I really wanted to create my own cryptocurrency completely from scratch (releasing soon). So I had to reason from first principles in order to create a knowledge tree about everything from Ledgers, cryptographic hash functions to P2P architecure.

• Want to build a currency without a central authority or a middle man processing and regulating
• What is a currency?
  • a medium of change of value
    • hypothetically a goat thats priced at $300 will likely be bought with the amount of currency if a peron values it to be worth >= $300
    • it is a concrete way of showing you have value with you to everyone without fraud(well if majority are good actors)
• What is the difference between paypal and bitcoin?
  • Both are similar in that both can send payments digitally
  • One is a central figure while one is decentralized
    • Bitcoin lets you do whatever you want basically
• How does paypal and banks avoid double spending?
  • once the money is spent you dont have the money to replicate and spend the same money again. -ex1: giving a 15 dollar bill to buy pasta - you cant duplicate it because of the fact that you dont have a copy of it or anything similar with you.
    • The central authority keeps track of the first transaction with that certain coin and determines
• how does a cryptocurrency avoid double spending?
  • you need to keep track of all the transactions to see which coin has been spent where
    • A ledger of sorts
      • Since you cant depend on a central authority you must publicise the transaction it to everyone
        • We need the “majority” of the CPU holders to agree this was the history of the order of the transaction of the coin
        • add a time component?
          • Timestamp Server (https://en.wikipedia.org/wiki/Trusted_timestamping)
            • takes a hash of a ledger or “block” and publicises the hash so that people know
              • How do people know? Which hash should they trust? Which block should they add as the final official transaction?
                • proof of work
                  • solve a computational math problem and if you can you are given approval to add a block (list of transactions at a given time) to the blockchain these n transactions took place during this time
                  • the hash also includes the hash of the previous time stamp to it forms a sort of chain of blocks
          • How a new block is added to the chain
            • New transaction is brodcasted to all nodes
            • Each node collects new transactions into a block
            • Each node wokrs on finding a difficult proof-of-work for its block.
            • When a node find a proof-of-work, it brodcasts the block to all nodes
            • Nodes accept the block only if all transactions in it is valid
              • valid means checking the double spending problem since now we have the time metric
            • Nodes accept this block if people build off of this block
              • You cannot go back if you build off
• How does paypal or banks determine scams such as someone claiming someone needs to pay them $50 when in reality they havent?
  • they have internal accounts and systems in place
    • some signature system whether its accounted by a credit card or debit card
• How does a cryptocurrency determine scams? (especially on a ledger)
  • You need a really secure approval that says you approve a transaction of you sending the payment.
    • This gets rid of the risk of someone saying you need to pay someone without your approval
    • Also only allow payments which your input is still reamins a value greater than 0
    • Can’t someone copy the digital signature because of its inheriant properties?
      • cryptography to the rescue
• How can someone hack a central transaction system such as paypal or a bank or get more money then there should?
  • You can hack its systems and take money
  • You can divert payments to yourself
  • Social engineering
  • Fake money/Black money
• How can someone hack a cryptocurrency?
  • know a private key of a certain user

  • know the wallet account for a certain person

  • If Nodes are immune to false info and generation of coins from thin air is there any other way?

    • the only other way is to take back money he recently spent getting value for free

    • You can double spend by spending coins before you have above 51% cpu and then once u have 51% cpu add a new fork to the time when u didnt spend those coins and then u can easily spend coins again - can other people also benefit from this? - they possibly can if they coincidentally have the same situation as him

• What architecture does a cryptocurrency use?
  • A P2P (peer to peer network)
    • each node in the network has its own private copy of the blockchain
      • Unless you are SVP which only has the top of the merkel tree (assuming)
    • A bitcoin network node consists of
      • Wallet component
      • Miner
      • Copy of blockchain im assuming?
      • Network Routing
      • There is also a thing called a “Full Node”
    • Simplified Payment Verification Nodes
      • Do not use the full blockchain with every single transaction in each block but rather hash a merkel tree header for each block and then can use other nodes which ahve a specific transaction it is looking for and can pinpoint it traversing the merkel tree
    • What infrastructure can we use to impliment this network?
      • libp2p seems to be as of 11/28/2020 the choice
      • Our cryptocurreny is going to be implimented in go a/f 11/28/2020