4. Blockchain Basics & Consensus

[@jonathanvance8027]

Conclusion from watching this: 1)the students are inaudible either because of foreign accent or volume&background ruffling 2)Gary has all the answers to any question and they will be discussed thoroughly on the ever looming Thursday 3)compression of data & hash are king No really this is an amazing seminar..highly recommend watching all of his lectures. This tech is the future and we must get familiar with the fundamentals to understand why.

[@kevinshimota]

good little notes before I listen, thanks Jonathan! I'll now be able to just skip 5 second segments when the students talk

[@pepitoclavo1clavito610]

B.s. u dont need to understand email to use email dummie!

[@dongshengzhang4105]

Those students are pretty ignorant, not for the specific tech knowledge, and not good speakers. The lectures are very good!!!

[@icedemolisher95]

The actual lecture starts at 24:05, if you want to skip the class discussion and recap.

[@nicolas.martiiin]

thank you!

[@sumeetweb]

Thanks 👍

[@bahaabadri8995]

😂😂🤣

[@jmcdonne]

Not all heroes wear capes.

[@DrZbo]

Shit, I'm reading this 22 minutes in 🤣

[@Web3Coders]

These free courses from MIT are always great! One thing we tell our blockchain developer students is to spend time on coding with Solidity, Rust, etc and the concepts will be much easier to grasp.

[@Nick_Chanas]

This guy will be the next head if the SEC :O

[@SportsIncorporated]

good call. I like the directions for new employees. "you’ll see PRET and Au Bon Pain on the corner. Make a left in between both, passing the Auntie Annie’s and keep straight towards McDonald’s. Once you get to McDonald’s, make a left" (These are all restaurants. Auntie Annie’s is pretzels I think.)

[@quantumuniversetvinc.6117]

@@SportsIncorporated wtf r u saying

[@SportsIncorporated]

@@quantumuniversetvinc.6117 I just get a kick out of the directions on I guess the SEC's website. They're talking about walking inside Union Station in Washington, D.C.

[@quantumuniversetvinc.6117]

@@SportsIncorporated oh lol

[@jay6ix705]

actually happened in Apr 2021 lol

[@Garce227]

🙏 So lucky to be able to follow an elite programme.I shall have to rewatch it many times in order to absorb this subject .

[@Elless33]

Thank you Prof, Gensier for tackling this emerging phenomenon. You have a great rapport with your students.

[@cauebraga]

That's true. He's a nice professor example to be followed

[@mirko1989]

gas is a separate thing from the smallest amount of eth , wei is the smallest amount , gas is what you pay transactions with , and it's cost is variable in wei, gas is invented to separate price of eth from cost of transactions , to insert a modifiable/variable layer , it could've easily be wei but gas is a good idea/solution , price of gas depends of usage/no. of transactions , wei/eth price depends on markets

[@primalex26]

Many thanks to MIT for sharing this! This is an excellent informative and nicely put MOOC course!

[@algoriticus]

Had a fun time following this one. Did less rewinds than the previous lecture. Got it done faster understood 90% at depth. Woo!

[@webuser5950]

Gary "We'll talk about it on Thursday" Gensler

[@gujabber2582]

"We have discussed it in earlier time"

[@joeljose182]

Which Thursday? Gray: "Well...Every week has Thursday"

[@cryptoberto8077]

@@joeljose182 how is this guy this calm when he knew exactly the power of bitcoin. I would be buying like a mofo

[@cryptoberto8077]

@@joeljose182 apart from teaching the younger generations

[@JamesBedford]

@@cryptoberto8077 Ever seen poker players?

[@majormackenzie834]

So much knowledge and so much power, however he is so calm

[@febafu]

Do not know how Blockchain centered vs BTC centered this is. Whatever it is a fantastic resource to have, more now he is Mr. SEC!

[@venividi2940]

I really love Gary's teaching style and when he's on a subject he knows well, he's truly amazing. Having said that, he does tend to get some little things wrong when answering questions about the mathematics/computer science topics. I don't think it makes much of a dent in the incredible value he's delivering with this course, but it's worth noting that one should take his answers on the aforementioned topics with some grains of salt.

[@kindimage]

What did he get wrong? Not being sarcastic I’m actually curious

[@andso7068]

For instance? Are you referring to remarks on the hash rate?

[@cryptomart5007]

That guy in the purple T shirt at the front 😂 he wished he was anywhere else in the world than sat in the front of that class. He couldn’t wait to get out, check him out at the end! 😂😂

[@ytubebrianahlers]

I noticed that guy too 😁 I'm not sure how he got into MIT, but there's a good chance it's a massive endowment

[@popedhop]

Im the new SEC chair

[@Stopinvadingmyhardware]

@@popedhop No you’re not

[@antoinejutras-carignan8710]

1:01:50 By 2032, over 99% of bitcoin will have been mined and it is estimated to take up until 2140 until 100% of the total bitcoin is mined.

[@chiragpatel849]

we could 10m coin by then

[@cleansebob1]

Sounds a little asymptotic...

[@tradelinx1377]

Thanks to the good people at MIT for opening up their university to the world!

[@cryptodove982]

Hey can we

[@nlarchive]

You are the best MIT, always finding useful topics with great teachers to learn, proud to see how education is becoming open-source, society will have a better education and in the future, this will lead to faster development and world consensus

[@tobyforstater7046]

Congrats to everyone who has been committed thus far. Hope you keep going!

[@jonathankrimer]

Still glad? You are down 95 percent.

[@JeremyFisher]

Indian guy talking about something Captions: *inaudible*

[@Andre_Villon]

Yo for real! That accent is brutal!

[@SueFerreira75]

@@Andre_Villon So happy your Hindi accent is perfect, when you are answering questions ar an Indian University.

[@umm_iter]

Wow !! Hats off to Prof. Gary Gensler !!!

[@lisamteagamer8844]

My man at 41:00 coming in clutch had the same question or a similar one first time I wasn't annoyed by the amount of question cause this man saved my life

[@CSWG-d9e]

Thank you MIT & prof. Gary Gensler.

[@alexalston3240]

he literally says he just learned the technical stuff. you nerds aren't cool for pointing out he's wrong about some of the details. talking for hours twice a week and saying nothing incorrect is hard. you ever teach all this technical prowess you show off on yt?

[@Elless33]

I think he does a great job. You can tell he understands finance and is a bright academic. This is unchartered territory and I appreciate these lectures being made public.

[@imatardable]

Very true.

[@FacuSabo22]

Also i think this lectures are a couple of years old. It is easy to judge the information now since there s so much more data available involving crypto.

[@Mondegreen2020]

It's easy to criticise. It's fun too.

[@j.c.harrisassetmanagement7939]

@@Mondegreen2020 super fun until it's done to you

[@filipd2104]

It's really interesting to hear his insight on Ripple

[@garettcameron1271]

Throw in a time stamp when referencing specifics, the internet will infinitely appreciate it!

[@filipd2104]

@@garettcameron1271 1:14:39 Enjoy.

[@mezzmarr1209]

Ripple is a centralized database.

[@jackiekuang7999]

Marked. Milestone for reaching this far. :)

[@demonhanzohattori]

No this is an unlikely gem for the average person.

[@pamthumbela562]

Finally starting to understand blockchain and cryptocurrencies. Such an insightful and engaging lecture.

[@mezzmarr1209]

Regarding sequestering part of the internet as a forced fork, we do have at least two mining rigs in satellites, potentially reducing terrestrial threats of this nature.

[@julkiewitz]

I don't think that does anything really. One mining rig in a satellite is just as insignificant as one mining rig anywhere. Only thing that matters is the number of participants in each fork and also the social consensus surrounding it.

[@Dolebyte]

I really like this guy, he's dry.

[@mounteverest284]

Wish i was on that class.

[@quantumuniversetvinc.6117]

u can literally take the whole class here on KZbin. i'm taking it

[@tukays1896]

What difference would that make? You are in the class already and also have the privilege of having a cup of tea while in the class

[@dannyliu6389]

If one transaction was intended to be on the Bitcoin chain, but happened to be on the “hard forked” Bitcoin Cash chain, what would happen?

[@michaellong2384]

That question is asked and answered. Watch again.

[@aliharis9293]

36:50 your answer

[@IsaOscar]

What an amazing professor! Thank you Professor Gensler for such engaging lectures!

[@petergryllis5109]

Great lectures and it's actually made me look into the MIT SLOAN program. Great initiative MIT!

[@marleyzlegacy9208]

this is awesome, please keep releasing more!

[@gmcenroe]

All important lectures are last Thursday or next Thursday! lol

[@bnewton3067]

That's how lectures work at university. You should attend.

[@karlschmidt9738]

Your Bitcoin address is actually your public key. You use your private key to sign signatures for transactions. The public key is the "address" where your Bitcoin is stored in the network.

[@user-wl5mc6lj6o]

38:14 - Bitcoin, Etherium, "XRP"! For each Blockchain there's a "NATIVE CURRENCY"! - Gary Gensler "XRP IS A CURRENCY NOT A SECURITY"! BOOM! 🤯 END THE LAWSUIT AGAINST RIPPLE!

[@CH-bp3bj]

Would it be possible for someone to put the reading and video links in the description?

[@mr.savvysilver7312]

57:57 Energy Web Chain🙌🏽

[@mariomenjr]

First 24 minutes are a review from previous lecture, in case you guys want to skip them.

[@rschmidtzalles]

Thanks brother.

[@luvpreetsingh8020]

So, in a hard fork like Bitcoin Cash, the initial(black) blocks will be in bitcoin native currency and later(purple) blocks will be in bitcoin cash native currency? I mean, in bitcoin cash chain what is the first block? the first purple block or the first bitcoin(genesis) block?

[@cauebraga]

37:20 Thats a intersting situation to pay attention to! In the future, governments give up going agaist bitcoin and each country decides to hard fork the chain and have its own currency. We would have the China bitcoin, American bitcoin, Europe bitcoin, ...

[@tomberduciel69]

2140 ! not 2040 ! Capping at 21 million BTC in 2140.

[@quantumuniversetvinc.6117]

he made that mistake in another lecture too. he keeps saying 2040

[@Bypureluck]

1:06:16 just his thoughts on digital currency not having a central authority

[@bobbyb7708]

Guy in pink striped shirt must’ve been hungover/no sleep, struggled to pay attention and immediately stood up to leave once he knew the session was over.

[@nickiwoa7948]

😂😂😂

[@danecaldwell9470]

Too bad the questions were not saved for a separate class. This particular class was less lecture more Q&A. The questions detract from the lesson for myself.

[@rudolphbn1192]

Daniel is asking the right questions!

[@ighsight]

Just what I was looking for.

[@kylecourville9587]

At 1:01 maybe this has been addressed but bitcoin is not projected to be all mined until 2140

[@shaunbyrne3227]

Even if it was not deflationary, it would for sure create harsh boom and busts. The only way for the economy to grow would be private debt.

[@crazyweb953]

Please explain elliptical curve multiplication 🥺

[@momobhai3792]

Read "Programming Bitcoin" by O'reilly publications Chapter 2 & 3. Free pdf on the internet

[@antoinejutras-carignan8710]

23:38 How to not use the same public key twice? If i have 5 btc on my bitcoin adresse 1234. I send 1btc from my adresse 1234 to a friend. Then how I am suppose to use the remaining 4 on 1234?

[@Blackspidy619]

You have one master private key (wallet) from which you can derive several private keys. Each private key generates one public key (address) that you have control over. So what some wallets do is that when you spend bitcoin, it generates a new address. So then your transaction will say "Send 1 bitcoin to [friends address] and 4 bitcoin to [your new address], from address 1234, signed by private key of 1234". When the signature is verified, your friend will get 1 bitcoin and you will get 3.99999 bitcoin (remember, there is a transaction fee).

[@nelfish1234]

he says it wrong, its only the public key, not private key for recieving that should not be used twice. that public key automatically refreshes after you recieve coins to your last public adress (atleast with trezor wallet ui)

[@antoinejutras-carignan8710]

@@Blackspidy619 ohhh wow thank you! very clear! I am at class 6 now, I start to understand better.

[@KafshakTashtak]

What I don't understand is that the more miners on the network, the higher difficulty of mining (he showed the graph). but the rate of generation of blocks doesn't change (1 block roughly every 10 minutes). So that means no matter how much we increase the number of mining rigs, two things don't change, 1- transaction throughput of the blockchain (~1500 transactions every hours), and 2 - the rate of generating bitcoins (before halving periods).. This basically means that mining has become a competition in which you just try to have a bigger slice of the pizza (the mining pools chart he showed) to have a bigger chance at winning. But it doesn't mean the reward has improved.

[@bobsondugnutt7526]

As the monetary value of a bitcoin increases. miners will have incentive to 1) invest in more equipment/electricity usage and 2) join pools. 6.25 bitcoins last year is not the same as 6.25 bitcoins right now. That's ~$70,000 vs ~$290,000 per reward. Huge incentives. Likewise, if the value of BTC decreases, miners will use less electricity and even consider selling some of their equipment because the incentive has reduced. When this happens, mining difficulty will reduce, and smaller groups of miners have a better chance of accessing the reward. While this reward will be valued less (because at the time the 6.25 BTC reward would be valued less), to this smaller group with fewer resources, the reward is worth it. That's the "mining equilibrium" as I understand it. I could be completely wrong.

[@cw3le]

@@bobsondugnutt7526 but what about the time when the last coin was mined? What reward will the miners receive? I understood that, next to the coins, miners also receive some fees from transactions they successfully validate, but it's something very small when compared to the actual reward (e.g. reward is 1 BTC and fee is 0.0001 BTC). If you remove the coin part from the reward, that leaves only transaction validation fee. So, miners will either accept to work for much smaller reward or the fees will increase, which will increase the cost of doing crypto transactions and it will definitely make people lose interest in it.

[@jumpaslot]

Great lecture.

[@paceofmind901]

I don't think manipulating the internet itself is as big of a security threat that student (Alin?) seems to think it is, as the actual information of the blockchain is stored on the various nodes and hardware machines that are connected to the blockchain via the internet. You could disconnect all the nodes and the information up to the point of disconnection is not lost. In the hypothetical situation where an entire country tried to ban the blockchain, all you'd need to do is transfer the blockchain information stored on the various computers to another country and reconnect. The blockchain would verify the previous blocks and reintegrate without much of an issue, as far as I can tell.

[@andrescmarin]

What he's referring is that if the network is manipulated you can't manipulate what blocks will be added to the blockchain so the other blocks won't be delivered to the network

[@davecorley5514]

The simple answer is for mining nodes to use VPNs to networks outside the country. But most countries that ban BTC also have a means to isolate and disrupt VPNs that are routed across terrestrial paths. The answer to this dilemma is satellite access to networks outside the terrestrial gateways. Starlink is one such means. Blockstream is another.

[@ART000747]

1:02:20 The smallest unit of Ether is Wei, not Gas

[@rory2001]

Shoot, i didnt know James Maynard Keenan knew this much about blockchain

[@halsear5077]

oh yeah i remember him from economics, him and Morton Fineman.

[@Bonora11]

Watching in 2022... great content!

[@chiefleaf3132]

Time (VDF:Verifiable Delay Function)was the missing piece for the proof of space (hard drives) concept. Therefore creating the more efficient more random blockchain in chia while still using the Nakamoto consensus.

[@chiefleaf3132]

1:10:00 ish in vid

[@davecorley5514]

Voting in a democracy is a Byzantine General’s problem. Blockchain offers a method to gain more accurate voting results and come to a 50.00001% consensus more quickly. In the extreme, proof-of-work by every participant also makes the voting process more secure.

[@nickiwoa7948]

25 hour course on KZbin . Nice

[@zmartkooky244]

They've all got the network part half wrong. Overtaking the network refers to the crypto network (ethereum network, bitcoin network, etc.). Those networks exist independently to the Internet, greenwalls or any other. By overtaking the network we talk about overtaking the crypto network by hoarding hosts and push fake transactions, or forks of any kind.

[@afihaileywibowo1095]

Alene..? Is that you?

[@campusseoul]

I like the slide on Bitcoin Mining Evolution.

[@corridor444]

Great subject and teacher, appreciate it

[@spi12345]

Great teacher, great class, great content. Thanks MIT for sharing this!

[@diamonddiscus]

Curious that what will happen when the miners find the same 18 leading zero with difference following. Or no matter the following, who found the first 18 leading zero win with block?

[@julkiewitz]

Basically it's a race - if two miners find a solution at the same time, it will result in two blocks competing for being the new head of the block chain - let's call them A and B. Now all nodes on the network will have a choice of whether to accept A or B as the actual head and whether to append their next mined blocks to the branch with A or B in it. How they decide that isn't really that important - they could randomize or they could pick one that they found out about earlier. The key idea is that over time one of the branches - that containing A or that containing B will form a longer continuation. Nodes on the network will no longer invest their resources into expanding the shorter branch and it'll become stale / dead. So essentially over time either A or B will win and the system will become consistent again.

[@StationBreakTV]

This is a really excellent video on the topic!

[@dancingdev1088]

I am still waiting for that thursday

[@r.kroner99]

sorry for being a smart ass but the last block reward will be mined in the year 2140 (not 2040)!

[@luvpreetsingh8020]

1:00:22 why does it say _created in a coinbase transaction_? Does it have to do anything with coinbase exchange?

[@MajesticDre]

No. The exchange is probably named after the term. As per Wikipedia: The coinbase is the content of the 'input' of a generation transaction. The coinbase can contain any arbitrary data.

[@luvpreetsingh8020]

He answers it in the next lecture, here - kzbin.info/www/bejne/sHinhadvhpipr68

[@luvpreetsingh8020]

@@MajesticDre Thank you. I learned it later in the next chapter.

[@rohanbhandari7796]

The guy in purple t-shirt who stood in front of the professor is Satoshi Nakamoto and as professor Gary asks this question to find out who he really is, Satoshi goes with a smirk on his face muttering "Yare Yare". Insert anime background music.

[@americancitizen748]

If all of the students in this class owned Bitcoin then they all did very well if they held on to it. Those who sold when it peaked did very well.

[@mustafaal-niama7758]

Love this course but thus far there has been quite a bit of misinformation on the technical side. E.g. in previous session there was an articulation on only TX are hashed, that’s not true. In this session the lecturer continues to refer to the split chain that is part of mining and PoW as hard fork, that also isn’t correct. Hard forks are fundamental changes to the code that would require creation of a completely new chain (new blocks can’t be committed to the same chais because they are no longer compatible) as opposed to soft fork where the code is upgraded but the chain could sustain. There’s a bit of lack of knowledge on setting the difficulty, the address, cryptography, etc. I very much enjoyed the 1st couple of lectures but recommend lectures 3 and 4 be validated (and maybe the following sessions as well) by a blockchain expert.

[@syed9576]

Could you explain the forking part a bit more or link some literature. Thank You.

[@Gary-hd9qc]

He has expressed he is 8 months ahead of his students. He also stated MIT asked him to present this class. Lectures are often asked to present topics outside of their experience and expertise, he’s here sharing what knowledge he’s acquired. Common practice in universities. He often asks students to share their knowledge and knows he knows nothing comparatively. See it in his face occasionally.

[@dylanrico]

10:10 Alene's going to turn up sedated and tied-up in an MIT dungeon.

[@stackspace]

Where do you think those MIT robo dogs come from?

[@afihaileywibowo1095]

😂

[@shammuk02]

all of bitcoin will be mined in 2140 not 2040 Gensler got it wrong

[@albertaleksieiev1843]

Hey Gary, can you please use a whiteboard in the future? It make easier to understand some tech information, i.e. HashCash by Adam Back :)

[@JeremyFisher]

next Thursday

[@alterverwalter9299]

he is not öecutring at MIT anymore i suppose, as he is now busy at the SEC

[@jordinja]

@@alterverwalter9299 he'll definitely need a whiteboard at the SEC

[@ADIL702]

@@JeremyFisher good one

[@henneburymarc]

To any young kids watching this who think they aren't smart enough to go to MIT, this class shows you probably can if you want to, this is like every high school class where 10% do the reading and answer questions and the rest are thinking about their social lives and half asleep. And that 10% aren't necessarily geniuses either.

[@benriggan5267]

Thanks, helpful intro.

[@rqd3]

around 9:00 minute mark, can anyone explain or provide any valid source of what the phd student is referring to? maybe a selfish mining attack?

[@afihaileywibowo1095]

😂

[@ewor99]

We live in a world where the "teacher" learns from their students. Hope they taught you well old man!

[@bblrd_]

welcome to mit

[@dubnet69]

Isn't that what Musk has been warning us about?

[@dubnet69]

Maybe some of us are finally grown up enough.

[@Last-Ninja-1]

Interesting, I will have to watch again. Thank you.🫀

[@aglamadrid19]

Thank you Gary

[@lavishly]

This was somewhat painful to watch, though grateful for MIT sharing (Im an MIT alum on Edx) but asking generally uninformed students who are merely learning so many questions, while they are not mic'd up to boot, makes a very frustrating experience in a recorded mass shared lecture. Would have far preferred all questions at the end and the course materials presented. Just an opinion, still grateful for MIT to share material.

[@user-dc6tr3qe3w]

Q: "is Bitcoin a deflationary currency?" GG: "it depends on your use of that word."

[@1nherit0r]

That desk is dangerous lol

[@wadesuhr]

MIT has an endowment amount equaling $27.4B as of 2021.

[@Stopinvadingmyhardware]

That isn’t shit

[@rubenbaden5508]

If some bad actor takes over a regional network, maybe they can create their own fork within that “sub network” - but wouldn’t any difference wrt the greater network be flagged as an inconsistency? I guess In theory they could have their own “proxy” network and manage whatever is internal to that region. This way they could manipulate the fiscal power of the net value in their region... But I’m not sure if I understand Aleen’s question properly.

[@cauebraga]

Does a pool miner need to be a node? In your point of view, Bitcoin is really decentralized?

[@janmcostar]

Is the cap already reached in 2040 like this video says (after 1 hour and 1 minute) or no earlier than 2140 as many other sources on the Internet state? Also if it would stop in 2040, that would be after only 8 halvings in total and there would only be 20.9 MBTC, not 21.0 MBTC yet.

[@pran10000]

Its definitely 2140. Probably misspoke.

[@Bitcoin_Shango]

Anyone else hear him almost lick his lips when mentioning XRP ? 😂😂

[@tomkav6884]

If eventually bitcoin caps at 21mil and miners stop mining and validating does that mean transaction can't take place and therefore the network would become unsustainable?

[@nairobi311]

So mining will stop at the cap but validation as to keep happening to sustain the network. Remember the block-chain has to have "blocks" of data which have to be validated (consensus) to be added to the chain. I hope I somehow answered you! :) #keepresearching

[@hirenprajapati1]

at that time transactions fee will be high so miners will sustain

[@human.anytime]

I don't understand the how the frequency is handled here between Prof and stud! :-)

[@b_lumenkraft]

If you mine to a pool you inherently use a node. Every miner runs a node. How would you know which block to build on top of if you don't run a node? How would you know which transactions to include if you don't run a node? The professor is wrong when he says there are miners who don't run a node.

[@eugeneeugene3093]

They can mine in a hash pool

[@vasupatel8924]

11:48 was that martin skrelli?

[@DashT1000]

Since he is touching the topic of bizantine fault tolerance protocols and its determinism, he should make a parallelism with Ouroboros from Cardano to understand why it matters since its more resilient than BFT and its moderm adaptations..

[@Perfectmyself]

Very eerie watching this ... $6,300 / BTC

[@alexalston3240]

1:04:43 gary, i know you know manipulation isn't our friend, its why we have the problems in the first place lol 2008 is not an example of why we shouldn't have hard monetary policy rather than this print-as-you-go fuckery, the print as you go model is WHY the crash happened

[@cleansebob1]

Amen!

[@julkiewitz]

Nope. Read about the Great Depression.

[@antoinejutras-carignan8710]

33:49 I think it has happened on january 21 2021 but not a lot of people kept as calm as Gary. They were thinking "bitcoin got hacked", "bitcoin double spend"...

[@lafondawilliams]

It didnt happen just more fake news lol

[@cauebraga]

Thank you, for another great class!

[@HowardARoark]

Is a digital signature of a message ever made WITHOUT hashing the message data first ?

[@JD_2020]

Yes hashing is optional. Signing is not optional.