Bitcoin: what it is, how it works, how to receive and store
Since the creation of bitcoin in 2009 by the mysterious Satoshi Nakamoto, the digital currency has made a big impression on the digital world. Being completely decentralized and managed by Internet users like you or me, the Bitcoin currency is very similar to conventional currencies, in that these "coins" (coins) can be anonymously used for daily purchases or even online trading.
What is bitcoin?
Bitcoin is a form of digital currency that was coined in 2009 by Satoshi Nakamoto. This electronic cash is as fast as fiat money like dollars, euros or yen, since bitcoin allows you to make purchases electronically. However, unlike standard currencies, for which central banks are responsible for printing and monitoring, bitcoin is completely decentralized and is created, held and sold by individuals and legal entities. In fact, this is the whole concept of bitcoin. Bitcoins are completely independent of any central authority, can be transferred electronically, and have very low transaction fees.
How does bitcoin work?
Bitcoin is based on a system of mathematical proof. The currency is created by solving complex mathematical equations.
There are three main ways to acquire bitcoins: buy on the exchange, exchange and mine.
Today, there are several points of sale, called bitcoin exchanges, where you can buy or sell bitcoins. These exchanges are located all over the world and accept all standard currencies. Among the most popular online selling points are Bitquick, Coinbase, and Mt. gox.
Bitcoins can also be purchased through a transaction. People can send bitcoins to each other using mobile applications or computers. This process is very similar to electronic money transfer.
Mining is the process of using computers to perform mathematical calculations on the bitcoin network in order to confirm transactions and increase security. As a reward for their services, miners receive a commission from the transactions they confirm, as well as newly created bitcoins. Mining is a competitive market in which revenues are distributed according to the number of calculations.
It should be noted that bitcoins are not actually an infinite currency. According to the bitcoin protocol, miners can generate up to 21 million bitcoins, although coins can be divided into smaller parts.
Like a standard transfer of funds, bitcoin transactions have three parameters: input, quantity, and output. The input contains information about the sender; the quantity corresponds to how much currency is involved in the exchange; and the output contains information about the recipient.
To send bitcoins, you need two parameters: a bitcoin address and a private key. Similar to an IBAN address, a Bitcoin address consists of letters and numbers. Your account details are randomly generated series. The secret key is also a series of randomly generated numbers needed to access a user's bitcoin account to withdraw or deposit coins.
Bitcoins are stored in a digital wallet. To get such a digital wallet, you need to install software that is generated in the form of a single algorithm and placed either in a cloud environment or on the user's personal computer.
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