Mastering Bitcoin · 2nd Edition by Antonopoulos, Andreas M. -- Read -- Imperial Library of Trantor

Index

Preface

Writing the Bitcoin Book Intended Audience Why Are There Bugs on the Cover? Conventions Used in This Book Code Examples Using Code Examples Bitcoin Addresses and Transactions in This Book O’Reilly Safari How to Contact Us Contacting the Author Acknowledgments

Early Release Draft (GitHub Contributions)

1. Introduction

What Is Bitcoin? History of Bitcoin Bitcoin Uses, Users, and Their Stories Getting Started

Choosing a Bitcoin Wallet Quick Start Getting Your First Bitcoin Finding the Current Price of Bitcoin Sending and Receiving Bitcoin

2. How Bitcoin Works

Transactions, Blocks, Mining, and the Blockchain

Bitcoin Overview Buying a Cup of Coffee

Bitcoin Transactions

Transaction Inputs and Outputs Transaction Chains Making Change Common Transaction Forms

Constructing a Transaction

Getting the Right Inputs Creating the Outputs Adding the Transaction to the Ledger

Transmitting the transaction How it propagates Bob’s view

Bitcoin Mining Mining Transactions in Blocks Spending the Transaction

3. Bitcoin Core: The Reference Implementation

Bitcoin Development Environment Compiling Bitcoin Core from the Source Code

Selecting a Bitcoin Core Release Configuring the Bitcoin Core Build Building the Bitcoin Core Executables

Running a Bitcoin Core Node

Running Bitcoin Core for the First Time Configuring the Bitcoin Core Node

Bitcoin Core Application Programming Interface (API)

Getting Information on the Bitcoin Core Client Status Exploring and Decoding Transactions Exploring Blocks Using Bitcoin Core’s Programmatic Interface

Alternative Clients, Libraries, and Toolkits

C/C++ JavaScript Java Python Ruby Go Rust C# Objective-C

4. Keys, Addresses

Introduction

Public Key Cryptography and Cryptocurrency Private and Public Keys Private Keys

Generating a private key from a random number

Public Keys Elliptic Curve Cryptography Explained Generating a Public Key

Bitcoin Addresses

Base58 and Base58Check Encoding Key Formats

Private key formats Decode from Base58Check Encode from hex to Base58Check Encode from hex (compressed key) to Base58Check Public key formats Compressed public keys Compressed private keys

Implementing Keys and Addresses in Python Advanced Keys and Addresses

Encrypted Private Keys (BIP-38) Pay-to-Script Hash (P2SH) and Multisig Addresses

Multisignature addresses and P2SH

Vanity Addresses

Generating vanity addresses Vanity address security

Paper Wallets

5. Wallets

Wallet Technology Overview

Nondeterministic (Random) Wallets Deterministic (Seeded) Wallets HD Wallets (BIP-32/BIP-44) Seeds and Mnemonic Codes (BIP-39) Wallet Best Practices Using a Bitcoin Wallet

Wallet Technology Details

Mnemonic Code Words (BIP-39)

Generating mnemonic words From mnemonic to seed Optional passphrase in BIP-39 Working with mnemonic codes

Creating an HD Wallet from the Seed

Private child key derivation Using derived child keys Extended keys Public child key derivation

Using an Extended Public Key on a Web Store

Hardened child key derivation Index numbers for normal and hardened derivation HD wallet key identifier (path) Navigating the HD wallet tree structure

6. Transactions

Introduction Transactions in Detail

Transactions—Behind the Scenes

Transaction Outputs and Inputs

Transaction Outputs

Transaction serialization—outputs

Transaction Inputs

Transaction serialization—inputs

Transaction Fees Adding Fees to Transactions

Transaction Scripts and Script Language

Turing Incompleteness Stateless Verification Script Construction (Lock + Unlock)

The script execution stack A simple script Separate execution of unlocking and locking scripts

Pay-to-Public-Key-Hash (P2PKH)

Digital Signatures (ECDSA)

How Digital Signatures Work

Creating a digital signature Serialization of signatures (DER)

Verifying the Signature Signature Hash Types (SIGHASH) ECDSA Math The Importance of Randomness in Signatures

Bitcoin Addresses, Balances, and Other Abstractions

7. Advanced Transactions and Scripting

Introduction Multisignature

A bug in CHECKMULTISIG execution

Pay-to-Script-Hash (P2SH)

P2SH Addresses Benefits of P2SH Redeem Script and Validation

Data Recording Output (RETURN) Timelocks

Transaction Locktime (nLocktime)

Transaction locktime limitations

Check Lock Time Verify (CLTV) Relative Timelocks Relative Timelocks with nSequence

Original meaning of nSequence nSequence as a consensus-enforced relative timelock

Relative Timelocks with CSV Median-Time-Past Timelock Defense Against Fee Sniping

Scripts with Flow Control (Conditional Clauses)

Conditional Clauses with VERIFY Opcodes Using Flow Control in Scripts

Complex Script Example

8. The Bitcoin Network

Peer-to-Peer Network Architecture Node Types and Roles The Extended Bitcoin Network Bitcoin Relay Networks Network Discovery Full Nodes Exchanging “Inventory” Simplified Payment Verification (SPV) Nodes Bloom Filters

How Bloom Filters Work

How SPV Nodes Use Bloom Filters SPV Nodes and Privacy Encrypted and Authenticated Connections

Tor Transport Peer-to-Peer Authentication and Encryption

Transaction Pools

9. The Blockchain

Introduction Structure of a Block Block Header Block Identifiers: Block Header Hash and Block Height The Genesis Block Linking Blocks in the Blockchain Merkle Trees Merkle Trees and Simplified Payment Verification (SPV) Bitcoin’s Test Blockchains

Testnet—Bitcoin’s Testing Playground

Using testnet

Segnet—The Segregated Witness Testnet Regtest—The Local Blockchain

Using Test Blockchains for Development

10. Mining and Consensus

Introduction

Bitcoin Economics and Currency Creation

Decentralized Consensus Independent Verification of Transactions Mining Nodes Aggregating Transactions into Blocks

The Coinbase Transaction Coinbase Reward and Fees Structure of the Coinbase Transaction Coinbase Data

Constructing the Block Header Mining the Block

Proof-of-Work Algorithm Target Representation Retargeting to Adjust Difficulty

Successfully Mining the Block Validating a New Block Assembling and Selecting Chains of Blocks

Blockchain Forks

Mining and the Hashing Race

The Extra Nonce Solution Mining Pools

Managed pools Peer-to-peer mining pool (P2Pool)

Consensus Attacks Changing the Consensus Rules

Hard Forks Hard Forks: Software, Network, Mining, and Chain Diverging Miners and Difficulty Contentious Hard Forks Soft Forks

Soft forks redefining NOP opcodes Other ways to soft fork upgrade

Criticisms of Soft Forks

Soft Fork Signaling with Block Version

BIP-34 Signaling and Activation BIP-9 Signaling and Activation

Consensus Software Development

11. Bitcoin Security

Security Principles

Developing Bitcoin Systems Securely The Root of Trust

User Security Best Practices

Physical Bitcoin Storage Hardware Wallets Balancing Risk Diversifying Risk Multisig and Governance Survivability

Conclusion

12. Blockchain Applications

Introduction Building Blocks (Primitives) Applications from Building Blocks Colored Coins

Using Colored Coins Issuing Colored Coins Colored Coins Transactions

Counterparty Payment Channels and State Channels

State Channels—Basic Concepts and Terminology Simple Payment Channel Example Making Trustless Channels Asymmetric Revocable Commitments Hash Time Lock Contracts (HTLC)

Routed Payment Channels (Lightning Network)

Basic Lightning Network Example Lightning Network Transport and Routing Lightning Network Benefits

Conclusion

A. The Bitcoin Whitepaper by Satoshi Nakamoto

Bitcoin - A Peer-to-Peer Electronic Cash System

Introduction Transactions Timestamp Server Proof-of-Work Network Incentive Reclaiming Disk Space Simplified Payment Verification Combining and Splitting Value Privacy Calculations Conclusion References

License

B. Transaction Script Language Operators, Constants, and Symbols C. Bitcoin Improvement Proposals D. Segregated Witness

Why Segregated Witness? How Segregated Witness Works Soft Fork (Backward Compatibility) Segregated Witness Output and Transaction Examples

Pay-to-Witness-Public-Key-Hash (P2WPKH) Wallet construction of P2WPKH Pay-to-Witness-Script-Hash (P2WSH) Differentiating between P2WPKH and P2WSH

Upgrading to Segregated Witness

Embedding Segregated Witness inside P2SH Pay-to-Witness-Public-Key-Hash inside Pay-to-Script-Hash Pay-to-Witness-Script-Hash inside Pay-to-Script-Hash Segregated Witness addresses Transaction identifiers

Segregated Witness’ New Signing Algorithm Economic Incentives for Segregated Witness

E. Bitcore

Bitcore’s Feature List Bitcore Library Examples

Prerequisities Wallet Examples using bitcore-lib

F. pycoin, ku, and tx

Key Utility (KU)

Transaction Utility (TX)

G. Bitcoin Explorer (bx) Commands

Examples of bx Command Use

Index

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