Bitcoin protocol and transactions
For months, I’ve been running OpenClaw — a personal AI assistant integrated with Telegram that monitors my crypto portfolio and handles daily tasks. Initially, I used Anthropic’s Claude Sonnet, but the recurring costs add up fast for a 24/7 agent. OpenRouter’s free tier provides access to capable open-source models like Qwen and Llama at zero…
A crypto option gives you the right — but not the obligation — to buy or sell a cryptocurrency at a fixed price before a set date. Unlike a futures contract, where you’re locked in, an option lets you walk away if the trade goes against you. Your downside is capped at the premium you…
Crypto futures are contracts to buy or sell an asset at a predetermined price on a specific expiry date. They function similarly to traditional financial futures but operate within crypto markets. Key characteristics: Expiry dates: Set end dates, typically weekly, quarterly, or annual contracts Price convergence: As expiry approaches, the futures price converges with the…
Cryptocurrency is a digital currency secured through cryptography and typically operating on decentralized blockchain networks. Unlike government-issued fiat currencies, cryptocurrencies derive their security and validation from distributed consensus mechanisms rather than central authorities. From Speculation to Real-World Infrastructure Early cryptocurrency adoption was primarily speculative. By 2026, the market has matured into genuine utility across multiple…
In decentralized networks like Bitcoin and Ethereum, temporary forks are an inevitable part of consensus. They happen when two miners or validators produce valid blocks at nearly the same time. The sequence looks like this: Simultaneous Discovery: Miner A and Miner B both find a valid Block 100 independently Network Propagation: Some nodes receive Miner…
Segregated Witness (SegWit) is a Bitcoin protocol upgrade activated in August 2017 that restructured how transaction data is encoded and validated. It’s foundational to modern Bitcoin usage and essential for understanding current fee dynamics and layer 2 scaling. How SegWit Works Bitcoin transactions contain two main components: the transaction structure itself and the cryptographic signatures…
Every Bitcoin transaction consists of two main components: Inputs (UTXOs): Unspent Transaction Outputs from previous transactions that you’re now spending. These are references to outputs you received earlier. Think of them as specific bills from your wallet you’re handing over. Outputs: The destinations and amounts for the Bitcoin. This includes the recipient’s address and the…
Proving ownership of a multisig address differs fundamentally from proving ownership of a standard single-key wallet. With multisig, there’s no single private key to demonstrate. Instead, you need to prove control over enough keys to satisfy the wallet’s m-of-n threshold (for example, 2-of-3 or 3-of-5). The Core Challenge In a 2-of-3 multisig setup, you might…
Proof of Ownership is a cryptographic method to demonstrate control over a Bitcoin address’s private keys without moving funds or exposing the key itself. It’s essential for withdrawals to new addresses, OTC trades, collateral verification, and exchange account recovery. How Digital Signatures Work The mechanism relies on public-key cryptography: Challenge: A verifier (exchange, lender, service)…
Multisig (multisignature) is a cryptographic mechanism that requires multiple private keys to authorize a blockchain transaction. Think of it as a vault requiring two or more keys to open — no single key holder can move funds alone. How It Works A multisig wallet uses an m-of-n formula, where m is the number of signatures…
In distributed systems like blockchains, consensus is the mechanism by which all nodes agree on a single version of the ledger state. Without it, a decentralized network falls apart—you’d have conflicting transaction histories, double-spending, and no way to determine which version is authoritative. Consensus algorithms solve this by providing cryptographic or economic guarantees that make…
Double-spending is the fundamental vulnerability of digital currency: unlike physical cash, digital information can be copied. If you send me a digital file, I have it and you still have it. Money can’t work that way. Without a mechanism to prevent spending the same unit twice, the entire system collapses into worthlessness. Blockchains exist, at…
A 51% attack happens when an entity or coalition controls more than 50% of a blockchain network’s total hash rate (in Proof-of-Work systems) or stake (in Proof-of-Stake systems). With this majority control, the attacker can: Reverse recent transactions — spend coins, then revert the transaction to regain them Block legitimate transactions — prevent certain addresses…
Proof of Work is the consensus mechanism that secures Bitcoin and a handful of other major blockchain networks. Introduced by Satoshi Nakamoto in 2009, it requires network participants (miners) to solve computationally expensive cryptographic puzzles. The first miner to solve the puzzle earns the right to add the next block of transactions and receives a…
Ethereum is a decentralized, open-source blockchain platform enabling developers to build and deploy smart contracts and decentralized applications (dApps). Launched in 2015 by Vitalik Buterin, it functions as a global computational network—code executes exactly as programmed without downtime, censorship, or third-party interference. Key Milestones 2013: Vitalik Buterin publishes the Ethereum Whitepaper 2014: Public crowdsale raises…
Decentralization is the transfer of control and decision-making from a centralized entity—typically a company, government, or institution—to a distributed network of participants. In practice, this means no single actor can unilaterally control the system, change its rules, or shut it down. The Three Dimensions of Decentralization When evaluating whether a system is actually decentralized, consider…
A cryptographic token is a digital asset issued on top of an existing blockchain. While Bitcoin is the native coin of its own chain, tokens like USDC or Chainlink (LINK) typically run on other chains such as Ethereum or Solana. Tokens are created through smart contracts and represent value, ownership, or access rights—all verifiable and…
A Non-Fungible Token (NFT) is a unique digital certificate stored on a blockchain. Unlike cryptocurrencies like Bitcoin (which are “fungible,” meaning one Bitcoin is identical to another), every NFT has a unique identifier that distinguishes it from all others. Think of it like a signed baseball card or a deed to a house. You can…
A cryptocurrency is a digital currency secured by cryptography and typically built on blockchain technology. Unlike traditional fiat money issued by central banks, most cryptocurrencies operate on decentralized networks where transactions can occur directly between peers without intermediaries like banks. Key Asset Categories in 2026 Store of Value & Currency Bitcoin (BTC) remains the dominant…
Bitcoin is the world’s first decentralized cryptocurrency. Launched in 2009 by the pseudonymous Satoshi Nakamoto, it functions as a peer-to-peer electronic cash system that operates without banks or intermediaries. Anyone with an internet connection can send value anywhere globally in minutes. Timeline 2008: Satoshi Nakamoto publishes the Bitcoin whitepaper, “Bitcoin: A Peer-to-Peer Electronic Cash System”…