The Bitcoin Universe: An Architectural Overview of the Bitcoin Blockchain

On January 2009, the emergence of Bitcoin surprised the world with a new idea involving decentralized secure money transfers outside the ecosystem of FIAT currencies. The concepts behind the Bitcoin architecture the blockchain can, however, be extended to a much wider range of economic assets than just digital currencies. In general, a blockchain is a distributed, verifiable database, which operates through a confluence of public-key cryptography, the concept of proof of work and P2P-systems. In the following article, a detailed overview of the concepts underlying the Bitcoin architecture is given. The ecosystem as a whole is discussed, starting with some historical aspects. We consider the cryptographic background as given here, as this article discusses mainly the basic concepts for key generation. Here, we focus on the concept of transactions in the scope of Bitcoin which we break down into single attributes such as the locking and unlocking scripts. Both, the mining process and the consensus mechanism are examined. Furthermore, the drawbacks of the whole system and the proposed remedies to these via Bitcoin Improvement Proposals (BIP) are outlined. Finally, we address several applications based on the blockchain as well as the question of anonymity.