Bitcoin is a form of digital currency
It is created with the algorythm SHA-256. Bitcoins aren't printed like Dollar or Euro bills, they are produced by so called "mining".
What makes it different from normal currencies?
Bitcoin can be used to buy things electronically. You could call it the currency of the internet. However, bitcoinâs most important characteristic, and the thing that makes it different to conventional money, is that it is decentralized. No single institution controls the bitcoin network. Who created it? A software developer called Satoshi Nakamoto proposed bitcoin, which was an electronic payment system based on mathematical proof. The idea was to produce a currency independent of any central authority, transferable electronically, more or less instantly, with very low transaction fees. Who prints it? No one. This currency isnât physically printed in the shadows by a central bank, unaccountable to the population, and making its own rules. Those banks can simply produce more money to cover the national debt, thus devaluing their currency. Instead, bitcoin is created digitally, by a community of people that anyone can join. Bitcoins are âminedâ, using computing power in a distributed network. This network also processes transactions made with the virtual currency, effectively making bitcoin its own payment network. So you canât Produce unlimited bitcoins? Thatâs right. The bitcoin protocol â the rules that make bitcoin work â say that only 21 million bitcoins can ever be created by miners. However, these coins can be divided into smaller parts (the smallest divisible amount is one hundred millionth of a bitcoin and is called a âSatoshiâ, after the founder of bitcoin). What is bitcoin based on? Conventional currency has been based on gold or silver. Theoretically, you knew that if you handed over a dollar at the bank, you could get some gold back (although this didnât actually work in practice). But bitcoin isnât based on gold; itâs based on mathematics. Around the world, people are using software programs that follow a mathematical formula to produce bitcoins. The mathematical formula is freely available, so that anyone can check it. The software is also open source, meaning that anyone can look at it to make sure that it does what it is supposed to. So how does Bitcoin work? âTo answer this , we got the perfect video hereâ If you have any additional questions , feel free to leave a comment and we will update the post . Help us to help you.
2 Comments
Mike B.
1/25/2018 04:02:29 pm
I was overwhelmed when looking up bitcoin on google but this site made it so easy to understand .
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Sallysweet
1/25/2018 04:04:01 pm
love your blog <3
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