Bitcoin

Bitcoin is a proof of work cryptocurrency.

This article covers some specific aspects of the Bitcoin protocol.

My Bitcoin Address is: 1HDp1gU3rgrRNKqrKorz8uWCpHUNdyGqXm

Overview

Bitcoin is a decentralized protocol that operates in an untrusted peer to peer environment while still being a reliable method to exchange credits (bitcoins) between people.

For detailed information, read the Bitcoin paper or one of the many sites out there.

Hashes & Encoding

Hash160 (Transactions)

Transaction numbers are represented using Hash160 of the public key. That is:

TransactionID = Hash160 = RIPEMD160(SHA256(PubKey))

It is outputted as a 160-bit value in hex (64 characters long). For example:

49123c475ef78814414f1318eff0a349bcbafd182d8b3e110684152ee0e44081

Hash

Hashes in Bitcoin are done using two rounds of SHA256.

Hash = SHA256(SHA256(X))

Base58Check

Base58Check is used to generate Bitcoin addresses.

Address / Keys

A Bitcoin address is a 160-bit hash of theh ECDSA public/private keypair.

Generating An Address

1. Take a 160-bit value as the private key.
2. Generate a public key with it
3. Hash = SHA256(PublicKey)
4. Hash160 = RIPEMD160(Hash)
5. BaseAddress = 0 + RIPEMD160(Hash160)
6. Check = SHA256(SHA256(BaseAddress))
7. FinalAddress = BaseAddress + (first 8 bytes of Check)
8. Address = Base58Check(FinalAddress)

See Also: https://en.bitcoin.it/wiki/Technical_background_of_version_1_Bitcoin_addresses

Brain Wallets

A brain wallet allows for the generation of the public/private key pair using a passphrase. It is accomplished by:

1. Converting a pass phrase into a private key
   • PrivateKey = SHA256(PassPhrase)
2. Generate a public key using the private key
   • PublicKey = privateToPublic(PrivateKey)
3. Generate the bitcoin address
   • Hash = SHA256(PublicKey)
   • Hash160 = RIPEMD160(Hash) (used by transactions)
   • Address = Base58Check(Hash160)

The publickey can either be uncompressed or compressed. A compressed public key is simply a truncated key where the missing parts can be recomputed.