Bitcoin Basics - Discussion

Blockchain and Bitcoin 101
#597

Thank you for explaining this. Based on what you shared above could the desktop version XDC Wallet be seen as a full node wallet?

#598

No, its just a web interface that is used to manage your wallet. It has to connect to an RPC of a full node somewhere.

1 Like
#599

Hey AleÅ”,

I wonder if you can help me out.

Iā€™m wondering : Given that only one miner at a time can have their block added to the blockchain(and miners are not guaranteed to solve the cryptographic puzzle), why do miners continue to absorb the upfront cost of mining(electricity)? :slightly_smiling_face:

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#600

My understanding was that you never give up your private key even while stored in collective wallets, or third party management vaults. You always have private key for safety and an accompanying public key for outside wallet communicating protocols while transactions and signatures are being validated by nodes and completed by minors?

#601

That was discussed briefly by Cris Bailey in Q&A. He said that quantum computer trading bots speed up action in functioning and trade.

#602

Mining is based on game theory, its literally a game and the winner takes it all. Why do you play games if there is a chance you can loose? :wink:

2 Likes
#603

Yes, but in third party wallets you donā€™t have access to your key but the company that stores it. Youā€™re only allowed to access the balance on the key, until youā€™re not.

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#604

Hey all! Good to know im not alone learning

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#605

Hi everybody! I found this documentation page while researching bitcoin blocks and it was incredibly helpful for the blockchain and mining homework. It really helped me gain a deeper understanding of exactly how the different parts of a block are structured. So, I thought Iā€™d post it here. Hope it helps you too! :slight_smile:

https://developer.bitcoin.org/reference/block_chain.html

2 Likes
#606

This is a good question. How would they get their money back without continuing mining the game ? Well, they just wouldnā€™t. Thatā€™s part of the game theory.

#607

The beginning of the video on Transactions, UTXOs & Fees explains a scenario where every UTXO has to be spent on a transaction, so the remainder is sent back to the original sender (to a different user controlled address?). What is the point of this example? I donā€™t understand why this would ever be necessary.

#608

Iā€™m not sure I understand what is the question? In the example there are only two UTXOs so both get spend. In real world you only need to spend as many UTXOs as you need to fund the tx. But you must always spend the entire UTXO and send the change back to yourself. :slight_smile:

#609

Hi everyone,

What would happen if an UTXO is sent to a receiving address that has been generated from the same wallet. Would the wallet send the btc to itself? if so, would there be any TX fees?

#610

You can send UTXOs to yourself just fine, its how change is sent back to the user, though most wallets generate a new address for change. And yes you would still have to pay a fee. :slight_smile:

2 Likes
#611

Thanks for your answer!

#612

I have a question regarding wallets that I would love if somebody could shed some light on.

In the section about UTXOs I got the impression that the wallet can send the change in a transaction back to a different public key that the wallet manages.
But since you only generate one public key per private key, then this would mean that the new UTXO gets associated with a different private key.

If that is the case then the wallet cannot very well use UTXOs from different addresses to make a new transaction: Am I correct? It would need to create one transaction per address and link the transactions together paying one fee per transaction, correct?

#613

Alko89,
I understand your explanation for diegosan. However, I have been imagining a personal wallet (and one person can have several wallets) to have an individual singular private key that has an accompanying public key. The private initiates tasks from within and the public key has tasks from outside the wallet. In trying to answer Simenvā€™s question below, I do not understand how to answer the question she presents. UTXOs are spent after leaving the wallet, and purchased coins can enter per a different address and received into the wallet with the same private key receiving. Change can be added with a new public key generated by that transaction. Is it more complicated than that? I am not understanding the question below on multiple private keys. Have I missed something in seeking simple answers?

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#614

Simenv,
I asked Alko89 for more clarity on how these transactions work with private and public keys. I was hoping to answer your question but found that I was not sure of my answer. If you found the answer, let us know what you find to be the answer.

1 Like
#615

A wallet generates a new keypair for each new address it generates. Some wallets like the bitcoin core wallet generates 100 addresses in advance when you initialize it and then adds more as you continue to use it.

Most modern wallets are so called HD (hierarchical deterministic) wallets, which means they are able to generate new addresses from one master key (a fancy name for the root private key) based on derivation paths. These types of wallets have been described in BIP32. What this means you only need to back up the key once, often using a mnemonic seed which uses a set of common english words as described in BIP39, to generate all future addresses.

HD wallets particularly use two derivation paths, one to generate new addresses and the second to generate new change addresses, effectively they are the same its just using two sets of paths to generate addresses from and the wallet is able to use all of them because it is able derive the private keys for all of them. :slight_smile:

#616

Thank you - this answers my question.