Activities for Inventing Bitcoin

This post is part of the fastest, most efficient learning path for people who want to get up to speed on Bitcoin, whether that’s for making an investment or transitioning to working in the industry. Read the main post here.

I created a list of activities for each chapter in Inventing Bitcoin by Yan Pritzker. The goal of these activities is to reinforce what you just read.

As a reminder, for this part of the learning path I recommend reading chapters 1–5, then chapter 7. Get a free copy of the book in PDF, audiobook, and e-reader formats here:

You can also read the book in paperback format by buying it from Amazon.

To go through this curriculum using proper learning software (and not Medium), enroll in my free Teachable course.

To dialogue and do the activities in this learning path with me and a group of your peers, join a live cohort here.

Quick note: The answers videos for these activities are uploaded in my free Teachable course. Enroll there to view the videos.

Chapter 1: What is Bitcoin?

No activities. Just read, take notes to cement your knowledge, and enjoy.

Chapter 2: Removing the Middleman

No activities. Just read, take notes to cement your knowledge, and enjoy.

Chapter 3: Proof of Work

  1. Copy the text “Alice sends $2 to Bob, Charlotte sends $5 to Alice nonce = 12345” (without the quotation marks) and paste it in this SHA-256 hash generator. What is the hash output in hexadecimal format?
  2. Copy and paste the hash output into this hexadecimal to decimal converter. What is the hash output in decimal format?
  3. Copy the text “Alice sends $2 to Bob, Charlotte sends $5 to Alice nonce = 92435” (without the quotation marks) and paste it in this SHA-256 hash generator. What is the hash output in hexadecimal format? And in decimal format?
  4. Which hash output has a better chance of being a winning nonce?

Chapter 4: Mining

  1. Does bitcoin mining involve solving complex equations? If no, explain what it does involve.
  2. Go to bitaps.com. Type in 0 to view the data from the genesis block. What is the hash output of the genesis block in hexadecimal format? And in decimal format? What is the nonce in hexadecimal format? And in decimal format? How many transactions were included in the block?
  3. If the target number increases, is the difficulty lowered or raised?
  4. The target number for block 500,000 on December 18, 2017 was 38,469 in decimal format. Blocks were mined faster than 10 minutes per block on average for that 2016-block period, so the difficulty of mining adjusted upward for the next 2016-block period. Select the target numbers from the list that are valid target numbers: a) 41,469, b) 37,313, c) 35,469, d) 39,625, e) all of the above.
  5. Blocks in the period between June 13, 2021 (block 687,456) and July 3, 2021 (block 689,471) were mined extremely slowly, with some blocks taking 24 minutes. This slow period caused the Bitcoin network’s largest ever downward difficulty adjustment. Skim read the top tweets on July 3, 2021 that mention bitcoin difficulty adjustment. What was the difficulty adjustment in percentage terms? What was the main cause of this slow average block time?

Chapter 5: Securing the Ledger

  1. Assume “Bob sends 5 to Alice, Rita sends 2 to Jake. 63193c7366f0a1360e42a14e2d6a5408e73da38e5e66d69d32d362df65bf419b. 92345.” (without the quotation marks) corresponds to the transactions for this block, the hash output of the previous block, and the winning nonce for this block, respectively. Copy and paste that string of characters into this SHA-256 hash generator. What is the hash output for this block in hexadecimal format? And in decimal format?
  2. Assume “Juan sends 6 to Maria, Alice sends 12 to Tim. 5c49032b256c65fb5be489875c49032b25b6c65fb5be489875c49032b25bfb52. 470919.” (without the quotation marks) is the block data for the previous block. Copy and paste it into this SHA-256 hash generator to confirm that the hash output matches the hash output in the block data in question 1.
  3. Let’s imagine a scenario where Alice is untrustworthy and she tries to change previous transaction data so she sends fewer bitcoins to Tim. Change the transaction data to “Juan sends 6 to Maria, Alice sends 2 to Tim. 5c49032b256c65fb5be489875c49032b25b6c65fb5be489875c49032b25bfb52. 470919.” What is the hash of this previous block now? And the hash of the block after (i.e., the block in question 1)? What happens when someone tries to change data for previous blocks and the hash output data linking the blocks together no longer matches?
  4. Assume it costs roughly $20,000 (US dollars) to mine a block, which is the approximate cost as of August 1, 2022. Let’s say you want to change the data two blocks ago, akin to what Alice did in question 3. What is the approximate cost to change that data?
  5. What is the approximate cost to rehash the last six blocks (approximately one hour’s worth of blocks)?
  6. What is the approximate cost to rehash the last two weeks’ worth of blocks?

Chapter 7: Accounts Without Identity

  1. Go to this BIP39 mnemonic tool. Click GENERATE a few times and see how a mnemonic (a set of human readable words also known as a “seed phrase”) corresponds to a seed (a single random number).
  2. What happens if you give someone your seed phrase?

You will do more activities on the topics in this chapter later in the learning path.

That’s it for the activities for Inventing Bitcoin.

To go through this curriculum using proper learning software (and not Medium), enroll in my free Teachable course.

To dialogue and do the activities in this learning path with me and a group of your peers, join a live cohort here.

The content above provides education as to general privacy and security practices when using bitcoin. Should you choose to apply the practices described with bitcoin you own now or may purchase in the future, you do so at your own risk, and I shall in no event be liable for any loss suffered. Nothing shall be construed as providing consulting, financial advice, or general advice as to securing bitcoin.

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