Thread - Nostr Hypermedia

[ARCHIVED] Jay archived@wisehodl.dev 2 years ago

## Bitcoin and bitcoin. - Bitcoin (capitalized) is a network of computers that store, validate, and append to the Bitcoin Blockchain. - bitcoin (lowercase) is the asset accounted for by the Blockchain. The Blockchain is a public good, in this regard, because it is held by everyone who runs a full Bitcoin node. ## Private Keys and Public Keys - Private Keys are used to sign transactions on the Blockchain. They can authorize the movement of bitcoin from a Public Key generated from the Private Key to any other Public Key on the network. - Public Keys, or addresses, are generated from Private Keys and are used to identify the inputs and outputs of a transaction. The Private Key, when kept secret by its holder, grants the holder sole authority to transact any bitcoin that has been sent to any Public Keys generated by it. In this sense, in "shared objective reality" (a term coined by the Softwar thesis) the holder of a Private Key "owns" the bitcoin it has the authority to transact. Ownership of bitcoin, the asset, is therefore the authority to transact it on the Bitcoin network. Hence the phrase, "Not your keys. Not your coins." If someone else has your private key, they share ownership of your bitcoin because they have the ability to sign transactions to move your bitcoin on the Bitcoin Blockchain.

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karo 2 years ago

expanding on this... (I think, correct me if I'm wrong Jay) if the seed phrase is on one of those metal plate thingies and person A has possession of the thingy and person B knows what the seed phrase is by memorization, then both know the private key to the Bitcoin and thus the "location" of the Bitcoin is within the knowledge of both parties, not just the metal plate. I threw the plate in there to add a layer of physicality. As in there is no tangible, physical "location" for Bitcoins.

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[ARCHIVED] Jay archived@wisehodl.dev 2 years ago

Yeah, that's right. It's like asking, where is the location of a password you use to log into an online account? It could be stored in your brain, as ink on paper, stamped in steel, as a file on your computer, or as a record in a password manager database. These are all physical locations where a Bitcoin private key can exist as well. But where is the "wallet"? The truth is, there isn't one. So it's the wrong question to ask. Bitcoin ownership is the potential for action. It's like a threat: "I can transact from the UTXOs I can sign as inputs. But it's up to me when or whether I will." Software that allows you to make good on that threat are typically called "wallets" because they have the functionality of a real life one.

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