Bitcoin

Managing your Lattice1 BTC wallet

To manage your BTC wallet on your Lattice1 see this article which covers the fully featured BTC wallet on the Lattice Manager.

Creation and Distribution

Although previous attempts at creating a true peer-to-peer digital currency existed, Bitcoin was the first to gain widespread acceptance. On October 31st, 2008, Satoshi Nakamoto published a paper in a cryptography forum titled Bitcoin: A Peer-to-Peer Electronic Cash System. Since Satoshi Nakamoto is a pseudonym, their true identity is still unknown. The Bitcoin blockchain officially started on January 3rd, 2009 when Satoshi mined the first block receiving 50 Bitcoins as a reward for each block mined. The first BTC transactions was Satoshi sending 10 bitcoins to Hal Finney, a fellow cryptography researcher.

The network is called 'Bitcoin' and the currency is most often referred to as 'BTC'.

BTC is created in a process called mining, wherein network participants called miners validate transactions and solve cryptographic puzzles and are rewarded with newly created BTC. The reward for validating and packaging transactions into blocks started at 50 BTC per block but has been cut in half every 210,000 blocks. The current block reward is now 6.25 BTC per block. This geometric progression results in a hard cap to the amount of BTC that could ever exist at 21,000,000 BTC. Currently about 19,000,000 BTC have been minted and the remaining 2,000,000 will take until ~2140 before they are minted.

In the early days of Bitcoin it was fairly easy to earn BTC by setting up your computer to mine on it's CPU or GPU, but since Application Specific Integrated Circuits or ASICs were devised to mine BTC in ever increasingly efficient ways, it is no longer economically feasible for most people to mine BTC. The easiest way to get BTC now is to buy it from an exchange such as Coinbase, Gemini, or Binance.

Design

Although a handful of side-chains do exist for highly specific use cases, BTC and the bitcoin network were created to be a peer-to-peer digital cash system and as a store of value. Those are still its main functions.

A BTC transaction must include inputs from accounts it is to be sent from and outputs which are the accounts that it will be sent to. Each input in a user's transaction must refer to a previously unspent output on the blockchain, this prevents a user from being able to 'double spend' coins in their accounts.

Since transactions can have multiple inputs/outputs as shown in the diagram below, users can send bitcoins to multiple recipients in one transaction from more than one of their own addresses. Just like a cash transaction, the inputs (coins used to pay) can exceed the intended sum of payments. In such a case, an additional output is used, returning the change back to the sender. There is also a small transaction fee paid to a miner for including the tx in a block.

There are technically no decimal places on the Bitcoin blockchain, and amounts are displayed with them for the end user's sake. A single BTC is actually 100 million Satoshis which is the atomic unit of BTC which cannot be subdivided further.

Usage

A typical use of Bitcoin is to buy it and hold it for long term store of value. Users that do this typically use some form of cold storage (also referred as cold wallets) which keep their private keys, and control of their coins, safe from internet-based attacks.

Using cold storage is safe and great for long-term storage for coins that are not expected to be transacted in the near-term, but what if a user wants to store and spend coins? Hardware wallets are a great way to store and spend BTC. Hardware wallets keep private keys offline but still allow a user to sign transactions generated by their internet-connected computer.

Most hardware wallets make frequent transactions a frustrating experience, either because they are tiny and lack meaningful screen output to confirm txs are going where one expects. The Lattice1 hardware wallet provides a large touchscreen to easily confirm txs on while at the same time keeping private keys safely offline in a tamper-resistant package, allowing for the ease of use of a hot-wallet but the security of cold storage.