Fudbustin' - Deflation [Episode 35] by Bottomshelf Bitcoin ...

Great interview questions for bitcoin engineers

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Questions. Chapter 1: Introduction 1. What are the main Bitcoin terms? 2. What is a Bitcoin address? 3. What is a Bitcoin transaction? 4. What is a Bitcoin block? 5. What is a Bitcoin blockchain? 6. What is a Bitcoin transaction ledger? 7. What is a Bitcoin system? What is a bitcoin (cryptocurrency)? How are they different? 8. What is a full Bitcoin stack? 9. What are two types of issues that digital money have to address? 10. What is a “double-spend” problem? 11. What is a distributed computing problem? What is the other name of this problem? 12. What is an election? 13. What is a consensus? 14. What is the name of the main algorithm that brings the bitcoin network to the consensus? 15. What are the different types of bitcoin clients? What is the difference between these clients? Which client offers the most flexibility? Which client offers the least flexibility? Which client is the most and least secure? 16. What is a bitcoin wallet? 17. What is a confirmed transaction and what is an unconfirmed transaction? Chapter 2: How Bitcoin works. 1. What is the best way to understand transactions in the Bitcoin network? 2. What is a transaction? What does it contain? What is the similarity of a transaction to a double entry ledger? What does input correspond to? What does output correspond to? 3. What are the typical transactions in the bitcoin network? Could you please name three of such transactions and give examples of each type of the transaction? 4. What is a QR and how it is used in the Bitcoin network? Are there different types of QRs? If so, what are the different types? Which type is more informational? What kind of information does it provide? 5. What is SPV? What does this procedure check and what type of clients of the Bitcoin network usually use this procedure? Chapter 3: The Bitcoin client. 1. How to download and install the Core Bitcoin client? 2. What is the best way to test the API available for the Core Bitcoin client without actually programming? What is the interface called? 3. What are the major areas of operations in the Bitcoin client? What can we do with the client? 4. What are the available operations for the Bitcoin addresses? 5. What are the available read operations for the Bitcoin transactions? How is a transaction encoded in the Bitcoin network? What is a raw transaction and what is a decoded transaction? 6. If I want to get information about a transaction that is not related to any address in my own wallet, do I need to change anything in the Bitcoin client configuration? If yes, which option do I need to modify? 7. What are the available read operation for the Bitcoin blocks? 8. What are the available operations for the creation of the transactions in the Bitcoin network? 9. How do you normally need to address the unspent output from the previous transaction in order to use it as an input for a new transaction? 10. What is the mandatory operation after creating a new transaction and before sending this new transaction to the network? What state does the wallet have to be in order to perform this operation? 11. Is the transaction ID immutable (TXID)? If not why, if yes, why and when? 12. What does signing a transaction mean? 13. What are the other options for Bitcoin clients? Are there any libraries that are written for some specific languages? What types of clients do these libraries implement? Chapter 4: Keys, Addresses and Wallets. 1. What is a PKC? When it was developed? What are the main mathematical foundations or functions that PKC is using? 2. What is ECC? Could you please provide the formula of the EC? What is the p and what is the Fp? What are the defined operations in ECC? What is a “point to infinity”? 3. What is a Bitcoin wallet? Does this wallet contain coins? If not, what does it contain then? 4. What is a BIP? What it is used for? 5. What is an encrypted private key? Why would we want to encrypt private keys? 6. What is a paper wallet? What kind of storage it is an example of? 7. What is a nondeterministic wallet? Is it a good wallet or a bad wallet? Could you justify? 8. What is a deterministic wallet? 9. What is an HD wallet? 10. How many keys are needed for one in and out transaction? What is a key pair? Which keys are in the key pair? 11. How many keys are stored in a wallet? 12. How does a public key gets created in Bitcoin? What is a “generator point”? 13. Could you please show on a picture how ECC multiplication is done? 14. How does a private key gets created in Bitcoin? What we should be aware of when creating a new private key? What is CSPRNG? What kind of input should this function be getting? 15. What is a WIF? What is WIF-Compressed? 16. What is Base58 encoding and what is Base58Check encoding? How it is different from Base64 encoding? Which characters are used in Base58? Why Base58Check was invented? What kind of problems does it solve? How is Base58Check encoding is created from Base58 encoding? 17. How can Bitcoin addresses be encoded? Which different encodings are used? Which key is used for the address creation? How is the address created? How this key is used and what is the used formula? 18. Can we visually distinguish between different keys in Base58Check format? If yes, how are they different from each other? What kind of prefixes are used? Could you please provide information about used prefixes for each type of the key? 19. What is an index in HD wallets? How many siblings can exist for a parent in an HD wallet? 20. What is the depth limitation for an HD wallet key hierarchy? 21. What are the main two advantages of an HD wallet comparing to the nondeterministic wallets? 22. What are the risks of non-hardened keys creation in an HD wallet? Could you please describe each of them? 23. What is a chain code in HD wallets? How many different chain code types there are? 24. What is the mnemonic code words? What are they used for? 25. What is a seed in an HD wallet? Is there any other name for it? 26. What is an extended key? How long is it and which parts does it consist of? 27. What is P2SH address? What function are P2SH addresses normally used for? Is that correct to call P2SH address a multi-sig address? Which BIP suggested using P2SH addresses? 28. What is a WIF-compressed private key? Is there such a thing as a compressed private key? Is there such a thing as a compressed public key? 29. What is a vanity address? 30. What is a vanity pool? 31. What is a P2PKH address? What is the prefix for the P2PKH address? 32. How does the owner prove that he is the real owner of some address? What does he have to represent to the network to prove the ownership? Why a perpetrator cannot copy this information and reuse it in the next transactions? 33. What is the rule for using funds that are secured by a cold storage wallet? How many times you can send to the address that is protected by the private key stored in a cold storage? How many times can you send funds from the address that is protected by the private key stored in a cold storage? Chapter 5: Transactions. 1. What is a transaction in Bitcoin? Why is it the most important operation in the Bitcoin ecosystem? 2. What is UTXO? What is one of the important rules of the UTXO? 3. Which language is used to write scripts in Bitcoin ecosystem? What are the features of this language? Which language does it look like? What are the limitations of this language? 4. What is the structure of a transaction? What does transaction consists of? 5. What are the standard transactions in Bitcoin? How many standard transactions there are (as of 2014)? 6. What is a “locking script” and what is an “unlocking script”? What is inside these scripts for a usual operation of P2PKH? What is a signature? Could you please describe in details how locking and unlocking scripts work and draw the necessary diagrams? 7. What is a transaction fee? What does the transaction fee depend on? 8. If you are manually creating transactions, what should you be very careful about? 9. Could you please provide a real life scenario when you might need a P2SH payment and operation? 10. What is the Script operation that is used to store in the blockchain some important data? Is it a good practice? Explain your answer. Chapter 6: The Bitcoin Network. 1. What is the network used in Bitcoin? What is it called? What is the abbreviation? What is the difference between this network architecture and the other network architectures? Could you please describe another network architecture and compare the Bitcoin network and the other network architectures? 2. What is a Bitcoin network? What is an extended Bitcoin network? What is the difference between those two networks? What are the other protocols used in the extended Bitcoin network? Why are these new protocols used? Can you give an example of one such protocol? What is it called? 3. What are the main functions of a bitcoin node? How many of them there are? Could you please name and describe each of them? Which functions are mandatory? 4. What is a full node in the Bitcoin network? What does it do and how does it differ from the other nodes? 5. What is a lightweight node in the Bitcoin network? What is another name of the lightweight node? How lightweight node checks transactions? 6. What are the main problems in the SPV process? What does SPV stand for? How does SPV work and what does it rely on? 7. What is a Sybil attack? 8. What is a transaction pool? Where are transaction pools stored in a Bitcoin network client? What are the two different transaction pools usually available in implementations? 9. What is the main Bitcoin client used in the network? What is the official name of the client and what is an unofficial name of this client? 10. What is UTXO pool? Do all clients keep this pool? Where is it stored? How does it differ from the transaction pools? 11. What is a Bloom filter? Why are Bloom filters used in the Bitcoin network? Were they originally used in the initial SW or were they introduced with a specific BIP? Chapter 7: The Blockchain. 1. What is a blockchain? 2. What is a block hash? Is it really a block hash or is it a hash of something else? 3. What is included in the block? What kind of information? 4. How many parents can one block have? 5. How many children can one block have? Is it a temporary or permanent state of the blockchain? What is the name of this state of the blockchain? 6. What is a Merkle tree? Why does Bitcoin network use Merkle trees? What is the advantage of using Merkle trees? What is the other name of the Merkle tree? What kind of form must this tree have? 7. How are blocks identified in the blockchain? What are the two commonly used identities? Are these identities stored in the blockchain? 8. What is the average size of one transaction? How many transactions are normally in one block? What is the size of a block header? 9. What kind of information do SPV nodes download? How much space do they save by that comparing to what they would need if they had to download the whole blockchain? 10. What is a usual representation of a blockchain? 11. What is a genesis block? Do clients download this block and if yes – where from? What is the number of the genesis block? 12. What is a Merkle root? What is a Merkle path? Chapter 8: Mining and Consensus. 1. What is the main purpose of mining? Is it to get the new coins for the miners? Alternatively, it is something else? Is mining the right or good term to describe the process? 2. What is PoW algorithm? 3. What are the two main incentives for miners to participate in the Bitcoin network? What is the current main incentive and will it be changed in the future? 4. Is the money supply in the Bitcoin network diminishing? If so, what is the diminishing rate? What was the original Bitcoin supply rate and how is it changed over time? Is the diminishing rate time related or rather block related? 5. What is the maximum number of Bitcoins available in the network after all the Bitcoins have been mined? When will all the Bitcoins be mined? 6. What is a decentralized consensus? What is a usual setup to clear transactions? What does a clearinghouse do? 7. What is deflationary money? Are they good or bad usually? What is the bad example of deflationary spiral? 8. What is an emergent consensus? What is the feature of emergent consensus? How does it differ from a usual consensus? What are the main processes out of which this emergent decentralized consensus becomes true? 9. Could you please describe the process of Independent Transaction Verification? What is the list of criteria that are checked against a newly received transaction? Where can these rules be checked? Can they be changed over time? If yes, why would they be changed? 10. Does mining node have to be a full node? If not, what are the other options for a node that is not full to be a mining node? 11. What is a candidate block? What types of nodes in the Bitcoin network create candidate blocks? What is a memory pool? Is there any other name of the memory pool? What are the transactions kept in this memory pool? 12. How are transactions added to the candidate block? How does a candidate block become a valid block? 13. What is the minimum value in the Bitcoin network? What is it called and what is the value? Are there any alternative names? 14. What is the age of the UTXO? 15. How is the priority of a transaction is calculated? What is the exact formula? What are the units of each contributing member? When is a transaction considered to be old? Can low priority transactions carry a zero fee? Will they be processed in this case? 16. How much size in each block is reserved for high priority transactions? How are transactions prioritized for the remaining space? 17. Do transactions expire in Bitcoin? Can transactions disappear in the Bitcoin network? If yes, could you please describe such scenario? 18. What is a generation transaction? Does it have another name? If it does, what is the other name of the transaction? What is the position of the generation transaction in the block? Does it have an input? Is the input usual UTXO? If not – what is the input called? How many outputs there are for the generation transaction? 19. What is the Coinbase data? What is it currently used for? 20. What is little-endian and big-endian formats? Could you please give an example of both? 21. How is the block header constructed? Which fields are calculated and added to the block header? Could you please describe the steps for calculation of the block header fields? 22. What is a mantissa-exponent encoding? How is this encoding used in the Bitcoin network? What is the difficulty target? What is the actual process of mining? What kind of mathematical calculation is executed to conduct mining? 23. Which hash function is used in the Bitcoin mining process? 24. Could you describe the PoW algorithm? What features of the hash function does it depend on? What is the other name of the hash function? What is a nonce? How can we increase the difficulty of the PoW calculation? What do we need to change and how do we need to change this parameter? 25. What is difficulty bits notation? Could you please describe in details how it works? What is the formula for the difficulty notation? 26. Why is difficulty adjustable? Who adjusts it and how exactly? Where is the adjustment made? On which node? How many blocks are taken into consideration to predict the next block issuance rate? What is the change limitation? Does the target difficulty depend on the number of transactions? 27. How is a new block propagated in the network? What kind of verification does each node do? What is the list of criteria for the new block? What kind of process ensures that the miners do not cheat? 28. How does a process of block assembly work? What are the sets of blocks each full node have? Could you please describe these sets of blocks? 29. What is a secondary chain? What does each node do to check this chain and perhaps to promote it to the primary chain? Could you please describe an example when a fork occurs and what happens? 30. How quickly forks are resolved most of the time? Within how many new block periods? 31. Why the next block is generated within 10 minutes from the previous? What is this compromise about? What do designers of the Bitcoin network thought about when implementing this rule? 32. What is a hashing race? How did Bitcoin hashing capacity has changed within years from inception? What kind of hardware devices were initially used and how did the HW utilization evolved? What kind of hardware is used now to do mining? How has the network difficulty improved? 33. What is the size of the field that stores nonce in the block header? What is the limitation and problem of the nonce? Why was an extra nonce created? Was there any intermediate solution? If yes, what was the solution? What are the limitations of the solution? 34. What is the exact solution for the extra nonce? Where does the new space come from? How much space is currently used and what is the range of the extra nonce now? 35. What is a mining pool? Why was it created? How are normally such pools operated? Do they pay regularly to the pool participants? Where are newly created Bitcoins distributed? To which address? How do mining pools make money? How do the mining pools calculate the participation? How are shares earned calculated? 36. What is a managed pool? How is the owner of the pool called? Do pool members need to run full nodes? Explain why or why not? 37. What are the most famous protocols used to coordinate pool activities? What is a block template? How is it used? 38. What is the limitation of a centralized pool? Is there any alternative? If yes, what is it? How is it called? How does it work? 39. What is a consensus attack? What is the main assumption of the Bitcoin network? What can be the targets of the consensus attacks? What can these attacks do and what they cannot do? How much overall capacity of the network do you have to control to exercise a consensus attack? Chapter 9: Alternative Chains, Currencies and Applications. 1. What is the name of alternative coins? Are they built on top of the Bitcoin network? What are examples of them? Is there any alternative approach? Could you please describe some alternatives? 2. Are there any alternatives to the PoW algorithm? If yes – what are the alternatives? Could you please name two or three? 3. What is the operation of the Script language that is used to store a metadata in Bitcoin blockchain? 4. What is a coloured coin? Could you please explain how it is created and how it works? Do you need any special SW to manage coloured coins? 5. What is the difference between alt coins and alt chains? What is a Litecoin? What are the major differences between the Bitcoin and Litecoin? Why so many alt coins have been created? What are they usually based on? 6. What is Scrypt? Where is it used and how is it different from the original algorithm from which it has been created? 7. What is a demurrage currency? Could you please give an example of one blockchain and crypto currency that is demurrage? 8. What is a good example of an alternative algorithm to PoW? What is it called and how is it different from the PoW? Why the alternatives to Bitcoin PoW have been created? What is the main reason for this? What is dual-purpose PoW algorithms? Why have they been created? 9. Is Bitcoin “anonymous” currency? Is it difficult to trace transactions and understand someone’s spending habits? 10. What is Ethereum? What kind of currency does it use? What is the difference from Bitcoin? Chapter 10: Bitcoin security. 1. What is the main approach of Bitcoin security? 2. What are two common mistakes made by newcomers to the world of Bitcoin? 3. What is a root of trust in traditional security settings? What is a root of trust in Bitcoin network? How should you assess security of your system? 4. What is a cold storage and paper wallet? 5. What is a hardware wallet? How is it better than storing private keys on your computer or your smart phone?
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intro to bitcoin and other cryptos (need help in designing class)

I have become the defacto "Bitcoin expert" in my little down of 50,000 people because I'm the only one talking about it (not because I'm an expert by any means). They have asked me to teach an intro class on bitcoin and other cryptocurrencies. I'm charging $5 for the class and giving them $5 back in a crypto currency (was going to be BTC until I saw the transaction times and fees we're dealing with right now). I figured I'd give the people in the front row $25, they pass back $20, they pass back $15, etc until everyone has $5 left. A quick lesson on how to transact using your phone or laptop.
The class will be two hours long plus an hour Q&A session at the end so I'm trying to cover the basics and a few intermediate ideas so should they come across them (like segwit, etc) they at least have a passing knowledge. I will NOT give any investment advice and I will not get complicated/technical.
I've been working on this syllabus for the last two days and would appreciate some feedback... am I missing something? could I explain things better? anything constructive is welcome. I'm sure some of my explanations are incorrect especially with regard to segwit, transactions, etc... any help is appreciated. Each class is 20 people and it's looking like there will be 4-6 classes based on current demand.
a) What is bitcoin?
b) Why does Bitcoin have value?
c) Parts of bitcoin/terms to know:
d) Interesting things about bitcoin:
e) How to buy/sell:
f) Who takes bitcoin?
g) How to keep bitcoins safe:
h) problems and solutions ahead for BTC
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The real and imagined problems with Bitcoin[part1]

The more you read about bitcoin, the more patterns will emerge as to what people think will be the reason bitcoin cannot succeed. Many of these concerns are silly... and others are worthy of further thinking. So in no particular order I shall list them
Perhaps the worst argument of all against bitcoin is that it's creator is a mystery. This is a bad argument. It's like saying that your software calculator is evil or bad because you do not know the name of the programmer who wrote it. Bitcoin is just a program and a program is just a tool. The source code is open and transparent. Everyone involved knows the rules and there is no mystery. So why would no one want to take credit then for the creation of something so important? I can think of one glaring reason among others.... you will notice that bitcoin investors will typically not answer questions about how many bitcoin they own. That's the smart thing to do. It's estimated that satoshi has somewhere between 1-2 million bitcoins. If his identity was known people might try to steal it from him. They might kidnap members of his family or people that he loves. Having that many bitcoins and letting it be known is simply dangerous.
Another silly argument against bitcoins is that it is a ponzi scheme. Bitcoin is no more a ponzi scheme than a stock is. If someone buys a stock and that company starts to go south the stock price will fall and the latest ones to buy in to the stock will lose the most. In a way that resembles a ponzi scheme... but that's all. The only way you could even claim that bitcoin resembles this is if you assume that it's going to fail. So right away anyone who calls it a scheme is telling you that it is going to fail and that they can predict the future.
Another problem frequently cited around bitcoin is its volatility. It has been claimed that bitcoin can't be used as a currency because it is too volatile. The problem with this theory is that reality proves it wrong. Even during the times of its greatest volatility there are still transactions happening. People still use it as a currency. A merchant who accepts bitcoin can tie in with a company like coinbase and immediately convert to cash and assume no risk holding it. Things that are sold for bitcoins can be tied to the price of anything quite easily with simple programs. You could have an online store and have everything priced in bitcoins and have the amounts tied to something like dollars or even gold. This doesn't mean volatility isn't a problem. It can make things pretty inconvenient , but it isn't as big of a deal as some people make it out to be. The reason why is because the volatility of bitcoin is linked to it's userbase. The userbase cannot increase (or decrease) exponentially forever. The amount of people joining or leaving bitcoin won't continually be changing by large amounts in short periods of time. Bitcoin is still in it's infancy so for the time being you can expect volatility. If all of the sudden you had 2 or 3 or 4 times as many people using the dollar as there was days before you would probably be seeing volatility with it too (despite how fast the Fed seems to be at creating new ones) . Just like a stock, the deeper the markets are the less volatility there is.
Intrinsic value is another often cited problem with bitcoin. Some theorists claim that bitcoin needs an intrinsic value to enforce that it will always be worth something. Gold if not used as money can still be used as jewelry. Dollars, although not backed by gold, are backed by men with guns. Some people claim that bitcoin isn't just a currency but rather it is a network and that the intrinsic value of bitcoin is this network. What someone is really saying when they say that money needs intrinsic value is that it needs to be good at something besides being money to be good at being money. That's pretty unnecessary. All that intrinsic value does for gold as a store of value is create a psychological effect. It adds a price floor. But that price floor isn't the actual price and therefore it is only creating a psychological crutch. I'm not saying that it is entirely useless. A psychological crutch adds confidence and confidence is good. But it also adds burden. A money that is backed by something like gold is burdened by gold. Can you still instantly transport it across the world? Could you drop an empty safe in the ocean and then send it into the safe while it was sinking at a depth of over a mile? You can send bitcoins in that fashion. You could keep all the gold in some centralized place and send the money but then... that introduces storage costs and centralization and counterparty risks. Bitcoin obviously has value to some people and it is already used as a currency so to say it can't be a currency because of this reason or that is kind of ignorant.
Many economists claim that bitcoin is doomed because it will lead to deflationary spirals. Why spend something now when you know it's going to be worth more tomorrow? is the oft-cited question. The problem is that economists have certain ideas and they try to fit reality to those ideas rather than their ideas to reality. There are three main counterpoints to this. THe most popular one is that there is a cost in deferring payment. Why buy a computer now when in a year you know you can get a more powerful one for the same price or cheaper? Because you need it now. Another counter point is that with bitcoin a deflationary spiral is essentially impossible because you will never get the whole market to agree that the price is going up. In any market... especially bitcoin you have bulls and you have bears. If the price suddenly rose 10 times you can bet that a lot of people would be trying to get rid of their bitcoins by "buying" goods or dollars with them. Nothing only goes up in value. If it did then it's chart would look like a straight line. Bitcoin doesn't have such a chart. Economists tend to look at bitcoin in isolation when they talk about deflation. But can the sudden and shortlived bubbles that bitcoin experiences harm the economy? If bitcoin was the only currency to exist then you could make the argument that merchants would suffer during these times because there was less spending. But we don't exist in such a world (and nor will there ever likely be a world where the only currency is just 1 digital cryptocurrency) . And even if we did ..... those periods of rapid deflation are not sustainable and short lived.
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NORWEGIAN ALL IN BITCOIN?! Nahmii Interview Basics of bitcoin Keiser Report  A Deflationary Spiral  E1534 - YouTube Спираль дефляции What You Should Know! - YouTube

A deflationary spiral is defined as the economic argument that suggests that deflation eventually leads to the collapse of a currency as a result of the attendant condition and constraints. While this common form of criticism can be made against the viability of Bitcoin, the truth is that the deflationary spiral is a condition that affects standard fractional reserve banking systems. The ... The Bitcoin FAQ website content may be provided via third parties such as Wikipedia and Bitcoin.org and must be carefully researched further as content on those platforms may sometimes be user-generated and/or can change at any time. Bitcoin2140.com makes no guarantees as to the accuracy, thoroughness or quality of the third party content on this Bitcoin FAQ, which is provided only on an “AS ... Now the fact that Bitcoin prices are volatile is a serious problem for Bitcoin. But that volatility has nothing in particular to do with Bitcoin's deflationary "monetary policy." Rather, it has to ... “Demand for gold may taper off if investors display growing concern about a deflationary spiral,” the commodities economist noted. “Given that nominal interest rates have almost reached their effective lower bound, further falls in expected inflation should raise the yields (and lower the prices) of real assets, such as gold. In contrast, other safe havens with fixed nominal coupon ... A deflationary spiral is defined as the economic argument that suggests that deflation eventually leads to the collapse of a currency as a result of the attendant condition and constraints. While this common form of criticism can be made against the viability of Bitcoin, the truth is that the deflationary spiral is a condition that affects standard fractional reserve banking systems. The ...

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Deflationary spiral. Skip navigation Sign in. Search. Loading... Close. This video is unavailable. Watch Queue Queue. Watch Queue Queue. Remove all; Disconnect; The next video is starting stop ... Bitcoin on the other hand is practically a deflationary currency. Deflation constantly increases the value of money, thus discouraging unnecessary consumption and the taking on of debt, whilst ... Remonetizing Gold Is the Only Way Out of the Deflationary Spiral. maneco64. Loading... Unsubscribe from maneco64? Cancel Unsubscribe. Working... Subscribe Subscribed Unsubscribe 28K. Loading ... Keiser Report A Deflationary Spiral E1534 by RT. 25:47. Keiser Report 1533 by Keiser Report. 15:06. Keiser Report Anatomy of a Fiat Currency Collapse E1533 by RT. 25:48. Keiser Report ... Keiser Report A Deflationary Spiral E1534 - Duration: 25:47. RT Recommended for you. New; 25:47 . BITCOIN AND ALTS calls by MIKE NOVOGRATZ. Coverage of Korea Blockchain Week! - Duration: 41:25 ...