The Bitcoin White Paper: Transactions

Submitted by Aaron Goldstein on

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Aaron Goldstein

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The Bitcoin White Paper: Transactions

After watching the interview between Dr. Craig S. Wright and Ryan X. Charles where they discuss the Bitcoin White Paper in its entirety, you might walk away with a better understanding of Dr. Wright’s original intended purpose for creating Bitcoin. The two discuss several topics that branch off from the original discussion to help you gain the right answers to the question “what is Bitcoin”. 

When talking about Bitcoin transactions, it is clear that Bitcoin has made some changes from the original protocol. Transactions were meant to be signed and verified between users. Each user could verify the other when entering into the transaction through IP to IP and direct exchange. 

bitcoinsvprotocol.png

At some point, the core developers removed this from the program. It is thought that this was done to preserve anonymity within the system. With anonymity, comes a potential issue of attracting those individuals whose intent is more criminal than honest. For example, someone looking to launder money might be drawn to this type of system. 

The core developers later created SegWit or Segregated Witness. This creates a sidechain where identity or witness information about a transaction is stored away from the blockchain. They say their intent was to create a greater level of security within Bitcoin by eliminating malleability of transactions.  

Malleability happens when one of the one of the people involved in a transaction, say the receiver, makes a change to the sender’s witness data before the transaction is verified. It does not change the original transaction from the viewpoint of the sender. This allows the receiver to tell the sender that they never received the transaction when in fact they had. We can go into more detailed discussion about this in another article. 

They also touted by removing this data from the transactions, it would take up less space on the blockchain and increase scalability within the blockchain. Bitcoin creator Craig Wright believes that their intent was more focused on breaking the chain of signatures thus making it less traceable and overall less auditable. If true, this would be a polar opposite of the core developers’ claims. 

One of the big moments in this discussion between Craig and Ryan is when Craig stated if he had not openly challenged the core developers on many of their intended changes to the protocol, there would likely be no valid version of Bitcoin as it were. His original plan for Bitcoin was for an open, honest and legal method for individuals to process transactions between each other. That has taken a few turns as some changes to the protocol by developers have taken place.

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