point division) reasonably quickly, but don't have so much har | r/Bitcoin
point division) reasonably quickly, but don't have so much hardware dedicated to SHA256 specifically. Some Intel CPUs do have instructions specifically for SHA256; however, they aren't competitive with specialized Bitcoin hardware that massively parallelizes the hashing using lots of dedicated transistors.
Q: The paper estimates that the disk space required to store the block chain will by 4.2 megabytes per year. That seems very low!
A: The 4.2 MB/year is for just the block headers, and is still the actual rate of growth. The current 60+GB is for full blocks.
Q: Would the advent of quantum computing break the bitcoin system?
A: Here's a plausible-looking article: http://www.bitcoinnotbombs.com/bitcoin-vs-the-nsas-quantum-computer/ Quantum computers might be able to forge bitcoin's digital signatures (ECDSA). That is, once you send out a transaction with your public key in it, someone with a quantum computer could probably sign a different transaction for your money, and there's a reasonable chance that the bitcoin system would see the attacker's transaction before your transaction.
Q: Bitcoin uses the hash of the transaction record to identify the transaction, so it can be named in future transactions. Is this guaranteed to lead to unique IDs?
A: The hashes are technically not guaranteed to be unique. But in practice the hash function (SHA-256) is believed to produce different outputs for different inputs with fantastically high probability. Q: It sounds like anyone can create new Bitcoins. Why is that OK? Won't it lead to forgery or inflation? A: Only the person who first computes a proper nonce for the current last block in the chain gets the 12.5-bitcoin reward for "mining" it. It takes a huge amount of computation to do this. If you buy a computer and have it spend all its time attempting to mine bitcoin blocks, you will not make enough bitcoins to pay for the computer.
Q: The paper mentions that some amount of fraud is admissible; where does this fraud come from?
A: This part of the paper is about problems with the current way of paying for things, e.g. credit cards. Fraud occurs when you buy something on the Internet, but the seller keeps the money and doesn't send you the item. Or if a merchant remembers your credit card number, and buys things with it without your permission. Or if someone buys something with a credit card, but never pays the credit card bill.
Q: Has there been fraudulent use of Bitcoin?
A: Yes. I think most of the problems have been at web sites that act as wallets to store peoples' bitcoin private keys. Such web sites, since they have access to the private keys, can transfer their customers' money to anyone. So someone who works at (or breaks into) such a web site can steal the customers' Bitcoins.
Q: Satoshi's paper mentions that each transaction has its own transaction fees that are given to whoever mined the block. Why would a miner not simply try to mine blocks with transactions with the highest transaction fees?
A: Miners do favor transactions with higher fees. You can read about typical approaches here: https://en.bitcoin.it/wiki/Transaction\_fees And here's a graph (the red line) of how long your transaction waits as a function of how high a fee you offer: https://bitcoinfees.github.io/misc/profile/
Q: Why would a miner bother including transactions that yield no fee?
A: I think many don't mine no-fee transactions any more.
Q: How are transaction fees determined/advertised?
A: Have a look here: https://en.bitcoin.it/wiki/Transaction\_fees It sounds like (by default) wallets look in the block chain at the recent correlation between fee and time until a transaction is included in a mined block, and choose a fee that correlates with relatively quick inclusion. I think the underlying difficulty is that it's hard to know what algorithms the miners use to pick which
