satoshi-hodler-nakamoto

My attempt of building the bitcoin from scratch. I wrote this to better understand the "Bitcoin" and Nakamoto Consensus. This implementation is based on the initial whitepaper Bitcoin: A Peer-to-Peer Electronic Cash System by Satoshi Nakamoto [link]

Components

• Coin
  

  • Chain of digital signatures - elliptical curve digital signature algorithm [link]. Transfer of a coin - digitally sign [previous transaction + public key of next owner]. Code for a simple ecdsa:(from stackoverflow)
    Usage:
    

  	# SECP256k1 is the Bitcoin elliptic curve
  	sk = ecdsa.SigningKey.generate(curve=ecdsa.SECP256k1) 
  	vk = sk.get_verifying_key()
  	sig = sk.sign(b"message")
  	vk.verify(sig, b"message") # True
  

  To verify an existing signature with a public key:
  

      message = b"message"
      public_key = '98cedbb266d9fc38e41a169362708e0509e06b3040a5dfff6e08196f8d9e49cebfb4f4cb12aa7ac34b19f3b29a17f4e5464873f151fd699c2524e0b7843eb383'
      sig = '740894121e1c7f33b174153a7349f6899d0a1d2730e9cc59f674921d8aef73532f63edb9c5dba4877074a937448a37c5c485e0d53419297967e95e9b1bef630d'
      vk = ecdsa.VerifyingKey.from_string(bytes.fromhex(public_key), curve=ecdsa.SECP256k1)
      vk.verify(bytes.fromhex(sig), message) # True
  

• Time Stamp Server
  taking a hash of a block of items to be timestamped and broadcast the hash to the network.

• Proof of Work
  Hash Puzzle that is computationally expensive.

• Block
  

• Nodes and Miners
  

• Merkle Trees - Hash Trees for transaction
  

• UTXO Unspent Transaction Output
  This term was not used in the white paper however, this is the same as section 9: Combining and Splitting Value in the paper.

• Mining
  Circulation of coins

• Nakamoto Consensus
  

• Limits
  

  • Maximum number of coins
  • Limiting the number of blocks produced
  • Mining incentives

• Network