What is Bitcoin?

Bitcoin is a digital currency created in January 2009. It follows the ideas put in the papers by the mysterious and (not the actual) Satoshi Nakamoto.1 The identity of the person or people who created the technology remains a mystery. Bitcoin offers a lower transaction fee than traditional online payment methods and, unlike government funds, is used by a lower authority.

Bitcoin is a form of cryptocurrency. There are no portable bitcoins, only the ratings kept on the public ledger everyone has open access. All bitcoin transactions are guaranteed by a large amount of computer power. Bitcoins are not issued or sponsored by any banks or governments, and individual bitcoins are not as valuable as assets. Although not a legal tender, Bitcoin is very popular and has led to the introduction of hundreds of other cryptocurrencies, collectively called altcoins. Bitcoin is often abbreviated as "BTC."

Understanding Bitcoin

The bitcoin system is a set of computers (also called "nodes" or "miners") that all use the bitcoin code and maintain its blockchain. Figuratively, a blockchain can be thought of as a set of blocks. In each block there is a collection of transactions. Because all computers using the blockchain have the same list of blocks and transactions, and can clearly see these new blocks being filled with new bitcoin transactions, no one can cheat the system.

Anyone, whether they run a bitcoin "node" or not, can see this made happen live. To achieve a bad act, a bad character will need to use 51% of the computing power that builds bitcoin. Bitcoin has around 12,000 nodes, as of January 2021, and this number is growing, making such attacks impossible.

But in the event that an attack were to take place, the bitcoin miners - people who participate in the bitcoin network and their computer - may have launched a new blog to make the evil actor attempt to make that attack a waste.

Bitcoin token values ​​are stored using public and private “keys,” which are long strings of numbers and letters connected by a mathematical encryption algorithm used to create them. The public key (matched with a bank account number) acts as a global address to which others can send bitcoins.

The secret key (similar to an ATM PIN) is designed to be encrypted and used only to authorize bitcoin transactions. Bitcoin keys should not be confused with the bitcoin wallet, which is a portable or digital device that facilitates bitcoin trading and allows users to track coin ownership. The term “wallet” is a bit misleading, as the low bitcoin environment means it is never kept “in” the wallet, but rather respectable in the blockchain.

Peer-to-Peer Technology

Bitcoin is one of the first digital currencies to use claim technology to make instant payments. Individuals and private companies that control computer power and participate in the bitcoin network - the “miners” of bitcoin - manage to process blockchain transactions and are driven by rewards (new bitcoin issuance) and bitcoin transaction payments.

These miners can be considered as official authorities who strengthen the credibility of the bitcoin network. New bitcoin is issued to miners at a fixed rate, but declining from time to time. There are only 21 million bitcoin mines in total. As of January 30, 2021, there are approximately 18,614,806 bitcoin available and 2,385,193 bitcoin left to be dug.3

In this way, bitcoin and other cryptocurrencies operate differently than fiat currencies; in central banking systems, money is withdrawn at a rate similar to the growth of assets; this program is aimed at maintaining price stability. A distributed system, such as bitcoin, sets the rate of release early and according to an algorithm.

Bitcoin Mining

Bitcoin mining is the process by which bitcoins are extracted from distribution. Often, mines need to solve difficult puzzles to find a new block, which can be added to the blockchain.

Bitcoin miners add and verify records of transactions across the network. By adding blocks to the blockchain, miners are rewarded with a few bitcoins; the salary is halved every 210,000 blocks. The block prize was 50 new bitcoins in 2009. On May 11, 2020, a third half emerged, bringing rewards for each block acquisition down to 6.25 bitcoins.

Different types of hardware can be used for mining. However, some bring higher rewards than others. Certain chip chips, called Application-Specific Integrated Circuits (ASIC), as well as more advanced processing units, such as Graphic Processing Units (GPUs), can achieve many rewards. These top mining processors are known as "mining rigs."

One bitcoin is divided into eight decimal places (100 millionths of one bitcoin), and the smallest unit is called Satoshi.5 If necessary, and if the participating miners accept the change, bitcoin can eventually be divided even further into areas. decimals.

The history of Bitcoin

August 18, 2008

The domain name is registered. Today, at least, this domain is "WhoisGuard Protected," meaning that your subscriber is not a public entity.

October 31, 2008

A person or group using the name Satoshi Nakamoto made an announcement on Cryptography Mailing's list at "I was working on a completely new electronic money system, with the exception of a trusted third party. This is now a well-known white paper published at, entitled "Bitcoin: A Peer-to-Peer Electronic Cash System," will be the Magna Carta of how Bitcoin works today.

January 3, 2009

The first Bitcoin block was dug, Block 0. This is also known as the "genesis block" and contains

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