But how does bitcoin actually work?

But how does bitcoin actually work?

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The math behind cryptocurrencies.
Home page:
Brought to you by you:
And by Protocol Labs:

Some people have asked if this channel accepts contributions in cryptocurrency form. As a matter of fact, it does:

2^256 video:

Music by Vincent Rubinetti:

Here are a few other resources I'd recommend:

Original Bitcoin paper:

Block explorer:

Blog post by Michael Nielsen:
(This is particularly good for understanding the details of what transactions look like, which is something this video did not cover)

Video by CuriousInventor:

Video by Anders Brownworth:

Ethereum white paper:

Animations largely made using manim, a scrappy open source python library.

If you want to check it out, I feel compelled to warn you that it's not the most well-documented tool, and has many other quirks you might expect in a library someone wrote with only their own use in mind.

Music by Vincent Rubinetti.
Download the music on Bandcamp:

Stream the music on Spotify:

If you want to contribute translated subtitles or to help review those that have already been made by others and need approval, you can click the gear icon in the video and go to subtitles/cc, then "add subtitles/cc". I really appreciate those who do this, as it helps make the lessons accessible to more people.

3blue1brown is a channel about animating math, in all senses of the word animate. And you know the drill with YouTube, if you want to stay posted on new videos, subscribe, and click the bell to receive notifications (if you're into that).

If you are new to this channel and want to see more, a good place to start is this playlist:

Various social media stuffs:

This Post Has 69 Comments

  1. Bhavya Jain

    3blue1brown is greatly underrated

    1. hülye ló

      @Redstone Ewok 2 years ago (when the comment was made) he had less than 200k subs. If you’re trying to be a smartass, first act like one, and do research before commenting.

    2. -System-_ Error#&!

      ​@hülye ló ​ hülye ló Welp, tbh, it doesn’t even take a “research” to figure it out. I mean, common, LinkEX mentioned it in literally this EXACT tred just a few comments above. So all it takes is ONE. f*cking. single. scroll.,
      and knowing how to read f*cking letters.. Sadly, some peaple are too stupid for that, and instead they start answering posts without reading a tred, nor even simply turning their brain on and thinking before saying.

  2. Eli Atkinson

    This is one of the clearest explanations I’ve ever heard of anything ever. Thank you

    1. Scrosseh

      It’s a shame people don’t trade knowledge in such a comprehensible way more often.

  3. Danilego

    can we get an hour long version of that animation with all the 256 zeros slowly filling up with 1s? So satisfying!

    1. Y. Z.

      @Nolan Westrich While true
      Here you go.

    2. Nolan Westrich

      @Y. Z.
      While (1)
      cout << 0;

    3. samuel McDonagh

      God everyone has to be such a smart arse and act like 2^256 is a hard calculation.

    4. Y. Z.

      @samuel McDonagh So how much is 2^256? I’m waiting.

      Hint: most calculators won’t give you the right answer.

    5. Rehan Zafar

      @samuel McDonagh I think u should type 2**256 in python to know the accurate output. Thanks me later 😁😁

  4. Kapin

    Imagine having to actually do this in real life on a ledger…
    “Okay, so I’ll just do some _super complex maths…_ ”
    * Five hours later *
    “Right, now to write down this _super long very specific and vital number…_ ”
    * One hour later *
    “Now to verify the transactions… using _super complex maths…_ ”
    * Five days later *
    “Okay, now to check I ran the numbers right-“

    1. R. M. Tosh

      …except that finding one of those special numbers by hand would take millions of years

    2. lare290

      @R. M. Tosh I mean, if the blockchain was implemented for calculation by hand, the hashes would definitely be shorter.

    3. KuraIthys

      Yep. Can’t do that of course in a world where computers (or even handheld calculators) exist though.

      If you make the blockchain calculable by hand, it’s going to be trivial to crack with a computer. (unless you can find something that is difficult for a computer to process or which is difficult to code a routine for.)

    4. Sebastian Grygiel

      If someone wants to try it for real, you can use a website like this: https://www.devglan.com/online-tools/rsa-encryption-decryption
      – generate your keys
      – all exchange public keys
      – safekeeper creates google form linked to a spreadsheet for ledger line submissions, shares in read only mode
      *To transfer LD:*
      – think of a random number or word, make sure you haven’t used it to do the same transaction before, could use sequential ids or date
      – encrypt a message with your private key “10/10/2020 send 500 ld to bob” – you are free to add any text there (could just leave a signed note with 0 transfer)
      – fill out the form with these fields: your random word, your name, your encrypted message
      You also could have unencrypted fields for the amount and recipient, so you can see it at first glance without decrypting the message having verified it earlier.
      *To verify a transaction:*
      Spreadsheet line contains: “10/10/2020”, “Alice”, “10/10/2020 sending 500ld to Bob”, 500ld, Bob
      – take the encrypted message from the spreadsheet and decrypt it using the public key belonging to Alice (trusted from exchange)
      – if you are able to decrypt the message using Alice’s public key, it must come from her – make sure the ID/date at the beginning of decrypted message matches the ID in the spreadsheet. The spreadsheet should have a formula to check for re-use of IDs, marking transactions invalid.
      – if you cannot verify it, you can submit a new entry describing the situation, with plaintext obscenities instead of encrypted message

    5. Moorma

      @Kapin Maintaining a ledger is actually easier in real life. The only reason this comes across as complex is due to the cryptography involved to prevent people from cheating by fabricating data. How do people think banks balance out at the end of the day? A bank has a ledger (balance sheet) of all money incoming and outgoing. Other banks have ledgers too of all money incoming and outgoing, which some of the transactions will cross over to another bank’s ledger due to their interaction.

      If a bank conducts an audit, its ledger should balance out.

      Scenario 1: If the ledger doesn’t balance out, that means there was an error input by an employee or money was lost/stolen. At that point, the bank must tally everything. If any physical money was involved from the vault, the vault must be recounted. If the ledger is still short, they’ll start the whole process all over again and recount. Eventually an investigation is opened to find out what happened to the money.

      Scenario 2: If the ledger does balance out, that means there were no errors and all monetary transactions were accounted for. What if a ledger balances out, but only because an employee stole $100 from a vault and wrote down that the $100 was accounted for? This malicious activity can’t be hidden for very long because eventually that employee will have to transfer the contents of a vault over to a new owner and it will turn up short, revealing that $100 went missing under the employee’s watch.

      Scenario 3: An entire bank is corrupt, constantly forging ledgers and fabricating financial documentation in order to get everything to balance out after pocketing the stolen money. This malicious activity can’t be hidden for very long because any banks perceived to be involved in malicious activities can be audited by an independent third party and occasionally are subject to an independent audit by a third party regardless of whether or not they were suspected of malicious activities.

      Prior to centralized banking through the creation of the Federal Reserve, individuals bank themselves audited one another. Discrepancies between each bank’s ledger through cross-examination, and any discrepancy between an individual bank’s ledger and financial documentation(s) identified cheaters. Because of decentralized banking, banks could police each other to prevent cheaters. Post decentralized banking, the entity that audits and polices each bank is the Federal Reserve, which also handles the production of money in the United States. The U.S. treasury is supposed to handle the production of U.S. currency, but what happens instead is the Federal Reserve loans money to the U.S. Treasury who then prints physical U.S. currency. The U.S. Treasury pays back that loan (plus interest) to the Federal Reserve, causing the U.S. Government (or American people) to be placed in perpetual debt. For example, if you start out with 0 dollars and I loan you $1 at 10% interest, you would have to pay me back $1 and 10 cents. However, in order for you to pay back that 10 cents interest, you need me to loan you another $1 at 10% interest, so you again have to pay 10 cents on.

      The question, since decentralized banking caused banks to police each other by randomly auditing one another and now centralized banking enables the Federal Reserve as the de facto entity to fulfill this role, what entity audits the Federal Reserve to guarantee it doesn’t turn corrupt and begin creative accounting? The answer is no one. There is no entity. Now you know why the Federal Reserve, established in 1913, for over 100 years, has never been audited. An audit would unveil all the malicious activities going on in the U.S. banking industry and what’s happening with that interest the U.S. Treasury (or American people) are forced to pay.

      Anyways, the Achilles’ Heel for cryptocurrency (something decentralized) other than it being dependent on the Internet (something centralized) is quantum computing. Once developed, a quantum computer would be able to mine any block and would take over the entire blockchain.

  5. Jae Pil Choi

    It is a miracle that I can watch this free. No way I could have known any knowledge at this level without actually paying someone more than $10. The value you’re creating is in-valuable.

    1. Martin Matko

      @Vadim Tikhonov good youtubers with good content should get monay from ads. 3 031 437 Views is a lot and thats should be his payment.

    2. hzhang1228

      @MaRaX93 go sell your ideology elsewhere leech xD

    3. MaRaX93

      @hzhang1228 read a book

    4. hzhang1228

      @MaRaX93 wouldn’t you prefer more sheeple to buy into your ideology? xD

    5. MaRaX93

      @hzhang1228 you’re the sheeple mate, an uneducated moron who hasnt opened a serious political economy or history book in his life and gets educated through corporate platforms

  6. MrBauchnabbel

    “To call it astronomicly large would be giving way too much credit to astonomy.”
    My new favourite quote 🙂

    1. A_WILD_ABRA appeared

      No u

    2. Black Cat

      @A_WILD_ABRA appeared You ruined everything.

  7. Utkarsh Mishra

    Waiting for 3Blue1Crown , i bet itll be better than G.O.T

  8. Patrick Bryan

    Satoshi is a genius……This explanation of his genius, is genius. Subscribed half way through it….

    1. greywolf271

      So logically, Satoshi = 3Blue1Brown

    2. Fabio Pilnik

      I subscribed and now make a video recommending it, just uploaded to channel.

    3. user name taken

      @Yurivel STFU, you have no idea what you’re talking about. Babbling idiot.

    4. Олег Пулемётное Туловище

      @user name taken can you provide some learning materials for learning more about this?

  9. Declan Raphael

    Hey, Thanks for the content ! Saved me a lot of time for the research. In 26 mins i got basically to know crypto without

    reading the news one by one. Thankss

    1. _ Beferrr

      @Patrick Jos ALSO both of these accounts above me are private without any trace of human being using it so I wouldn’t trust whoever that mf is in the slightest. Unless you actually want to get scammed

    2. _ Beferrr

      All 3 of them*

    3. *Steel Beam*

      Dang… 26 minutes??? I’ve been listening to this in full attention for 26 minutes?? This channel is amazing..

  10. Arsel Muginov

    The best explanation of cryptocurrency I’ve seen. I finally understood it! Sharing this on Twitter, you deserve it 👍

    1. Jessie Hayden

      is this sarcasm? lol

  11. Paxton Faz

    By far the best explanation of blockchain I’ve ever seen.

  12. Melancholy Chill

    People are so much smarter than me, it’s absurd.

    1. inafridge

      The people who developed this technology built off of technology that someone before them made, who built that technology from technology someone before them made, and on and on. This is the result of millions of people each learning the giant knowledge pile of little things many people before them have slowly built, and then adding another little thing thing of their own discovery.

    2. Scrosseh

      They probably worked years for archiving their smartness though. (of course there is the exception to the rule, born genius)

    3. Rhodiola110

      Here’s a smart move for you… buy dagcoin as soon as possible!

  13. Arushi Goyal

    I am a person who never writes comments on videos. But after watching this, I simply had no other option than to appreciate the quality of this video. Everything about this video is incredible, the research done and the way of explaining. I am definitely sharing this video with everyone I know and becoming a regular at this channel!

    1. 1

      قمت بعمل صائب

  14. Kadour Yassin

    This explanation feels clear, but I couldnt understand it

    1. the unboxer

      Yeah bro i agree

    2. Fabio Pilnik

      One idea is that blocks of data are “light” but can be made heavy by proof-of-work. By chaining heavy blocks together the structure becomes too heavy to move. Does this make it easier or more confusing?

  15. jareckil

    Now is the perfect time to buy the dip and accumulate irrespective of the bulls being under pressure. The mooning of bitcoin is inevitable and would see the price of bitcoin surpass it’s all-time highs. What better way than to accumulate your holdings as an investor you should have at least 20 btc in your portfolio before the imminent bull run. I trade daily using signals provided by Caleb Easterby and I have been able to accumulate 15 btc in just two months. His signals are prolific, accurate and easy to implement in your own trade. Caleb can be reached via WhatsApp *+31 635250332* or Telegram *@Easterby* for more insights into bitcoin trading.

    1. Micaela Farley

      Awesome you guys have left me in awe this is surprisingly shocking

    2. Yesenia Zuniga

      Keep up the great work Caleb

  16. Martin Matko

    I thought we were renting a computers power for internet money. that should by more logical. and transparent.

  17. Nicholas1100

    Thanks for this very informative video. And a big Thanks to Mr Rogan Colbert for turning my 1Btc into 7Btc with his mining services.
    Reach out to him if you want to earn from bitcoin (Roganfelixcolbert(a)gmaìl-com)

    1. Steve Jones

      I just cleared my student loan.

    2. Lakshay P

      I never believed bitcoin mining was real but now i do

    3. Dowen Mcgovern

      ​ Lakshay P Bitcoin mining is real, just that the machines are costly thats why only few professionals can afford buying it to use for their mining services

    4. Plasmaboo

      this has got to be the most pathetic attempt at scamming people

  18. john smith

    here’s how it works: money goes in.
    bogdanoffs take money.

  19. Vishal Srinivas

    One of the best clear explanations on this subject. No BS, No beating around the bush. On point.

  20. pippotto7777

    Bitcoin is now widely accepted and also a good investment which yields good return on investment but also very volatile and not predictable. So it’s very unwise to just hodl without a good strategy waiting for the price of Bitcoin to skyrocket so you can have a payday which might end up not happening because of the volatile nature of Bitcoin. What you should do as a good investor is to have an efficient strategy of accumulating and increasing your Portfolio if finally, the price sky rockets to the moon you would have a good stock in your portfolio. The only way to achieve this is by trading, am not an expert trader but a smart one because I use the signals and strategies provided by expert and seasoned traders. Here is what I do I trade only a certain amount of my Bitcoin take out 50% profit and hodl the remaining 50% by doing this am increasing and accumulating daily. I was taught this strategy by Mr. Allan Shaw, I have used the services of many expert traders but no one comes close to Allan. His signals and strategies are simple to understand and implement in your own trade and are accurate and efficient. I make 400% return on investment. It gets no better than this I mean I trade make profit and also learn. So for all those looking to do same I urge you to contact Allan on WhatsApp: +48 732121976 or Telegram *(@Allanshaw)* or if you have any inquiries about cryptocurrency.

    1. Van Heath

      I am three months into his system and I don’t plan on leaving any time soon

    2. Vina Snow

      The potentials bitcoin holds is too great for you to just hodl alone thanks to Allan for mentoring me

    3. barylmb

      Allan’s signals are excellent and gives you accurate results

    4. Gilbert Reynolds

      Allan is a true expert trader

    5. Haven Huang

      His signals are sound and accurate

  21. Hi there, all is going fine here and ofcourse
    every one is sharing information, that’s in fact excellent, keep up

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