nonoise₿itcoin

How does the Bitcoin network ensure secure and trustless interactions between users during transactions?

The Bitcoin network does not ensure secure and trustless interactions between users during transactions.

The Bitcoin network ensures that

• the first party can see whether the money they sent has been confirmed as being under the control of the second party,
• the second party can see whether the money they expect to receive has been confirmed as being under their control.
• No trusted intermediary is needed. Intermediaries exist in the form of relaying nodes and miners, but none of those used need to be trusted in any way.

The Bitcoin network does not ensure that the second party provides the first party with the goods or services purchased. This is a vital interaction during the business transaction. People discussing Bitcoin often use the word transaction to only mean the payment side of a business transaction.

The first party has to trust that the second party will complete their part of the business transaction.

The first part is mostly ensured by the use of ECDSA signatures transmitted using the Bitcoin protocol and by the public nature of the Bitcoin blockchain and its use of the SHA256 hash algorithm to provide links between blocks that provide a sequencing of transactions which prevents double spending.

The use of ECDSA signatures allows anyone to detect if any of the untrusted intermediaries have altered data and thus reject that data and ultimately shun the last intermediary.

The Bitcoin protocol itself does not directly address security threats such as an eclipse attack. Preventing this, for example, is perhaps more appropriately addressed by the implementation of the node software in selecting and managing its set of peers with which it is communicating.