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Unlocking Knowledge: Bitcoin in Plain Language
This series continues to translate the original white paper by Satoshi Nakamoto to plain language. The goal is to have easily shared content, reacquaint bitcoiners with Satoshi's vision, and explain things in an accessible way everyone can understand. The original content will be posted, with the plain language below.
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Firewall - A layer of protection in between a person, their computer, and the Internet. Firewalls can filter, block or allow certain kinds of information to be sent in, or sent out.
Multi-Input Transactions - Transactions that need to be combined to reach a certain amount of bitcoin. Like using two $100 bills for an item that costs $189, you are combining the two large bills, creating one transaction. The cashier knows you had at least $200, and so did everyone in the store that saw that transaction.
10. Privacy Paragraph 2
As an additional firewall, a new key pair should be used for each transaction to keep them from being linked to a common owner. Some linking is still unavoidable with multi-input transactions, which necessarily reveal that their inputs were owned by the same owner. The risk is that if the owner of a key is revealed, linking could reveal other transactions that belonged to the same owner.
Plain Language
Continuing with our puzzle game analogy, think of each transaction as a puzzle you want to solve. Instead of using the same puzzle-solving strategy every time, you decide to use a different strategy for each new puzzle. Each time you play the game, you use a new technique to solve the puzzle, making it unique. These are the key pairs for transactions.
The tricky part: if you have a few puzzle solutions that are connected, and someone figures out how you solved one of them, they might guess how you'd solve the others. It's like if you have a series of puzzles, and each puzzle gives a clue about how you solve the next one. Transaction key pairs should be unique.
To make sure your own puzzle solving techniques stay hidden, it's a good idea to slightly change some rules for each puzzle problem...but while keeping within the general rules of the game. This way, even if someone cracks one puzzle, it won't help them figure out the solutions to the others. It's all about keeping each puzzle separate and not letting anyone connect the dots to reveal the whole picture.
Sometimes people want to have reoccurring transactions, like an automated bank withdrawal. The risk here is your information (on the blockchain) always stays the same, and everyone can see how you've accumulated a certain amount of bitcoin. Generating new information each time, or even occasionally, will make it more difficult to trace certain things back to one person.
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