What is Bitcoin, and how does it work?

The Bitcoin is a Cryptocurrency. Bitcoin developed in 2008. The named Satoshi Nakamoto.

The Bitcoin worked an essential role in spreading the concept of cryptocurrency. Now today’s world, It is the equivalent to cryptocurrency. The desire of developers to create a version of electronic cash.

In today’s world, cryptocurrency is a digital asset that any financial institution does not control. In the year 2010, the value of bitcoin price was 0. But today in 2020, bitcoin holds a discount of 25 Lakhs.

Bitcoin, usually defined as a cryptocurrency. A virtual coin or a digital coin – is a type of money that is entirely virtual. It’s like an online version of cash. 

How does Bitcoin work?

Every Bitcoin is a computer file. It saved in a ‘digital wallet’ app/smartphone/computer. Also, people can send Bitcoins (or part of one) to your digital wallet. & you can send Bitcoins to other people. All transactions saved in the public list.

This makes it possible to trace the history of Bitcoins. The reason is to stop people from spending coins they do not own, making copies, or undoing transactions.

The basics for a new user

Being a fresh user, you can start with Bitcoin without knowing the technical details. Once installed The Bitcoin wallet on your computer/smartphone. It will create your first Bitcoin address. Then you can make more whenever you need one. 

Now that, You can reveal your locations to your colleagues to pay you or vice versa. This is much comparable to how email works. 

Balances – blockchain

Where is the blockchain is a distributed public record on which the entire Bitcoin network relies?  All transactions included in the blockchain.

It allows Bitcoin wallets to calculate their spendable balance to verify new transactions, thereby ensuring the spender owns them. 

Transactions – private keys

The trade is a transfer of value between Bitcoin wallets. Its included in the blockchain. Bitcoin wallets have a secret part of data called a private key or seed used to sign transactions. Its providing mathematical evidence. 

The sign also anticipates the transaction from being changed by anybody once it has been issued. It usually begins within 10-20 minutes through mining.

Processing – mining

The mining is a distributed consent system. It is used to verify pending transactions by including them in the blockchain. 

It enforces a chronological order. In blockchain, protects the neutrality of the network. And allows different computers to agree on the system’s state.  After confirmation, transactions must be packed in a block.

Which fits stringent cryptographic rules that the network will verify. Specific rules prevent earlier blocks from being modified because doing so would revoke all the subsequent blocks.

Mining also creates a competitive lottery that prevents any individual from quickly adding new blocks consecutively to the blockchain. 

In this order the no group or individuals can control. What is included in the blockchain or replaces parts of the block chain to roll back their spending?

How to Send Bitcoin-cryptocurrency

If you want to send or receive bitcoins, then you have to need a Bitcoin wallet. But all the exact processes may differ per wallet. It looks easy as using Venmo or another money transfer app. You’ll use your Bitcoin wallet to select the type of currency you want to send (in this case, Bitcoin), write in the recipient’s address, enter the amount you wish to send, then pay any fees, then click.

How does Bitcoin make money?-cryptocurrency

ALSO READ-Bitcoin jumps above $53,000 as a record-breaking rally after Elon Musk backs crypto over cash.

Bitcoin value follows the law of supply and demand — and because demand waxes and wanes, there’s much volatility in the cryptocurrency’s price.

The mining bitcoin, Requires technical expertise & investment in high-performance computers; most people purchase bitcoins as a form of currency speculation — betting that. 

The dollar($) value of 1 bitcoin will be higher than in the future. But that’s difficult to predict.

The Storing your bitcoins -The Hot wallets vs The Cold wallets-cryptocurrency

The Bitcoins can be stored in two types of digital wallets:

  • The Hot wallet: In Bitcoin, digital currency is stored in the cloud format on a trusted exchange or provider and also accessed through a computer browser, desktop or smartphone app.
  • Cold wallet: An encrypted portable device, much like a thumb drive, allows you to download and carry your bitcoins.

A hot wallet connected to the internet; a cold wallet is not. But it would help if you had a hot wallet to download bitcoins into a portable cold wallet.

Going down the rabbit hole

This is just a summary of Bitcoin. If you want to learn more of the details, you can read our Blog(blogangle.com) that describes its design or explore the Bitcoin wiki

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