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Ever wonder how Bitcoin (and other cryptocurrencies) actually work?

71928 ratings | 2255913 views
Bitcoin explained from the viewpoint of inventing your own cryptocurrency. Videos like these made possible by patreon: https://patreon.com/3blue1brown Protocol Labs: https://protocol.ai/ Interested in contributing? https://protocol.ai/join/ Special thanks to the following patrons: http://3b1b.co/btc-thanks Some people have asked if this channel accepts contributions in cryptocurrency form as an alternative to Patreon. As you might guess, the answer is yes :). Here are the relevant addresses: ETH: 0x88Fd7a2e9e0E616a5610B8BE5d5090DC6Bd55c25 BTC: 1DV4dhXEVhGELmDnRppADyMcyZgGHnCNJ BCH: qrr82t07zzq5uqgek422s8wwf953jj25c53lqctlnw LTC: LNPY2HEWv8igGckwKrYPbh9yD28XH3sm32 Supplement video: https://youtu.be/S9JGmA5_unY Music by Vincent Rubinetti: https://soundcloud.com/vincerubinetti/heartbeat Here are a few other resources I'd recommend: Original Bitcoin paper: https://bitcoin.org/bitcoin.pdf Block explorer: https://blockexplorer.com/ Blog post by Michael Nielsen: https://goo.gl/BW1RV3 (This is particularly good for understanding the details of what transactions look like, which is something this video did not cover) Video by CuriousInventor: https://youtu.be/Lx9zgZCMqXE Video by Anders Brownworth: https://youtu.be/_160oMzblY8 Ethereum white paper: https://goo.gl/XXZddT Music by Vince Rubinetti: https://vincerubinetti.bandcamp.com/album/the-music-of-3blue1brown ------------------ 3blue1brown is a channel about animating math, in all senses of the word animate. And you know the drill with YouTube, if you want to stay posted on new videos, subscribe, and click the bell to receive notifications (if you're into that). If you are new to this channel and want to see more, a good place to start is this playlist: http://3b1b.co/recommended Various social media stuffs: Website: https://www.3blue1brown.com Twitter: https://twitter.com/3Blue1Brown Patreon: https://patreon.com/3blue1brown Facebook: https://www.facebook.com/3blue1brown Reddit: https://www.reddit.com/r/3Blue1Brown
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Text Comments (3463)
Arjeet Agarwal (4 hours ago)
Informative video about cryptocurrency.. Great graphics...
Steve Nippress (1 day ago)
https://www.facebook.com/bitcoins4al
hy nguyen (2 days ago)
wow. best explain i have ever watch.
hy nguyen (2 days ago)
i wish i can spam you like button more
Mehul Gupta (2 days ago)
But I did not get how does the value of Bitcoin vs real money fluctuate? And moreover is everyone's entry in ledger broadcasted to everyone else's ledger in the world? Because considering the limit on amount of transactions per second this becomes unfeasible of sorts as a currency.
SAL (4 hours ago)
Same way as gold and stocks - value fluctuates based on global market demand. yes, broadcasting every ledger entry to every node is inefficient, but it ensures total global consensus of the ledger. the idea to scale will depend on building 2nd layer technologies, such as the lightning network to get hundreds of thousands of transactions per second.
Gary Du Charme II (5 days ago)
The only thing I still dont understand is how bitcoin becomes a real currency that is exchanged with dollars/euros/etc. Like the functionality makes sense and how you create it/ add more to it. But how does it have any value compared to real money?
SAL (4 hours ago)
it has real value based on the desire of people worldwide wanting to accept it and hold it.
Ajay Joshi (5 days ago)
Incredible
Jérôme Blanchet (5 days ago)
Put Andreas Antonopoulos Book's Mastering Bitcoin into this kind of video, and you will it billions view
Ahmed Sadman (7 days ago)
Undoubtedly the best video on cryptocurrency
Rian Doren (7 days ago)
Free miner BTC in mac os https://www.youtube.com/watch?v=rVyFvVReN5Y
Sanket Itnal (9 days ago)
Coming to 7:00 minutes. What if Alice disapproves to sign the transaction ?
SAL (4 hours ago)
if no signing, then no transaction will take place from alice to bob.
Arnav Rawat (9 days ago)
Man your videos are a relief from the bullshit of the real world
Steven Roy (10 days ago)
Technocratic totalitarianism is the end goal.
PartimeVillian (11 days ago)
Sweet baby Jesus, it finally makes sense! Thank you my dude!
Antonio (13 days ago)
Niobio Cash (NBR) is a Brazilian digital currency, see in this video the president-elect bolsonaro talking about niobium, enjoy and acquire this promising currency @ @t
J.R. Vasquez (13 days ago)
As usual, excellence. Thank you 3B1B!
Bismuth LD (13 days ago)
Basically, figure out how to reverse enginere SHA256 and you own the world. You could set up a computer to reverse enginere the hash function, then win the bitcoin lottery every single time.
jeff mcdonald (15 days ago)
Great job. I'd love to see you go over Proof-of-Stake at some point.
Nikishiva Kumar (16 days ago)
Honestyworkforcriptocoinsjiptocoinsmekinocoinsblakchin
Vishal Lavania (16 days ago)
10 years, phew!
Kevin Phoenix (17 days ago)
Bitcoin is more like money 💵 than any other money 💶 ever conceived 🏦
Kadri Vatman (17 days ago)
Thanks for the great video! Concerning the Proof of Work, what defines the number of zeros at the beginning of the hash? Thanks!
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Bryan Bowen (21 days ago)
A quantum computer could easily reverse engineer this system.
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Sam
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Antony Jr. (23 days ago)
What happens if all the miners get together and plan to help a single account to get all the money (for them to share it later) , All they need to do is to create new block chain entries which can be done in a day with that much computational power(I mean all the miners in the world combined) , Lets assume even the new miners agree to this since they get a share of the sum , Will it not make the system break ? I'm just curious.... I think that won't happen in a life time right ? or What if we stopped paying miners , and they turn on us(And eventually destroy all true data , and by the protocol , it will only choose the fraudulent branch because its the largest) ?
SAL (21 days ago)
Miners don't have power to forge transactions (even if they all teamed up). Transactions REQUIRE the sender to supply a valid digital signature, miners are simply not able to forge that signature. If they tried, then they will fork themselves into a brand new blockchain that no one else uses (it will be a new blockchain following broken consensus rules). To ensure you stay on the valid blockchain (regardless of what miners try to pull), you should run a full node on your own computer! By running a full node, you are validating all the work the miners do (constantly watching for any rule breaking). Once you keep studying this tech, it should become clear that miners have very limited power to cheat/alter the rules.
Jae Pil Choi (23 days ago)
It is a miracle that I can watch this free. No way I could have known any knowledge at this level without actually paying someone more than $10. The value you're creating is in-valuable.
Erwinson Pagtalunan (23 days ago)
This is an amazing video. I actually learned many things. Thank you for making videos like this!
Bharat Mallapur (24 days ago)
Mind blowing.. Superb explanation and to top it all, the sponsor is Protocol Labs which makes really awesome open-source software... What's not to LOVE about this video?
School Bus (24 days ago)
Thank you for this video, I got one question though. What happens to the transactions/blocks that are in a faulty or short chain? Are these considered as false and should be redone?
SAL (21 days ago)
If they transactions are valid, they will be picked up by miners and included in a block on the longest chain.
Shreyas Mahajan (25 days ago)
recently there has been a hackers attack on cryptocurrencies and 571M USD were stolen... can you explain how they managed to do so when blockchains are so secure & distributed?
Shreyas Mahajan (21 days ago)
+SAL ok! That's why they were able to steal it with simple attacks like phishing! Thanks!
SAL (21 days ago)
it comes down to an issue of private keys (these are not stored on the blockchain). basically, if you are sloppy with securing your private keys, then it is really your own fault. The story you read was likely about an exchange getting hacked - which leads to rule number 1: don't trust others to hold your coins for you!
Okabe Rintarou (26 days ago)
5:42 are you talking about RSA encryption?It sure resembles me of it.
JAGADISH K J (26 days ago)
https://cudominer.com?a=VuXfAH4Z8V
Jean-Luc's Edits (27 days ago)
Fucking amazing, Thanks :D
Nathaniel Gentile (27 days ago)
Will we see a similar video on proof of stake?
smile444 (27 days ago)
it is possible for someone to get 50% or more of the rpocessing power and start messing with the ledgers ?
Amir Barouh (27 days ago)
charlie made 674 accounts to dislike this video.
Setanjan Roy (28 days ago)
While I am still not fully clear on how it all works this video certainly makes it much more clear than all those articles with unnecessarily fancy words but ultimately vague actual content that does not explain blockchain at all.
Luca Giovanni (28 days ago)
Hey, I need to make a presentation to introduce cryptocurrencies to some high-school students and I was wondering if it would be a problem if I explained it using your same train of thought. I'm creating my own graphics and will obviously give credit to you but I was wondering if it'd be a problem if I used your same approach for the explanation. Regards, Lucas
Gabriel Esposito (28 days ago)
Is the previous hash used with the message and proof of work to get the new hash?
大雄ML Liu (29 days ago)
merci
Prayag Lehana (29 days ago)
Please sir explain ethereum blockchain ! I know you are the only one who can explain it clearly
Intellectual Ketchup (1 month ago)
The little pie guys made the video!
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Juan Mora (1 month ago)
Please do part 2
Arek Krolak (1 month ago)
technically there is no such thing as "Alice owes Bob" in blockchain :)
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sandman logo (1 month ago)
i can't sustain an erection and neither can you
inQuest a (1 month ago)
damn, i finally understood it.
Michael Seven Foto (1 month ago)
the best explanation I ever saw
Nikolaj Nielsen (1 month ago)
Amazing video covering the essentials of cryptocurrencies, appreciate ya!
Sidharth Middela (1 month ago)
The best blockchain tutorial ever for me!!
Krenon (1 month ago)
if i coud come up with the missing part at11:40, i would be satoshi nakamoto and not watching this video ^^
Dominic Jackson (1 month ago)
Finally I get it!,,, somewhat! haha thanks great video
Shpetim Ahmeti (1 month ago)
The best explanation ever
N T (1 month ago)
You a fucking beast, just discovered you channel by searching for a good vid regarding neuronal networks and after watching some of your videos I fell in love with your content and how you present it in a way that people who are new to the scene are able to follow. Subscribed ! Keep the great work up ! Greetings from germany
are all block creators female?
GD Illuminati65 (1 month ago)
0:59 Dogecoin!
T Trooper (1 month ago)
The criticism regarding the number of transactions per second is not valid. If we would have increased the block size that would lead to centralisation as the cost of running a node(verifying and broadcasting transactions) would go up. The good thing is that now we have Lightning Network that is a robust way to scale off chain. I would like to add that the other proof of whatever have some very inconvenient trade offs. Having more cryptos is like having more internets, it's beside the point. All this benefits that this cryptos promise will become irrelevant as the Bitcoin protocol improves and grows. The big fee argument is a good example of this. We have a good scaling solution. You can make off chain transaction for nearly 0 fees.
Fahad Ahmad (1 month ago)
I wish I could have added some more likes to the video. Simply Fabulous.
polina ganesh (1 month ago)
It appearing too complicatedd can u break it down to more simpler terms.....
Steven W (1 month ago)
god i am so freaking dumb :( guess ill watch the vid again maybe ill understand a bit more
Jack Wu (1 month ago)
This is a really amazing video about cryptocurrency, and it explained it much better than any other video i could find. however, i got curious about how someone trying to commit fraud could succeed, and wanted to know how a system could deal with this kind of situation: Here we have 7 entities; Alice, Bob, Charlie, and 4 Miners. All 4 miners have roughly equal computing capabilities. Alice and Bob are not miners and cannot contribute computational work. We'll say Alice and Charlie are secretly two accounts belonging to the same person, although that is not critical to the situation. Let's say Alice is attempting to commit fraud. Alice is paying Bob $100, and broadcasts that transaction to Bob, and only 2 of the miners. Alice broadcasts a fraudulent transaction, say Alice pays Charlie(Alice's own account) $100, to the other 2 miners. Now Miners 1 and 2 have a correct block and Miners 3 and 4 have a fraudulent block that they think is accurate. 2 blocks with proof of work will be broadcast, one block with the correct transaction and one block with fraudulent transaction. We now have a fork in the road. The Miners will continue working on their current blockchain. However, since each side (Miners 1+2 and Miners 3+4) both have roughly the same amount of computational power, they can both contribute the same amount of work, and therefore the same amount of blocks. Because of this, no one fork will outpace the other, and both will maintain somewhat equal length. This is where the confusion, especially for the Miners, sets in. Each fork will have roughly the same amount of blocks, and therefore, no one will know if they were working on the correct fork, or are still working off of the fraudulent transaction. Bob might know which is correct if he was expecting a transaction; he can look through the blocks at the beginning of each fork and determine that the block where he gets paid from Alice is accurate. But even then, since Bob has no computational power, he cannot contribute work to the correct chain in an attempt to prove that is the correct chain. To top it all off, Charlie can even claim he was expecting a transaction from Alice. So even if Bob picks up what is happening, how will the Miners? How can they settle which fork is correct? All comments are appreciated, I'm just really curious how a cryptocurrency could combat this.
NModds (1 month ago)
Why haven't I seen your videos before. Great explanation and animations. 10/10.
Gabriel Esposito (1 month ago)
Hi. Is the previous hash header used with the transactions and the proof of work in SHA256 to get the new hash? Or just the transactions in combination with the proof of work?
NUKE (1 month ago)
Just wait untill powerfull AI learns mathematics running on a Quantom Computer. All your base are belong to us.
Christian Townsend (1 month ago)
Can someone please explain what controls the expected output when the Proof of work passes through the hash function? In the video his examples include 30 0's or 60 0's etc...What exactly determines what hashed value is expected? What controls the number of 0s expected for a confirmed Proof of work?
jeroen Dobbelaere (1 month ago)
yes it have some sound to it
Gustavo.Lombano (1 month ago)
Congratulation for your work !!!!!, astonishing intel .
Sunaryo PS (1 month ago)
Thank you Bro.. The explanation is very good.. I have listen other explanation before but never understand but now. I do understand What is Bitcoin and Why it call block chain. 👍👍👍👍
Chard Antonio (1 month ago)
http://cointiply.com/r/xe8Xa
Brayo Mburu (1 month ago)
very well explained. good job there!
rewtnode (1 month ago)
I have seen a few presentations and talks about the subject before. Most are trying to dumb it down, and their presentations are either aimed at the converted and insiders, or just there to inspire awe about the speaker’s greatness - And some are just selling snake oil. Now, This presentation is a rare exception. It is the best introduction so far that explains in quite some depth and does not oversimplify.
Arthur Zanatta (1 month ago)
This is the best introduction to cryptocurrencies that I've ever seen! Excellent work.
Hamza Grün (1 month ago)
9:55 so how does money enter the ledger? You said you'll come to that after a few minutes, but it seems you forget Thank you for the great video :)
compuholic82 (1 month ago)
He did cover it. New money enters the system through the block reward that is awarded to the miners.
Anthony Schroeder (1 month ago)
holy shiznit, this was so amazingly simple to understand. Thank you so much for making this video
Rafał Węgliński (1 month ago)
Dziękuję za doskonały film Panu. To wielka sztuka aby powiedzieć w prosty sposób o dość skomplikowanym temacie. Mało co zrozumialem :) ale napewno jest to najlepsze wytłumaczenie na temat kryptowalut i block chain. Dzięjuję. To wielki zaszczyt słuchać Pana.
Kyle Rudman (1 month ago)
Watching your videos make me think I’m in national treasure
alan roig (1 month ago)
Some day, I hope soon, this will be finished for our good and security. Why? Because Bitcoin means a perfect way for MAFIAS, NARCOTRAFFIC, TERRORISTS, CRIMINALS etc. to pass money without any control.
leetlikelime (1 month ago)
actually if you watched the video, you would know that the ledger is public, so arguably bitcoin txs are more transparent and auditable than cash or private bank transfers in places that don't reveal your financial information like Luxembourg, Bahamas, Malta, etc.
leetlikelime (1 month ago)
so, ban cash? end the war on drugs? remember that in the 1980's, it wasn't normal to own a mobile phone except if you were a criminal or company manager. criminals are usually the first to adopt disruptive tech because it increases opsec and legislation lags behind.
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Juejue rule (1 month ago)
伟大的视频,感谢
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KingOfGames (1 month ago)
When I saw LD I immediately thought of LaserDisc
Ramy Rabie (1 month ago)
i love your videos, thanks for the hard work <3
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John C Gibson (1 month ago)
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QuickPro Studios (1 month ago)
So, at the example at 21:12, doesn't Bob automatically delete the legit blockchain if Alice happens to get lucky with her own fraudulent blockchain?
TheSteepPers (2 months ago)
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J.R. W (2 months ago)
Can any savvy miner answer a question? At 20:40 when Alice falsifies the block chain and the other miners prove her "wrong" by filling up the longer block-chain with the "right" ledger, why would Alice not broadcast her new ledger with a "proof of work" to the miners? Because essentially she has "won" the proof of work, so why would the miners keep going? Wouldn't they say, "Okay, we have a proof of work for a new ledger and Alice won the lottery. Therefore we will take her ledger and start again on a new proof of work?" Essentially, why does a miner keep working after a proof of work has come out just on the off chance the the "winner" falsified the ledger?
compuholic82 (1 month ago)
I'm not a miner but maybe I can answer this. She can totally do that, but that would defeat the purpose. If she broadcasts the fraudulent block to other people, it is not fraudulent anymore. Everybody would know that she has spent the money. The miners would accept the new block and continue the blockchain from there. And because each new block starts with the hash of the previous block, all subsequent blocks have to include the "fraudulent" transaction from Alice.
Spacepointe Drive (2 months ago)
Waooo I now CrytoUnderstood logic behind it !! Thank you man
Sajad Qamari (2 months ago)
OMG!! too much work😂
rohit singh (2 months ago)
i have a question, how does a cryptocurrency holds a price i mean why would someone will trade cryptos other than their own country currency how can users trust it. it maybe said that the computation power/electricity spended on mining may give it a value but why and who care if someone waste his/her electricity & computing power on a system and why should i give my own real money in exchange of it ? please clear my query. i am new to blockchain and trying to learn.
Yiu Chung Wong (2 months ago)
Daaaamn!!! Look at those prices.....Only if I watched this video last year =[
Erick2142 (2 months ago)
Please make a video that explains the math behind cryptography!
This is the best cryptocurrencies explaining video ever. Thank you so much
Grimmage (2 months ago)
I thought this was a ad while i was playin a game this started
Raven XRZ (2 months ago)
after watch a lot of video, this is the best.
Beth Bartlett (2 months ago)
Who actually Owns this and Who would. Manage it? No different than the paper system - there's no value in the *Federal Reserve Note* Rothschild removed all metals of value from coins and all the "notes backed by gold/silver" It's a system that must be considered - *MAYBE NOW THE US CITIZENS - will realize that the Federal Reserve is not part of the USA Gov, the US Treasury, nor are the Private Owners USA Citizens or ethical towards protection this country/people. $$$
J.J. Shank (2 months ago)
Did you watch the video? No one owns it. It's a protocol dependent on computational power -- no trust or authority needed. Falsifying chains isn't hard because it's illegal, it's hard because it's mathematically impossible.

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