Bitcoin
$9,242.79 0.51%
BTC · 35w

WTF is an SPV and Why Satoshi put it in the Bitcoin Whitepaper

Simple Payment Verification, usually abbreviated to SPV, is a system outlined in the original Bitcoin Whitepaper that enables light clients (wallets running on low-end systems) to verify that a transaction has been included in Bitcoin and therefore a payment has been made.

This is possible because, when Satoshi designed Bitcoin, he used a data structure called Merkle tree to store the transactions in each block.

A Merkle tree is nothing fancy tho, it’s just a structure created by grouping all the transactions in pairs and hashing them together, then proceeding to hash the resulting hashes together and continuing this process till there is only one hash left, called the merkle root.

This creates a tree where every node has two children, which can be used to create their parent node.

Now, the cool thing about merkle trees is that someone that only knows the merkle root/top hash can verify if a transaction is part of the tree, that is, if it’s been included into a Bitcoin block.

This is done by taking the nodes that are in the path that connects the merkle root with one of the bottom transactions and bundling them together to create a proof:

With that proof, our original user that only had access to the top hash can follow the path back to the roots in a verifiable way, he can check that Hash1 and Hash0 hashed together generate the top hash, meaning that Hash1 and Hash0 are it’s legitimate children, then apply this same check to Hash0–0 and Hash0–1, thus asserting that these two are also part of the original block, and, finally, check that L1 is the source of Hash0–0, proving that L1 is included in the block, therefore confirming it as an accepted Bitcoin transaction.

Why are SPV proofs so important?

SPV proofs might not seem to be that big of a deal, after all you can verify Bitcoin transactions by running a full node, why’d you jump through all these hoops to do just the...

Continue on hackernoon.com
Recent news
BTC +0.51% · themoneymongers.com · 10h

What Is A Bitcoin Nonce [Simple]?

We talked about Bitcoin’s proof of work system in which the Bitcoin miners engage to earn their lotteries, i.e. Block reward of 12.5 BTC. A vital part of Bitcoin’s proof of work system is Bitcoin Nonc...
BTC +0.51% · themoneymongers.com · 10h

Bitcoin Hash Functions Explained Simply !!

If you are into Bitcoin or cryptocurrencies, you often must have heard terms such as ‘cryptographic algorithms’ or ‘hash functions’ or ‘Bitcoin hash.’ Have you ever wondered what they are? Well, I gue...
BTC +0.51% · themoneymongers.com · 10h

Best Bitcoin & Blockchain Documentaries In 2020

Wanting to watch some of the best bitcoin and blockchain documentaries? Well, then you are in the right place because we have got you covered. With thorough research and due to our own interest in the...
BTC +0.51% · earnbtc.cc · 11h

The Secret Service on tracking Bitcoin and cybercrime

The US Secret Service is one of the most enigmatic and entrenched law enforcement agencies in America; now, in a one-off interview, the service has revealed its views on cryptocurrency and cybercrime....
BTC +0.51% · earnbtc.cc · 17h

Why is Bitcoin’s supply limit set to 21 million?

Like many other cryptocurrencies, Bitcoin (BTC) was designed around the principle of a finite supply. That means there’s a fixed upper limit on how many Bitcoin can ever come into existence. In Bitcoi...
BTC +0.51% · academy.binance.com · 20h

An Introduction to Bitcoin Script

Inside Bitcoin is a scripting language dictating how funds can be spent and by who. Learn more about Bitcoin Script at Binance Academy.