How Bitcoin Works Under the Hood

A somewhat technical explanation of how Bitcoin works. Want more? Check out my new in-depth course on the latest in Bitcoin, Blockchain, and a survey of the most exciting projects coming out (Ethereum, etc): app.pluralsight.com/library/c...
Lots of demos on how to buy, send, store (hardware, paper wallet). how to use javascript to send bitcoin. How to create Ethereum Smart Contract, much more.
If you'd like to support the creation of additional content, here's a bitcoin/lightning donation address: bit.ly/2NldSYA
fiat support: / curiousinventor
Shorter 5 min introduction: • The Essence of How Bit...
Written version: www.imponderablethings.com/201...
Arabic translation by Ahmad Alloush
Spanish caption translation by Borja Rodrigo, [e-mail], DFJWgXdBCoQqo4noF4fyVhVp8R6V62XdJx
Russian caption translation by Alexandra Miklyukova
Italian voice over: • Come Funzionano i Bitcoin
Italian captions translated by Simone Falcini, 1H5KdCnBooxfqpXtyQBBAKKRU7MkCZCVCe

[@cyrusadkisson6864]

0:10 overview, 1:38 sending money, 3:45 txns and ledger detail, 6:19 complex txns, 7:40 anonymity, 9:20 txn security, 10:50 ordering of txns, 11:02 blockchain, 12:10 crypto hash, 13:37 end of chain insecurity, 14:05 double spend attacks, 16:00 why double spend is hard to pull off, 17:45 mining, 18:30 txn fees, 19:00 mining pools, 21:11 recap

[@CuriousInventor]

hello "free" bitcoin spammers: I am moderating comments, so why don't we save each other some time? Speaking of saving time, here's a 5 min summary version: kzbin.info/www/bejne/qmateISOeLmYacU

[@mridularul1]

you're the first person to have explained such a complex system in such a simple way .. thankyou for this vid !

[@Ocenteno70]

yeeeeeah......I'm gonna have to watch this again.

[@JanBruunAndersen]

Thank you, thank you, thank you! Finally an explanation of how Bitcoin works that makes sense for paranoid programmer like me. No hand-waving, no vague references to wallets and apps and exchanges. Just the facts with enough detail to make sense, and without drowning in mathematical details.

[@Mellbourn]

Interesting

[@patrik5123]

Would the successful invention of quantum computing become problematic to bitcoin security?

[@SebastiaanvanderHeide]

Thanks for uploading this, I've been watching quite a bit about Bitcoin and this is the most in depth video I've found yet. Must have taken quite a bit of research to get all of this figured out.

[@CuriousInventor]

months and months :) glad it helped.

[@AppliedScience]

Thank you! This is the clearest, most complete overview of how Bitcoin works that I've ever seen. Nice work, indeed!

[@EvilSpeculator]

That was brilliant and in little over 20 minutes answered a ton of questions I couldn't find an answer for in weeks of reading BC related articles/tutorials. Thanks so much for putting this together!

[@Pedro-un3mk]

Awesome video-lecture! Even after 8 years, for me, at least, is pure gold still! To be able to brilliantly summarize the complexity of the subject in 20 minutes, certainly required some 20 x 10^3 minutes of dedication and love to the matter. Thank you for sharing this masterpiece! Warmest Regards

[@relcluse]

Next time: how Bitcoin works IN the Hood

[@LeakyWicks]

So much packed in 20 minutes yet so well explained. Nicely done.

[@fernandosecchi9716]

Great video. I've been around bitcoin for a long time. took several courses and nothing have been more revealing than this tutorial. Probably I have a background already to fully understand it. Any way, sooner or later this video is a must in the comprehension of bitcoin. My sincere gratitude.

[@AllanAquinoVieira]

Thank you for the video, great simplified explanation of several very complex complex subjects involved in Bitcoin. It made my life so much easier in explaining the workings of BTC to my non technological inclined friends, and family.

[@Viemexis]

Best explanation of bitcoin I have yet seen. Explanations either tend to be extremely simplistic (which was nice as an introduction) or extremely long and rambling explanations of cryptography.

[@matthew9677]

This video is amazing. It answered so many of questions and provides a understandable yet in depth explain of bitcoin. Thank you for this awesome video.

[@iSuperGeek]

Simply the best educational video. I've been referring my friends to this video when they ask what Bitcoins are.

[@walktothebeach]

Outstanding. So concise. Rapidly presented and without flaws or vocal pauses (the "ums","ahs", and "ers"). Just great.

[@lucasashbaugh7818]

This was an awesome explanation, you did an excellent job taking my understanding from beginner to intermediate. Thanks!

amazing video. very descriptive. The other several videos i saw , gave me more questions , while all answering same questions . Thank you

[@nicolastaub4593]

As Dan Kaminsky once said: "The first time you think you understand it, you don't". I felt exactly the same way, but after following your explanations for a few time, I finally got the principle idea.. :) Thanks for the good explanation! ;)

[@mfricke1947]

This is a brilliant exposition-accurate and brief with not a word wasted. Congratulations (and thanks).

[@Dushku]

Thank you very much for taking the time to explain this. Plus, you did it in a very straightforward, yet understandable way. Back when I first considered getting into BTC, they were worth about $33. I had numerous reasons for "erring on the side of safety" and part of it was a simple lack of understanding of how it could be safe and anonymous.

[@NoamHalpert]

quality video.. your detail and patience in explaining is tremendous .. its not something many people have

[@ciao716]

i'm writing an essay, for my finals, on bitcoin, finally a good resource where all information are gathered, simply, and summarized efficiently :)

[@DoubleBob]

One video. Instant subscribed. Awesome. I love the love for detail and the cool examples.

[@tikkj]

Extremely useful and informative, thank you :). Now I finally know wtf blockchain technology is and how it can apply to areas outside of bitcoin.

[@ViceroyoftheDiptera]

This was excellent. Clearest no-nonsense explanation I've seen.

[@buschtoens]

Absolutely great and reasonably detailed introduction to Bitcoins. Well done!

[@LibertySpeak]

This is just what I have been looking for, I'm finally wrapping my head around the blockchain. Thanks so much! :)

[@UsaqMadiq]

The best explanation I have come across after much searching...Thanks!

[@hansgoed2]

Great explanation! Bitcoins have been keeping me busy for quite some time now, but I never really understood how they worked under the hood. Thank you very much!

[@frankkyne8945]

This is by far THE best explanation of how blockchain and bitcoin work. Thank you!

[@CuriousInventor]

thanks! LOTS of editing and rewriting went into whittling it down to be as concise as possible.

[@dsloan4242]

This is a great video in regards to bitcoin, He provides a through explanation alongside a good presentation. It's worth watching the full version, but if you are short on time and need the quickie, the summary starts around 21:15.

[@FakeButt]

Thank you very much! I watched several videos that failed to explain the concept but yours was exceptionally informational and moderately easy to follow and understand. I may re-watch it later to learn more :)

[@ryanwdavies1]

Thank you for producing such an excellent summary.

[@chopcooey]

omg this system is so intelligent and also great explanation; mind = blown

[@JohnS-mq2mu]

Thank you. That was some brilliant and dedicated work putting this video together.

[@davidczu]

Fantastic explanation. Very clear and quite concise. Now it's time to head to the math books to go deeper. Thank you very much!

[@TheCrazyInventor]

Very clear explanation, thank you. I'll need to watch it a few more times before I understand how the block chain works, though. Some very complex stuff going on here.

[@TomGeller]

Excellently done! You cleared up some things I wasn't sure of. Thank you. Sending a small tip.

[@aatheus]

Great explanation of the BitCoin system! I had wondered how the transactions actually got bundled up into blocks, and so on.

[@wenwei-li2668]

Very clear. By the first part of the video, I understand two points about Bitcoin: a. how one transanction is confirmed; b. how one person is trusted to own enough bitcoins for payment; It is a pity that I have no enought time to watch the whole video.Hope I can finish it later.

[@bradr-86]

Best explanation of the system ever. You've done well!

[@Kei3th1424]

wow.. so many IT terms i didn't understand but somehow i sat watching the whole 22.25 minute. A very good video. Congratulations CuriousInventor. you may have my Like. and a subscriber.

[@vandresv]

Thank you very much. From 0 to a pretty good idea of the whole thing. Great video!

[@moonstriker7350]

Hi, thanks for the very informative video, and I'v got couple of questions if you don't mind: - Doesn't this mean, that transaction logs keep piling and piling up, which can cause problems as more and more people use it more and more often? Can't the logs expand to an (almost) unmanageable size (andor complexity)? - I might be fundamentally wrong here, but from what I gathered, the operations on the logs (which are formulas for the accounts' worth, right?) are done by people who are rewarded by a number of 'fresh' bitcoins (who often invest in specialized hardware). Since bitcoins are finite, what if there are almost no more to give? Would that mean some kind of rise in the cost of processing transactions? - I actually asked the one above before I watched through to the end, and I see it was adressed in the vid. :) I'll leave it there, for a related question: Lets say bitcoin becomes an integral and large part of the forex market (or anything similar) where there is a huge all-in race for anything that can give you some advantage over others. That's how HFT came about. Could that create an escalation feeding into itself, in lets say, transaction fees, based on what you describe: that the ones with fees (or larger fees?) get processed sooner? Thanks!

[@ShadowJaPa]

Thanks Bro! I'm not well versed in computing so It'd be impossible to fully understand bitcoin. BUT you gave me a hell of a big picture!

[@RandomBro5]

Thank you so much! :D I'm working on a project for school about Bitcoin, and your video's have been very helpful!

[@LukasFrimerTholander]

This was so good, and very good explained. Keep up the good work

[@imstillw8ing]

This went way over my head. But I kept listening anyways.

[@mfratto]

Very nice explanation. I'm referencing this video and your blog post as required reading for my class. Thanks.

[@lleuk]

This is a fantastic explanation of what Bitcoin is, and how it works.

[@jedharrisonmoore]

Thank you very much! I will share this with everyone I know interested in bitcoin. To me at least, it was extremely well explained!

[@fredericksetjadiningrat9517]

Excellence video. I gained an insight of the matter. Thanks!

[@GuilhermeFurst]

My brain hurts, but it is indeed explicative ;)

[@rafacassau]

That's the best technical explanation I ever seen, thank you so much!

[@NickGore]

I'm still confused but more informed than before lol Thank you for the great, detailed break down!

[@CuriousInventor]

Sure, I'll work on that. Until then, the complete text is on the blog link in the description.

[@gdhorning166]

Very helpful and thorough enough for a serious beginner to understand what is going on.

[@brianb2644]

This is the first video I have watched that helped me actually understand what bitcoin is completely. Extremely helpful. Thank you so much.

[@marcostviera]

I have to say that this video is a very amazing piece of wide explanation. There is a few information for begginers that expose the bitcoin system as found in this video.

[@henryp7416]

BEST bit coin tutorial EVER! Well done and perfectly explained. Thank you

[@dragonmining7004]

Fantastic work! Dragon Mining recognizes this as a useful and informative video. 20 minutes worth watching if you're looking for an easy to understand technical explanation of how Bitcoin works.

[@FaraazSulaiman]

Thank you for your explanation. Very clear and easy to understand :)

[@LolFishFail]

I'm extremely new to bitcoins and this pretty much answered my security questions. In reality, it looks like bitcoins are more secure than any other form of transaction, which is pretty neat.

[@Hoophy]

great video. very informative and you explain this very well to a noob like me with no background in programming and has trouble counting to 10

[@winterbreeze23]

Thanks for the great video! I was a bit lost in the blocks chain part, but I gained much more understanding in general! Does everyone who uses bitcoins understand the concepts? While there is no centralised regulation, there has to be a core group that is in charge of the entire system right? Does bitcoin still stand to appreciate in near future?

[@TheChangingWays]

An excellent explanation of how Bitcoin works. Definitely worth watching.

[@thefarmer4586]

Thank you sir, it's the best most detailed video I've seen about this new world. thanks again. I appreciate your efforts.

[@CuriousInventor]

That's more of a whole series of videos :) The elliptic curve version is a harder-to-understand flavor of RSA cryptography (ie, start there). Elliptic curve version gets away with smaller keys than RSA for same security. In both, public and private keys are generated at the same time. Both are based on math that's easier to do one way than the other. ex: multiplying is easier than factoring. good luck! I do NOT understand either fully.

[@FurryMurry7]

Thank you for this video! I've been trying to learn what bitcoin is for ever but it was always too difficult to understand. Your video makes it SUPER EASY to understand how bitcoin works!!! Thank you soo much! I love you!!!! :D

[@FreshThreadShop]

Great video, exactly what I have been looking for! Appreciate your time making this!

[@todddonaldson7974]

Thank you! That was the best explanation I have seen yet!

[@Purlox]

I think this video is great at explaining Bitcoin and how cryptocurencies work in general (although they have differences from Bitcoin, so not everything has to apply), but I think the video missed one thing: What happens when all blocks are mined out? In Bitcoin there is only limited amount blocks to be mined out and transactions are tied to blocks, but what will happen when blocks no longer generate anything for their miners? We can speculate on how people react to that, but I am more interested about what (if anything) will change on the transactions and blocks when no coins can be mined out of them. Will the only way to gain money from having a miner up be from transactional fees and how is it decided who gets the money from the fees?

[@aratin8]

Thanks for this good video. Its a shame too many people are so ignorant they think its a ponzi scheme.

[@markralev]

Actually one of the best bitcoin movies I've watched. Thank you for explaining this sh*t for me :)

[@aplacefaraway]

this is the best explanation I've found on youtube

[@DAHstra]

re: Dan - Thanks for this video, it WAS great! I feel I have good overall concept of bitcoin, while not understanding the math.

[@bhavikmerchant920]

superb, clear presentation of a complex phenomena. Thanks a lot!

[@alexmcc89]

This is an awesome video about Bitcoins, thank you for making this! I finally have something to point to when trying to explain it to people in more detail!!

[@leathan7]

Right on, i get it in my head crystal clear and study cryptography but i cant explain it like this guy. Hes a guru.

[@globalbotboy]

Thank You for the Informative Video. This video is the best explanatory general overview of Bitcoin cryptocurrency that I have seen.

[@dinnae]

Great explanation. Thanks for your hard work!

[@SINC0MENTARI0S]

Nice intro. Thank you for the explanation.

[@HiAdrian]

This presentation explains it really well, thanks!

[@rGGdom]

Excellent video, thanks for the info.

[@Maknopono]

Profile Paper on Bitcoin. Sub Question 1 is just a typed version of this video. Thanks for the information!!!

[@ReinisLusis]

Hey! Thank you! This is best video and goes into great detail. Good job! :)

[@danieljen5672]

Great video. Thanks so much for putting this together. Best explanation I've found to date.

[@Seb-de]

Thanks to your video, I finally understood Bitcoins in detail. Very good video.

[@ShamelessHorse]

Great video! Thanks, I'm starting to understand how this works now. Cryptography and hashing are a mystery to me so you may as well have said, "...and then some magic happens to make everything safe...", but I get the principle, and using randomization is genius making it harder to commit fraud by literally making it less likely. I have adblock on so I feel I owe you a few bitcoins when I get my wallet set up. (Well not whole bitcoins, I know enough to know that's a lot!)

[@Cruelcoil]

You're very good at explaining this kind of stuff, can you please try to explain how i can calculate a public key from a private key? I've read that it has something to do with elliptic curves and that the public key is a coordinate

[@adriancardona9184]

messages won't affect ledgers if the message is sent by the receiver of the money right?

[@ffwang0306]

simply put--an excellent piece of work!

[@codediporpal]

Wow, nicely done. This answered a lot of questions that had been bugging me.

[@masterbjohnson2]

Quality Video. Very helpful for explaining the maths.

[@samuelfeder9764]

Thanks for having made this video! I found it highly informative and very well presented! =D

[@JaySmith-wk8yq]

Amazing description, good job.

[@srvelectronics]

Brilliant Work , Thanks for sharing this information.