Bitcoin is not just a digital currency. This is a technical solution that opens up huge opportunities for programmers. Let’s look at Bitcoin through the prism of API – descriptions of the interaction of one program with another.

API

Our user experience is the result of the interaction between a huge number of computer programs. The browser interacts with the operating system, the mail client sends requests to the mail server, and so on. All these interactions are described by the term API (Application Programming Interface). Bitcoin as a technology uses a wide variety of APIs for a variety of purposes.

Even traditional money has an API, but the interactions are open and not accessible to everyone. For example, you can only program the Visa network merchant API if you are a trusted merchant. You can send and receive FIX messages if you are a stockbroker or exchange. However, this is not directly available to end users. Bitcoin changes this principle by not only offering an API for accounts (wallets) and transactions, but also by making this API available to everyone.

API and decentralization

In traditional finance, the desired result and system stability is achieved through a complex set of rules, licenses, permits, fraud prevention measures, and, first of all, by exclusion of the broad mass of users from control. Financial networks remain secure because the APIs are closed and only available to the few who enjoy “trust and access” (for example, various government agencies and banks).

In theory, this protects the system from actions by intruders. Bitcoin is changing the model from “trust by exclusion” to “trust by calculation”. Trust is distributed over a large (and ever-growing) network of participants who constantly check on each other, making it difficult for an attacker (or an entire group) to take over the entire network. As a result, there is no need to exclude or deny access to anyone. Anyone can participate in the Bitcoin network and see all transactions, or in other words, anyone can access the API.

API and Bitcoin

On the Bitcoin network, you can programmatically check your balance or the balance of any bitcoin wallet. And most importantly, you can create and make transactions on the same terms as other participants. In a world where finance is decentralized and publicly available, you can also manage banking services, stock exchange, bank transfers or escrow accounts without any permission or license. The Internet has allowed every blogger to match the reach of the New York Times. Bitcoin provides every user with opportunities comparable to those available to the leading banks.

While variations on programming interactions can be presented and interpreted quite broadly, Andreas Antonopoulos, a well-known entrepreneur and supporter of the historically first Bitcoin cryptocurrency, highlights several concrete examples of APIs in the Bitcoin environment. Let’s consider them in more detail.

The Bitcoin network offers three different APIs.

First is a transaction scripting language. The most commonly used scenario corresponds to “Transfer X coins from Alice’s wallet to Bob’s wallet”. Yes, almost all transactions in the Bitcoin network look like this, but the scripting language is quite powerful and allows for many more user actions. One example is the M-of-N signatures scenario, which is a transaction that can be completed if any M keys out of a total of N are used to sign it. For example, a transaction may require, in addition to the recipient key, a key from one more side. In a corporate environment, this allows you to require signatures from different individuals, such as the CFO, the CEO, and the auditor.

In addition to the M-of-N model, the scripting language can define validation conditions that have nothing to do with keys. For example, a transaction can be made in favor of anyone who guesses a combination of numbers, which creates the possibility of a global and transparent lottery. The possibilities of using this technology are quite wide.

Second An API in Bitcoin is a P2P network protocol API that allows nodes to interact, exchange transactions, validate new blocks of transactions, and newly generated coins. All of these network protocol interactions allow each node to create a complete and identical local copy of the shared transaction ledger that is the blockchain, the “heart of Bitcoin.” The open nature of the BTC blockchain allows anyone to offer services that require information about Bitcoin transactions. For example, you can provide your wallet address to a tax consultant, and he will select a tax optimization plan for you.

Finally, third is an API that represents the Bitcoin economy as a set of JSON-RPC services for client applications. This API offers services such as checking the balance in the wallet, creating a transaction, opening new wallets; and so on.

Of course, the Bitcoin APIs don’t end there. Bitcoin acts as a platform for more complex services such as lightweight clients (Stratum API), currency exchange, notification and alert services, market data services, econometric services, and so on. They all have their own APIs.

Conclusion

APIs in the Bitcoin network can exist at various levels: TCP, HTTP, SMPT, and so on. With their help, you can create a variety of solutions. For example, attestation and assurance services, services that reflect the state of a document at a specific time, and even secure messaging services.

Bitcoin turns money and transactions – and therefore commerce – into a very promising area of ​​​​opportunity for programmers, and money as a service with open, flexible and powerful APIs – into an entire economy (and even into a separate area of ​​\u200b\u200bdecentralized economy, where participants operate in an environment with the same rules of the game and there is no monopoly market agent controlling the entire process – in contrast to the fiat financial system). And all this within a single JSON request. Therefore, a simple view of Bitcoin as something like “popular digital money” is superficial. He may be overlooking exactly what Bitcoin was created for.