docs: add basic concepts page

Add a page describing basic IOTA concepts with references to
the official docs site.

docs/basic_concepts.rst

@@ -0,0 +1,178 @@
+Basic Concepts
+==============
+
+Before diving into the API, it's important to understand the fundamental
+data types of IOTA.
+
+The `official IOTA documentation site`_ gives a good and in-depth explanation of the
+concepts used in IOTA. PyOTA documentation will try to give references to the
+official site wherever possible.
+
+Ternary
+-------
+
+IOTA uses the `ternary numerical system`_ to represent data. The smallest unit of
+information is a ``trit``, that can have a value of -1, 0 or 1 in a balanced
+ternary system. A combination of 3 ``trits`` equals one ``tryte``, therefore a
+``tryte`` can have 3 * 3 * 3 = 27 different values.
+
+To represent a ``tryte``, IOTA encodes these 27 values into characters based on
+the `tryte alphabet`_.
+
+.. py:currentmodule:: iota
+
+In PyOTA, ``trits`` are represented as a sequence of numerical values (``List[int]``)
+while trytes have their own class called :py:class:`TryteString`.
+
+IOTA token
+----------
+
+The `IOTA token`_ is a `unit`_ of value that can be transferred over an IOTA
+network through `transfer bundles`_.
+
+The IOTA token was launched on the Mainnet in June 2017. At this point, the
+nodes in the network were hard-coded with a total supply of 2,779,530,283 277,761.
+This large supply allows each of the billions of devices, which are expected to
+be a part of the Internet of Things, to have its own wallet and transact
+micropayments with other devices.
+
+Seed
+----
+
+`Seed`_ in IOTA is your unique password. It is the digital key that unlocks
+your safe that holds your tokens, or proves the ownership of messages.
+
+Seeds in PyOTA are always 81 trytes long and may only contain characters from
+the `tryte alphabet`_.
+
+.. warning::
+    Treat your seed(s) the same as you would the password for any other financial service.
+    Never share your seed with anyone, and never use online generators to create a seed.
+    The library can help you to create your own locally and it does not require
+    internet connection: :py:meth:`iota.crypto.Seed.random`.
+
+For PyOTA-specific implementation details on seeds, see :py:class:`crypto.Seed`.
+
+Address
+-------
+
+To send or receive any transaction (let them be zero-value or value transacitons)
+in IOTA, you will need to specify an `address`_. An address is like a physical mailbox
+on your entrance door: anyone can drop things in your mailbox (send you messages
+or tokens), but only you can empty it (withdraw tokens).
+
+.. warning::
+    Addresses should not be re-used once they are `spent from`_.
+    **You can receive as many transactions to an address as you wish, but only
+    spend from that address once.**
+
+Addresses are generated from your seed through cryptographic functions. There
+are 9\ :sup:`57`\  different addresses that one might generate from a seed,
+which is quite a lot. Given your ``seed``, the ``index`` and ``security level``
+parameters specify which address will be generated from it. The process is
+deterministic, meaning that same input paramteres always generate the same address.
+
+Addresses are 81 trytes long and may contain extra 9 trytes for checksum.
+The checksum may be used to verify that an address is in fact a valid IOTA address.
+
+For-PyOTA specific implementation details on addresses, see :py:class:`Address`.
+
+Transaction
+-----------
+
+    *A transaction is a single transfer instruction that can either withdraw IOTA
+    tokens from an address, deposit them into an address, or have zero-value
+    (contain data, a message, or a signature). If you want to send anything to an
+    IOTA network, you must send it to a node as a transaction.*
+
+    ---  from the `official IOTA documentation site`_
+
+Transactions are always 2673 trytes long and their `structure`_ is defined by
+the protocol. They can be classified into three categories:
+
+- `Input transaction`_: A transaction that withdraws tokens from an address.
+- `Output transaction`_: A transaction that deposits tokens to an address.
+- `Zero-value transaction`_: A transaction that has 0 value and might carry messages
+  or signatures.
+
+Depending on the type of the transaction, different fields are required to be filled.
+
+A transaction's unique identifier in IOTA is the :py:class:`TransactionHash`,
+that is generated from the trytes of the transaction. If any trytes change
+in the transaction, the returning transaction hash would alter. This way, transaction
+hashes ensure the immutability of the Tangle.
+
+To become accepted by the network, a transaction has to be attached to the Tangle.
+The attachment process means that the transaction should reference two unconfirmed
+transactions (tips) in the Tangle and do a small proof-of-work. This process might
+be performed by a node, or by using the local proof-of-work feature of the `client
+libraries`_.
+
+For PyOTA-specific implementation details on transactions, see :py:class:`Transaction`
+and :py:class:`ProposedTransaction`.
+
+Bundle
+------
+
+    *A bundle is a group of transactions that rely on each other's validity.
+    For example, a transaction that deposits IOTA tokens into an address relies on
+    another transaction to withdraw those IOTA tokens from another address.
+    Therefore, those transactions must be in the same bundle.*
+
+    ---  from the `official IOTA documentation site`_
+
+In other words, a bundle is collection of transactions, treated as an atomic unit when
+attached to the Tangle.
+
+.. note::
+    Unlike a block in a blockchain, bundles are not first-class
+    citizens in IOTA; only transactions get stored in the Tangle.
+
+    Instead, bundles must be inferred by following linked transactions
+    with the same bundle hash.
+
+Transactions in the bundle are linked together through their ``trunkTransaction``
+fields, furthermore they are indexed within the bundle and contain a ``bundleHash``
+field that is a `unique identifier for the bundle`_.
+
+.. figure:: images/bundle-structure.png
+   :scale: 100 %
+   :alt: Bundle structure with four transactions.
+
+   Structure of a bundle with four transactions. Numbers in brackets denote
+   (``currentIndex``, ``lastIndex``) fields. Head of the bundle has index 0,
+   while tail has index 3.
+
+Read more about `how bundles are structured`_.
+
+Bundles can be classified into two categories:
+
+- `Transfer bundles`_: Bundles that contain input and output transactions. A bundle
+  always has to be balanced, meaning that input transaction values should equal
+  to output transaction values.
+- `Zero-value bundles`_: Bundles that contain only zero-value transactions.
+
+For PyOTA-specific implementation details on bundles, see :py:class:`Bundle`
+and :py:class:`ProposedBundle`.
+
+Now that you are familiar with some basic IOTA concepts, it is time to explore
+how PyOTA implements these and how you can work with them.
+
+.. _official IOTA documentation site: https://docs.iota.org/docs/getting-started/0.1/introduction/overview
+.. _ternary numerical system: https://docs.iota.org/docs/getting-started/0.1/introduction/ternary
+.. _tryte alphabet: https://docs.iota.org/docs/getting-started/0.1/introduction/ternary#tryte-encoding
+.. _iota token: https://docs.iota.org/docs/getting-started/0.1/clients/token
+.. _iota network: https://docs.iota.org/docs/getting-started/0.1/network/iota-networks
+.. _unit: https://docs.iota.org/docs/getting-started/0.1/clients/token#units-of-iota-tokens
+.. _seed: https://docs.iota.org/docs/getting-started/0.1/clients/seeds
+.. _address: https://docs.iota.org/docs/getting-started/0.1/clients/addresses
+.. _spent from: https://docs.iota.org/docs/getting-started/0.1/clients/addresses#spent-addresses
+.. _structure: https://docs.iota.org/docs/getting-started/0.1/transactions/transactions#structure-of-a-transaction
+.. _input transaction: https://docs.iota.org/docs/getting-started/0.1/transactions/transactions#input-transactions
+.. _output transaction: https://docs.iota.org/docs/getting-started/0.1/transactions/transactions#output-transactions
+.. _zero-value transaction: https://docs.iota.org/docs/getting-started/0.1/transactions/transactions#zero-value-transactions
+.. _client libraries: https://docs.iota.org/docs/client-libraries/0.1/introduction/overview
+.. _how bundles are structured: https://docs.iota.org/docs/getting-started/0.1/transactions/bundles
+.. _unique identifier for the bundle: https://docs.iota.org/docs/getting-started/0.1/transactions/bundles#bundle-hash
+.. _transfer bundles: https://docs.iota.org/docs/getting-started/0.1/transactions/bundles#transfer-bundles
+.. _zero-value bundles: https://docs.iota.org/docs/getting-started/0.1/transactions/bundles#zero-value-bundle

docs/index.rst

@@ -3,6 +3,7 @@
    :hidden:
 
    getting_started
+   basic_concepts
    types
    adapters
    addresses

docs/types.rst

@@ -1,11 +1,3 @@
-Basic Concepts
-==============
-
-Before diving into the API, it's important to understand the fundamental
-data types of IOTA.
-
-:todo: Link to IOTA docs
-
 PyOTA Types
 ===========