My Bitcoin, Litecoin, and other cryptocoin adventures
Here’s an explanation of the malleability punt of Bitcoin and what it truly means for you.
Let’s say you hire Jane Plumber to fix your bury for $100. After Jane completes hier work, you write a check for $100, sign it, and send to Jane, thinking nothing of it.
Upon receiving the check, Jane annotates the check te some insignificant manner, for example by stamping it or writing a note that it has bot received. She then sends the check to the handelsbank to get the $100 deposited.
Te Bitcoin, the check is analogous to a transaction. It is a signed statement from you that you want to transfer an amount to someone else. To announce that you intend to do so, you publish a cryptographically unique signature, or ter this analogy a unique pic, so that anyone can see that you intend to pay Jane $100.
All of thesis photos or transactions are stored ter the Bitcoin blockchain which is a public ledger of all transactions made by anyone. Te this analogy each transaction is a picture of a check, a check signed by you, but that can be published to the public ledger by anyone who has that check.
Spil such, when Jane annotates the check, she can also publish the annotated picture of the check. The annotated check does exactly the same thing, it withdraws $100 from your account and transfers to Jane. However, because of the annotations, the pic that Jane publishes is different from the one you publish.
Albeit there are two check pictures published, only one of the photos will be accepted by the bankgebouw or ter this case the Bitcoin network. The details of how this happens is beyond the scope of this explanation, but involves a transaction history which ensures that you cannot give away the same dollar twice.
However, a malicious attacker can exploit this if you are a bit naive. If Jane’s picture is the one accepted, Jane can call you and say that she never received the check. When you then go into the public ledger and search for your original picture, it is nowhere to be found because it wasgoed Jane’s photo that got accepted.
If you are naive, you may then write Jane a fresh check, and she can withdraw your $100 twice, once for each check you sent hier.
If this happened outside of Bitcoin, it would be very plain to check whether Jane wasgoed telling the truth. You can simply check your handelsbank statement and see whether the charge for the individual check has bot posted to your account. If so, Jane is lounging and you can simply overlook hier request.
Ter fact, even te Bitcoin, if someone claims that they have not received the funds you sent, it would be effortless to check the balance of your address to see whether the funds are gone and thus have bot sent. You may not find your original transaction, but you will find the transaction that sent the money and you could present that to Jane spil evidence that the money has left your account and has bot received ter hier account.
The malleability component of Bitcoin is the protocol’s capability to interpret the intent of the check, so to speak, even if it has bot annotated with certain lumps of information or decoration. It is still the same check designed to do the same thing, but it looks a bit different than when you originally signed it.
Please also note that albeit you can make plain switches to a check or Bitcoin transaction, any switch that is of importance, such spil the sum you want to pay or to whom you send the money, can not be switched. If you attempt this, Bitcoin requires a fresh signature from you, and it’s not spil effortless spil just copying the signature from a paper check.
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