How Bitcoin Works Under the Hood

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

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

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

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: krplus.net/bidio/pJmCeYGKdYvJZJQ

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.

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.

Next time: how Bitcoin works IN the Hood

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

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!

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

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

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.

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

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

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

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

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

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.

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

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

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.

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.

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

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.

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.

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

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

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

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 :)

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

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

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

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

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! ;)

Thank you for producing such an excellent summary.

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

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

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.

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

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.

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

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!

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

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

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

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

My brain hurts, but it is indeed explicative ;)

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

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

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

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.

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

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.

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

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!

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

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

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

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

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

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

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!

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.

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

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

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

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.

this is the best explanation I've found on youtube

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

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

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

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

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

Amazing description, good job.

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

i think my brain broke....

I feel stupid. I watched the video twice and my head is still spinning

Great explanation. Thanks for your hard work!

This presentation explains it really well, thanks!

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

And when they shut down the electrical grid???????????

Great video! A small correction for 18:23: The last Bitcoin will most likely be mined earlier than 2140 due to the increasing network power and the delay of the difficulty adjustments.

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

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.

Nice intro. Thank you for the explanation.

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

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

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

Just a small nitpicky note: Addresses in Bitcoin are not exactly the public key. They are hashes of the public key of an address in base58

this actually answered all my questions about bitcoins. and very succinctly.

Best description I have heart yet

Excellent video, thanks for the info.

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

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!!

simply put--an excellent piece of work!

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

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

if you google "bitcoin scaling" there are lots of articles on this. Some nodes can choose to rely on others to keep a record of every transaction. Also, after a spent txn is far back in the block chain, you can discard the details of it and keep only a summary hash. The orig. bitcoin paper talks about this compression.

The BEST explanation yet! THANK YOU!