The first step of every beginner in the crypto world should be to get a good understanding of Bitcoin.
This is due to the fact that Bitcoin was the first cryptocurrency and all of the following crypto-currencies, Ethereum to IOTA, Bitcoin’s based cryptographic technology.
In the following article we take Bitcoin and the underlying technology under the magnifying glass.
What is Bitcoin?
Bitcoin is a digital Peer-to-Peer currency. It is a decentralized System, this means that users are able to save money to send and to receive, without a Central authority is needed, such as a Bank. It uses a distributed Ledger, the Blockchain is a shared, public document that anyone can see at any time. All transactions are stored here, available for all, and this Ledger is immutable (once a Block is added, may he altered, modified or removed). The Ledger is divided into blocks, in which transaction Details are stored. Actually, not so complicated, as updated in this Ledger / Blockchain, however, with new transactions?
Blocks by a process called Mining (Mining) of the Blockchain added.
Mining is a people address their Computer to from Hash functions. These are complex mathematical calculations which require computer work and electricity. In simpler words, the Computer every second, advises millions of Numbers and is looking for a solution for the Hash. The only way to solve the Problem is to estimate any number. If a Miner discovers a correct hash value, he can send it to the network, a transaction assigned to you in the Ledger write. You will then be rewarded for their work with Bitcoin new BTC.
This process is a very simple reason for this is of fundamental importance. It ensures that all transactions are written to the Blockchain, are real transactions, and not only that I write that Bob, Peter sends 100,000 in Bitcoin. To lie or to cheat, would have to devote a malicious actor, a lot of computing power (and expensive power).
I hope that this article is a little light on Bitcoin’s throws function: a decentralized digital currency that uses mathematics as a safety, without a Central authority is needed.
This is the first article in an upcoming series of articles, the next one should help you understand Ethereum.