Bitcoin & The Information Technology Network Protocols
Information Technology Network Protocols power the digital world what we all simpistically call “the internet”.
The internet is a complex web of protocols that serve as the silent architects, ensuring seamless communication and data exchange for all our favorite websites and apps.
What is a protocol?
A protocol is a set of rules or procedures for transmitting data between electronic devices.
In order for computers to exchange information, there must be a preexisting agreement as to how the information will be structured and how each side will send and receive it.
The core protocols that make up the internet include; TCP, IP, FTP, SMTP, UDP, HTTP, DNS, TSL, SSL to name a few.
Let's unravel the intricacies of some of the fundamental protocols that make up the backbone of the internet.
TCP: Transmission Control Protocol
Often hailed as the foundation of reliable communication on the internet, TCP ensures that data reaches its destination accurately and in the correct order.
It establishes a connection between devices, breaking down large files into packets for efficient transmission.
IP: Internet Protocol
IP, in conjunction with TCP, forms the basis for routing data across the internet.
It assigns unique addresses to devices, allowing routers to direct information to the correct destination. IPv4 and IPv6 are the two versions in use today.
FTP: File Transfer Protocol
FTP facilitates the seamless transfer of files between computers on a network.
Whether you're uploading a website or downloading a document, FTP ensures a secure and efficient transfer of data.
SMTP: Simple Mail Transfer Protocol
At the heart of email communication, SMTP governs the sending of emails.
It directs messages from the sender's server to the recipient's, ensuring the reliable delivery of electronic mail.
UDP: User Datagram Protocol
Unlike TCP, UDP prioritizes speed over reliability.
It is ideal for real-time applications like video streaming or online gaming, where a small amount of data loss is acceptable in exchange for reduced latency.
HTTP: Hypertext Transfer Protocol
The foundation of data communication on the World Wide Web, HTTP governs the transfer of hypertext, allowing for the seamless display of web pages.
Its secure counterpart, HTTPS, employs encryption for added protection.
DNS: Domain Name System
DNS translates user-friendly domain names into IP addresses, making it easier for us to access websites.
It acts as the internet's phone book, ensuring that when you type a URL, your browser knows where to find the corresponding web server.
TLS: Transport Layer Security and SSL: Secure Sockets Layer
These cryptographic protocols provide secure communication over a computer network.
They encrypt data during transmission, ensuring the confidentiality and integrity of sensitive information, such as personal details or financial transactions.
All of these protocols and many others provide the rules and processes to bring our digital world alive.
For years, the one missing protocol was the digital money protocol.
Bitcoin: The Money Protocol
The money protocol is a meticulously defined set of rules and specifications that govern the seamless operation of the Bitcoin network.
This framework serves as the rules for creating, validating, and facilitating direct transactions among peer to peer participants, eliminating the necessity for intermediaries. It also provides the rules for how the issuing of bitcoins is carried out collectively by the network.
Bitcoin is open-source software; its designed is public, nobody owns or controls Bitcoin and everyone can see the code and take part in it’s development.
The Bitcoin is the money protocol for our digital world.
This decentralized architecture ensures heightened security, transparency, and autonomy in like nothing ever before it.
The Bitcoin Protocol rules
Ever since Bitcoin was first designed, the following consensus rules were establish and continue to exist to this day:
21,000,000 Bitcoins to ever be produced
Target of 10-minute block intervals
Rewards halving event occurring every 210,000 blocks (approximately every 4 years)
Block reward which starts at 50 and halves continually every halving event until it reaches 0 (approximately by year 2140)
Bitcoin Decentralized Consensus
All our current payment methods require a trust model with a central authority that acts as a clearing house.
How can everyone on the global network agree to a single universal truth about who owns what without a central authority providing "trust"?
Bitcoin has no central authority. No CEO or board of directors.
Every full node has a complete copy of the global public ledger. Collectively they can arrive at the same conclusion and assemble a copy of the same public ledger.
How is consensus reached?
Consensus is an emergent artifact of the asynchronous collaboration of thousands of nodes all following the protocols simple rules.
Consensus emerges from these 4 processes.
1) independent verification of each transaction by every full node on the network.
2) independent aggregation of those transactions into new blocks by mining nodes through proof of work algorithm.
3) independent verification of new blocks by every node and assembly into a chain.
4) Independent selection by every node of the chain with the most cumulative computation demonstrated through proof of work.
Before transactions are forwarded to other nodes, it verifies it against a long list of criteria. It looks at syntax, null inputs and 18+ conditions it must meet.
There is more to it but you get the idea that Bitcoin is just the next evolution of the protocols that make up the digital world we call the internet.
All of these protocols seamlessly collaborate behind the scenes, shaping our online experiences and underpinning the interconnected world upon which we rely.
Let me know if you have any questions.
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