I’ve got to this point reading various blogs, articles, other stackexchange threads and watching Youtube videos on the subject and still have a ton of questions. I don’t expect the questions below to be answered here, they are just for illustrating my level of understanding and what I’m confused about. What I’m really asking here is to be pointed to an online resoursce (tutorial, lecture, course, etc), that can help me answer ALL these questions below:
1) Ok so I keep hearing about creating a wallet. And just about every resource I’ve come across goes into talking about using something like blockchain.info or coinbase or some site. Now to my understanding, the wallet is essentially made up of two components: the private and public key. So creating a wallet (account) on a site means I’m pretty much allowing the site to know what my private key is, correct? Don’t want an ethical discussion here. Technically speaking, they have my private key correct? If so, how is a bitcoin wallet created this way different to online banking except with no insurance, because it’s some random 3rd party site? I must be missing something here, surely...
2) Next I hear about mining. Being rewarded for solving complex mathematical puzzles and what not. “Complex”? Really? Are they like...differential equations or NP-hard problems? So just, trying a new nonce? Is that really all there’s to this “complex puzzle”? Trying random numbers till something works?
3) Then I hear about specialised mining hardware, and mining farms, and what not. Guessing it’s all to do with (2) above. But what about the actual ‘verification’ bit with transactions? Is that automated too now or?
4) “When a group of transactions is verified and the proof or work done, a new block containing these transactions is added to the block chain once it receives sufficient confirmations”. Oh dear lord, where do I even begin asking about this one. Let’s see...which transactions does one ‘select’ to verify and put in the next block, what happens when someone else creates another block containing some of the transactions you’re attempting to verify as well, what actually does a block contain, is it a hash of all transactions or, wtf confirms a block, is that even a thing, who does that, what’s their incentive? Head exploding People invest in this without knowing all these details, really!? https://m.youtube.com/watch?v=6HFtk29k7-Y
5) “When you send bitcoins to an address, the transaction is broadcast to the network”. What network, how is it broadcast, is there some API that gets called with a request or? Is there some software I MUST download to become a node in this network?
6) Merkel trees. What now?
Ok, so hopefully that gives a good indication of where I’m at. Need help.
