Post
Topic
Board Beginners & Help
Re: Newbie questions
by
Murf
on 23/04/2013, 17:13:35 UTC
Everytime I think I understand Bitcoin, things get fuzzy.

First, Bitcoins are not unique items, you cannot identify one Bitcoin from another, in fact that statement almost makes no sense.  Bitcoins are values that are assigned to addresses.  The addresses are unique and each address has a currently Bitcoin value and transactions transfer values between addresses.

Secondly,  it seems the whole system works because all the participants agree to play by the same rules.  What prevents a rule change if everyone agrees to it.  Changing how many bitcoins are given to miners, how much the difficulty changes, etc.  they are arbitrary.  What if a majority agree to a rule change?

Lastly, I read about Bitcoin theft.  If I have a wallet of addresses that is backed up.  A virus penetrates the wallet and transfers all my Bitcoins to some other address.  Since I have the original addresses, I can see where they went.  If I clearly demonstrate the above to the Bitcoin community, what's preventing the Bitcoin community from disallowing any transactions from any address that received my stolen coins?  Yes it would be difficult to convince everyone but is it theoretically possible?
Bitcoins are the chain from generation to the current address. every step in that chain is signed by the sender. (your wallets private keys on the address where you recieved the coins) This transaction is kept on a distributed ledger (p2p bitcoind etc etc) In regards to the stolen the transaction is signed by you thus allowing for the transfer to happen. Yes it is possible to trace all the transactions. But any smart thief will mix the coins to get "new" coins aka not tainted by the theft quite quickly. It will also be impossible to stop a transaction from happening without breaking the rules.

For more info read up on
https://en.bitcoin.it/wiki/How_bitcoin_works
https://bitcointalk.org/index.php?topic=2487.0

And please google there are more than a ton of informative articles out there.
please correct me if im wrong!

edit. Found some more info to read up on! (more links)