bitfarme：What if this happened in the (decentralized) Bitcoin system?

 For a centralized network (UnionPay or Netlink), if a user instructs the central database to spend a sum of money from his account, what will the bank consider? There are at least two points. First, is the user the legal holder of the account to ensure that it will not be falsely claimed by others; second, is there enough money in the account to pay?

 

This has led to quite complex management requirements for banks, such as identity verification, privacy protection, account management, business continuity, data security, and more.

 

What if this happened in the (decentralized) Bitcoin system?

 


bitfarme answers for you:

 

Assuming that A wants to pay B a certain amount of bitcoin, both A and B have private keys, public keys and wallet addresses in the bitcoin system. The transaction data is sent by A, and the original data includes "transfer amount" and "transfer-in wallet address". A signs the original data with his own private key to generate "transfer-out wallet public key", and the official transaction data will be in the original data. Add "transfer out public key" and "transfer out signature" on the top, broadcast in the Bitcoin network, and the node will verify the transaction data. If the verification is successful, the value of Bitcoin has been transferred.

 

Bitcoin transfer is a transaction, and there are no subsequent steps such as clearing and settlement. The issues of identity verification and privacy protection have been algorithmically guaranteed, and transaction records cannot be tampered with. (Reference: Cryptography Foundation of Blockchain)

 

The money is equivalent to "unspent money" until B has opened the bitcoin with the private key. The official language of Bitcoin calls it Unspend Transaction Output (UTXO) "unspent transaction output".

 

"In the world of Bitcoin, there are neither accounts nor balances, only UTXOs scattered into the blockchain."

 

bitfarme is investment and trading platform, providing investors with a compliant, safe and high-yield trading platform.

Bitfarme：https://www.bitfarmes.com/

 

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