{"id":13413,"date":"2015-02-02T18:50:25","date_gmt":"2015-02-03T02:50:25","guid":{"rendered":"http:\/\/lifeboat.com\/blog\/?p=13413"},"modified":"2017-04-25T04:07:50","modified_gmt":"2017-04-25T11:07:50","slug":"the-mathematical-wonders-behind-bitcoin","status":"publish","type":"post","link":"https:\/\/lifeboat.com\/blog\/2015\/02\/the-mathematical-wonders-behind-bitcoin","title":{"rendered":"The Mathematical Wonders behind Bitcoin"},"content":{"rendered":"

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Bitcoin as a cryptocurrency has had its moments of strength and weakness. The technology behind bitcoins, however, is a different story. While skeptics don\u2019t expect a lot from Bitcoin as an alternative currency because of its volatility, they do have high hopes for the technological innovation that powers it, believing that it can be further developed to create something much powerful than Bitcoin itself.<\/p>\n

To those who know Bitcoin as a great way of transacting online, but don\u2019t completely understand its dynamics, it\u2019s time to get acquainted with the cryptocurrency\u2019s mathematical wonders that make anonymous, faster, and cheaper transactions of moving funds on the internet possible.<\/p>\n

Most of us know that Bitcoin uses the SHA-256 hashing algorithm, but hashing serves a different function and purpose from that of digital signatures. Hashing actually provides proof that a message has not been changed because running the same hash always generates similar result.<\/p>\n

Any message, regardless of the size can go into a hash function where the algorithm breaks it down, combines the parts, and \u201cdigests\u201d it until it makes a fixed-length outcome called \u201cdigest\u201d. However, a good hashing algorithm possesses some critical characteristics, in which the same message always produces the same result, as mentioned above, and it only works in one direction.<\/p>\n

This means that even the smallest change creates a completely different digest. This is called the \u201cavalanche effect\u201d. Also, the chances of generating the same digest from a transformed message are a tad rare. This is called \u201ccollision resistance\u201d.<\/p>\n

Such nature of Bitcoin\u2019s hash function makes it impossible to change records and transactions once they have been documented. As soon as the hashes are hashed together within the blockchain, counterfeiting records of transactions is no way near possible.<\/p>\n

Then there\u2019s the technology of wallet software. This is where people store bitcoins and use for making transactions. The wallet system is set in which users are prohibited from spending the same units twice (double-spending) by checking new transactions against the blockchain and against other new transactions to ensure the same units are not being cited more than once.<\/p>\n

Though this system was established to avoid fraudulent activities and has proven to be an effective one, it also became an ideal scenario for hacking attacks on a Bitcoin exchange<\/a> that aim to steal bitcoins. It\u2019s because once bitcoins are lost, they\u2019re gone for good and there\u2019s no way of reclaiming them, especially that cryptocurrency usage is not covered by the central government and other intermediary parties like banks. Nonetheless, it\u2019s not totally the Bitcoin\u2019s fault; it\u2019s the Bitcoin exchanges\u2019 security measures.<\/p>\n","protected":false},"excerpt":{"rendered":"

Bitcoin as a cryptocurrency has had its moments of strength and weakness. The technology behind bitcoins, however, is a different story. While skeptics don\u2019t expect a lot from Bitcoin as an alternative currency because of its volatility, they do have high hopes for the technological innovation that powers it, believing that it can be further [\u2026]<\/p>\n","protected":false},"author":345,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1318,43,32,1625,45,77,1524,41,1522,1412],"tags":[],"class_list":["post-13413","post","type-post","status-publish","format-standard","hentry","category-bitcoin","category-business","category-education","category-encryption","category-finance","category-hacking","category-hardware","category-information-science","category-innovation","category-privacy"],"_links":{"self":[{"href":"https:\/\/lifeboat.com\/blog\/wp-json\/wp\/v2\/posts\/13413","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lifeboat.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lifeboat.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lifeboat.com\/blog\/wp-json\/wp\/v2\/users\/345"}],"replies":[{"embeddable":true,"href":"https:\/\/lifeboat.com\/blog\/wp-json\/wp\/v2\/comments?post=13413"}],"version-history":[{"count":1,"href":"https:\/\/lifeboat.com\/blog\/wp-json\/wp\/v2\/posts\/13413\/revisions"}],"predecessor-version":[{"id":46634,"href":"https:\/\/lifeboat.com\/blog\/wp-json\/wp\/v2\/posts\/13413\/revisions\/46634"}],"wp:attachment":[{"href":"https:\/\/lifeboat.com\/blog\/wp-json\/wp\/v2\/media?parent=13413"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lifeboat.com\/blog\/wp-json\/wp\/v2\/categories?post=13413"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lifeboat.com\/blog\/wp-json\/wp\/v2\/tags?post=13413"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}