Exploring Bitcoin with Blockchain: Adopt Bitcoin to Reinvent Business Scaling with Lower Transaction Costs and Better Fraud Prevention

by Vizeet Srivastava

Length: 524 pages
Edition: 1
Language: English
Publisher: BPB Publications
Publication Date: 2022-06-22
ISBN-10: 9355512783
ISBN-13: 9789355512789
Sales Rank: #2794098 (See Top 100 Books)

0 ratings

Print Book Look Inside

Building trust among customers and service providers in the zero trust environment.

Key Features

Visual demonstration of Blockchain fundamentals and concepts of Bitcoin.
Easy understanding of Bitcoin internals with the help of Python and its procedural language features.
Includes questions and programming exercises to help readers test their skills.

Description

Exploring Bitcoin with Blockchain teaches readers how Bitcoin works from the ground up and how readers can use it to help businesses innovate and reinvent their business practices in the digital age.

The book covers some of the most important aspects of a Bitcoin network: blocks, transaction validations, mempool, different types of nodes, and the mining process. These concepts, such as timestamp and proof-of-work, are critical to understanding the Bitcoin system and getting practically started with Bitcoin. The book explains how to build payment addresses, define and secure wallets, and use BIP 0032 to construct HD wallets to begin Bitcoin transactions. This book helps readers to learn how to write Python scripts to create transactions, set the network fee, add security to transactions, and publish those transactions on the Blockchain network.

This book covers a lot of problem-solving exercises and programming tasks. It explores the Lightning Network, which allows parties to a smart contract to send and receive Bitcoins using their digital wallets without incurring small fees. While you’re learning it in depth, you get the opportunity to try out onion routing, and different improvements like Schnorr signature, and taproot.

What you will learn

Learn about the possibilities of Bitcoin, smart contracts, and their applications in diverse industries.
Investigate the internal workings of Bitcoin, its whole ecosystem, and how it functions as the most prominent cryptocurrency.
Dive into Bitcoin’s consensus mechanism and learn how to set up Bitcoin wallets for personal money management.
A brief explanation of how the Lightning Network protocol works.
Explore topics like Forks, gossip protocol, P2PKH, P2SH transactions, Schnorr, and many more.

Who this book is for

This book appeals primarily to developers, tech-savvy students, and IT professionals eager to explore everything about Bitcoin and its fundamentals. Knowing the basics of Python is beneficial, although not an essential requirement.

Cover Page
Title Page
Copyright Page
Dedication Page
About the Author
About the Reviewer
Acknowledgement
Preface
Errata
Table of Contents
1. Introduction
    Structure
    Objectives
    The cryptocurrency and blockchain ecosystem
        Distributed Ledger Technology (DLT)
        Cryptocurrencies and their value proposition
            Smart contract and token platforms
            Payments, store-of-value, and alternate finance
            Privacy
            Oracles and multichain connectors
            Stablecoins
        Blockchain ecosystem
            Medium of exchange and store of value
            Private and public blockchains
            Permissioned and permissionless blockchains
            Compliance, record keeping, and auditing
            Tokens
            Decentralized applications
            Fungible and non-fungible tokens
            Decentralized finance
        The Bitcoin ecosystem
            Bitcoin education, training, and online help materials
            Nodes and wallets
            Mining and mining pools
            Payments
            Exchanges
    Conclusion
    Points to remember
    Questions
2. Overview of Bitcoin
    Structure
    Objectives
    The case for learning Bitcoin
    Developments leading to Bitcoin
    The rise of Bitcoin
    Defining Bitcoin
        Byzantine general problem
        Bitcoin as a solution to Byzantines general problem
        Bitcoin property as a digital asset
    Conclusion
    Points to remember
    Questions
3. Understanding the Bitcoin Network
    Structure
    Objectives
    Bitcoin physical network topology
        Mining nodes
            Pool mining
            Solo mining
        Full node
        Simplified Payment Verification (SPV)
    Bitcoin consensus network
        Transactions
        Blockchain
        Consensus rules
        Proof of work (PoW)
        Validating nodes
        Mempool
        Cryptography
        Gossip protocol
    Bitcoin network security
    Conclusion
    Points to remember
    Questions
4. Bitcoin in the Real World
    Structure
    Objectives
    Different types of exchanges
    Bitcoin use cases
        Trading in bitcoin
        Investing and saving in bitcoin
        Accepting bitcoins by an online merchant
        Accepting bitcoins at a brick-and-mortar store
        Paying or receiving bitcoin as salary
        Using bitcoin for expenses and traveling
        Bitcoin for remittance
        Bitcoin for social cause
        Mining bitcoin
    Bitcoin and cryptocurrency regulations
    Conclusion
    Points to remember
    Questions
5. The Whitepaper
    Structure
    Objective
    Abstract section of the whitepaper
    Introduction section of the whitepaper
    Transactions section of the whitepaper
    Timestamp Server section of the whitepaper
    Proof-of-Work section of the whitepaper
    Network section of the whitepaper
    Incentive section of the whitepaper
    Reclaiming Disk Space section of the whitepaper
    Simplified Payment Verification section of the whitepaper
    Combining and Splitting Value section of the whitepaper
    Privacy section of the whitepaper
    Calculations section of the whitepaper
    Conclusion section of the whitepaper
    Conclusion
    Points to remember
    Questions
6. Blockchain, Transactions, and Mining
    Structure
    Objectives
    Bitcoin software
        Bitcoin Core installation
            Running the Bitcoin Core server
            Bitcoin Core client
            Querying indexes in Python
    Blockchain
        Genesis block
        Blocks and indexes
        Block header
            Block version
            Previous block hash
            Timestamp
            Merkle root
            Bits and nonce
        Serialized block
            Magic number
            Block file
            Block traversal using block indexes
    Transactions
        UTXO
    Mining
        Mining profitability
            Block reward
            Transaction fee
            Coinbase transaction amount verification
            Mining cost
        Mempool
    Conclusion
    Points to remember
    Questions
7. Node Communication
    Structure
    Objectives
    Bitcoin network topology
    Node bootstrapping
    Network messaging
        Message format
        Establishing connection
        Disconnecting with inactive peer
        Node discovery
        Receiving full blockchain
        Synchronizing blockchain
        Transaction broadcasting
        Block broadcasting
            Unsolicited Block Push
            Direct Headers Announcements
            Compact Block Announcements
    Conclusion
    Points to remember
    Questions
8. Technology Limitations, Threats, and Vulnerabilities
    Structure
    Objectives
    Design limitations
        Block size limitation
            Effect on transaction verification
            Effect on blockchain size
        Block time limitation
        Privacy limitation
        Solutions to privacy and scaling
            Improved hardware
            Utreexo accumulators
            Signature aggregation
            MAST: Merklized Abstract Syntax Trees
            Taproot
            Lightning Network
            CoinJoin
            Tumbler services
    Bitcoin mining energy usage
    Threats to individuals and network
        Threats from governments
        Threats from central banks
        Malicious hackers
            Bitcoin theft
        Losing private keys or seed phrase
        Threat due to vulnerabilities
            Transaction malleability
            Dusting attack
            Mempool flood attack
            Selfish mining
            BGP hijacking attack
            0-confirmation attack:
            Hiding hash rate
            Blacklist addresses
            Replay attack
            Empty block mining
            Bitcoin mining centralization
            Sybil attack
            Denial-of-Service (DoS) Attack
            Quantum computing attack
            Hidden bugs, bug exploit, and reorg
        Frauds and robbery
    Conclusion
    Points to remember
    Questions
9. Wallets and Addresses
    Structure
    Objectives
    Mnemonic code
    Format and generation of private key, public key, and address
        Private key
        Public key
        Address
    Hierarchical Deterministic (HD) wallet
        Master key generation
        Key derivation
            Parent private key -> Child private key
            Parent public key -> Child public key
            Child private key -> Parent private key (Wallet private key leak)
            Deriving hardened child keys
        Extended keys
            Master extended public and private keys
            Extended public and private keys
        Key derivation path
    Conclusion
    Points to remember
    Questions
10. Create and Validate Transactions
    Structure
    Objectives
    Scripting Bitcoin transactions
        Reverse Polish notation
        OPCODES
        Signature verification
            Hash type – SIGHASH_ALL
            Hash type – SIGHASH_NONE, SIGHASH_SINGLE, SIGHASH_ANYONECANPAY
            Standard Bitcoin script - P2PK
            Standard Bitcoin script – P2PKH
            Standard Bitcoin script – P2MS
            Standard Bitcoin script – P2SH
    Building transactions
        Building P2PKH transaction
        Building P2SH transaction
    Conclusion
    Points to remember
    Questions
11. Smart Contract and Other Useful Transactions
    Structure
    Objectives
    Script opcodes
    Digital property
        Document timestamping
    Time locked transactions
        Time locked payment
        Payment with relative locktime
    Smart contract
        Solution to trust issue in payments
            Simple multi-signature payment
            Improved payment with relative locktime
            Payments involving escrow
        Payment involving secret identifier
    Collaborative transactions
        Charity use case
        Subsidy use case
        Planned contribution within a group
    Conclusion
    Points to remember
    Questions
12. Segregated Witness
    Structure
    Objectives
    Understanding segregated witness
        Transaction malleability
        Segregated witness
            User Activated Soft Fork (UASF)
            Transaction structure
            Segregated witness as scaling solution
            Transaction fee calculation
    New standard scripts
        Native SegWit transaction scripts
            Native P2WPKH
            Native P2WSH
        Wrapped SegWit scripts
            Wrapped P2WPKH or P2SH-P2WPKH
            Wrapped P2WSH or P2SH-P2WSH
    Signature verification
    Address format and generation
    Conclusion
    Points to remember
    Questions
13. Lightning Network
    Structure
    Objectives
    Simplified working of Lightning Network
        Payment between connected peers
        Payment though multiple channels
    Bolt specifications
    Contracts involved in Lightning Network
        Offline payments between connected peers
            Channel creation
            Offline transactions
            Channel closure
        Bidirectional dual-funded channel
            Channel creation
        Offline payments involving intermediaries
    Monitoring of channels
        Watchtower
            Drawback of justice transaction
    Routing mechanism and considerations
        Trampoline nodes
        Channel management
            Circular rebalancing
            Splicing
            Lightning Loop or submarine swaps
        Multi-Part Payments or MPP
    End user experience
        Lightning wallets
        Lightning invoice
        LNURL
        Merchant integration
        Social media integrations
        Adoption by exchanges
    Other cryptocurrencies
        Cross-chain atomic swap
    Network topology
    Conclusion
    Points to remember
    Questions
Index

Exploring Bitcoin with Blockchain: Adopt Bitcoin to Reinvent Business Scaling with Lower Transaction Costs and Better Fraud Prevention

Mastering Julia, 2nd Edition: Enhance your analytical and programming skills for data modeling and processing with Julia

Applying Artificial Intelligence in Cybersecurity Analytics and Cyber Threat Detection

Learn Enough Python to Be Dangerous: Software Development, Flask Web Apps, and Beginning Data Science with Python

Advances in Digital Marketing in the Era of Artificial Intelligence: Case Studies and Data Analysis for Business Problem Solving

Security Challenges with Blockchain: Navigate Blockchain Security Challenges, Unveil Vulnerabilities, and Gain Practical Strategies for Secure Application Development (English Edition)

Wireless Communications