Visualizing How A Bitcoin Transaction Works

Following our last primer on the digital currency, prices have somewhat stabilized (despite the ongoing efforts of TPTB to regulate it out of existence). The following infographic provides a step-by-step illustration of how a bitcoin transaction occurs.

(via bitcoincharts.com)

(click image for legible large version)

(h/t Dr. Constantin Gurdgiev via True Economics blog)

Comments

[GoldMeUp]

If it's just the code then it won't take long to mess with that code to grant btc.

Yeah right.  Bitcoin has a billion dollar market cap, yet no one has decided to "mess with the code" to make themself a millionaire.  If it was at all possible, it would have been done long ago.  There is so much money to be made if you can find a hole in bitcoin, there must be thousands of very smart people pouring over the code for vulnerabilities every day.

Furthermore, it's not possible without discovering a preimage attack on SHA-256.  If someone finds this, it compromises a whole lot more than just Bitcoin.

It's called proof of work for a reason.  If you want to mine lots of bitcoins, go invest in some hardware and compete with everyone else.

Also, the DoS scenario you described is not a network threat.  Firstly, block verification is quick and easy.  Secondly, you could only spam your *peers* with invalid blocks, not the whole network.  You rely on your peers to accept your block as valid and to propogate it out to their peers, so that it propogates to the entire network.  Invalid blocks don't propogate.

Seriously, go read the white paper.