.672, 'thumbnail': 'https://coursnap.oss-ap-southeast-1.aliyuncs.com/video-capture/bBC-nXj3Ng4/pics/bBC-nXj3Ng41404672.jpg'}], 'start': 1183.635, 'title': 'Trustworthy payment systems and bitcoin protocol', 'summary': 'Discusses the trustworthiness of payment systems and the conditions for legitimate transactions, focusing on the probability of network fooling and the importance of waiting for multiple new blocks. it also explains the bitcoin protocol, including proof of work, block rewards, transaction fees, and the limited supply of 21 million bitcoin, to support informed decision-making in the cryptocurrency market.', 'chapters': [{'end': 1305.148, 'start': 1183.635, 'title': 'Trustworthy payment systems', 'summary': 'Explains the trustworthiness of the payment system and the conditions for legitimate transactions, with a focus on the probability of successfully fooling the network and the importance of waiting for multiple new blocks to validate a transaction.', 'duration': 121.513, 'highlights': ['The probability becomes overwhelming that the blockchain that all of the other miners are working on grows faster than the single fraudulent blockchain that Alice is feeding to Bob, unless she has close to 50% of the computing resources among all of the miners.', "Bob always trusts the longest chain that he knows about, so it's crucial to wait for several new blocks to be added on top of a new block before trusting it as part of the same chain that everyone else is using.", "To fool the network, Alice would have to find a valid proof of work before all of the other miners, and keep adding blocks on a special fork in Bob's blockchain while other miners are working on their own blocks."]}, {'end': 1499.536, 'start': 1305.848, 'title': 'Bitcoin protocol and cryptocurrency basics', 'summary': 'Explains the bitcoin protocol, including the proof of work, block rewards, transaction fees, and the limited supply of 21 million bitcoin, providing an understanding of the technology to support informed decision-making in the cryptocurrency market.', 'duration': 193.688, 'highlights': ['Bitcoin has a limited supply of 21 million, with the block rewards currently at 12.5 Bitcoin per block and a reduction in rewards every 210,000 blocks.', 'Transaction fees in Bitcoin are determined by the user and incentivize miners to include their transactions in the next block, leading to higher fees due to limited transaction capacity.', "Bitcoin's block processing is significantly slower than traditional payment systems like Visa, leading to higher transaction fees."]}], 'duration': 315.901, 'thumbnail': 'https://coursnap.oss-ap-southeast-1.aliyuncs.com/video-capture/bBC-nXj3Ng4/pics/bBC-nXj3Ng41183635.jpg', 'highlights': ['Bitcoin has a limited supply of 21 million, with block rewards currently at 12.5 Bitcoin per block.', 'Transaction fees in Bitcoin are determined by the user and incentivize miners to include their transactions in the next block.', 'The probability becomes overwhelming that the blockchain grows faster than the single fraudulent blockchain unless the attacker has close to 50% of the computing resources.', "It's crucial to wait for several new blocks to be added on top of a new block before trusting it as part of the same chain.", "Bitcoin's block processing is significantly slower than traditional payment systems like Visa, leading to higher transaction fees."]}], 'highlights': ['Bitcoin has a limited supply of 21 million, with block rewards currently at 12.5 Bitcoin per block. (Relevance: 5)', 'Cryptographic hash functions like SHA-256 produce unpredictable outputs for a given input. (Relevance: 4)', 'The backbone underlying cryptocurrencies is a clever system of decentralized trustless verification based on cryptography. (Relevance: 3)', 'The removal of connection between the ledger and physical US dollars allows for transactions to occur solely on the ledger without converting to real US dollars. (Relevance: 2)', "There's been a huge amount of attention and investment directed at cryptocurrencies. (Relevance: 1)"]}