Bitcoin is the first cryptocurrency created and marketed. Its symbol is ฿, and BTC or XBT is also used in the markets.
How Bitcoins work
It is a digital technology that allows us to reproduce in electronic payments the efficiency of payments with paper bills. Bitcoin payments are fast, cheap and without intermediaries. In addition, they can be made for anyone, anywhere in the world, with no minimum or maximum value. ”
The technology that makes bitcoin work, i.e. the blockchain works in such a way as it behaves like a digitalized management currency.
On the contrary, in the case of bitcoins, coins are stored in gigantic shared databases (i.e. physically installed on several computers connected to the internet), and through advanced encryption systems they make it possible to trace transactions, generate new coins, distribute them to owners and make transactions.
How is paying and buying done in bitcoin
Bitcoin payments are made through a dedicated program for the bitcoin wallet, either through a personal computer or a Smartphone, by entering and sending the recipient’s address and the amount paid.
Bitcoin uses cryptography and a database that allows money to be transferred quickly and confidentially outside the traditional central payment system, and Bitcoin is characterized as a decentralized currency, that is, it is controlled by only its users, and is not subject to a watchdog like a government or central bank.
Bitcoin is also characterized by a set of other benefits, the most important of which are low fees due to the absence of a broker between you and the merchant, in addition to complete confidentiality and privacy, where the Bitcoin currency has a high degree of confidentiality; it is not subject to control by any country, bank or institution.
One of the major downsides of Bitcoin is the process of coding and concealing the method of generating Bitcoin currency through complex equations, and it may be an easy path to pass suspicious transactions since they are not subject to any control. Bitcoin is also not based on any assets or valuations that can be used in anticipating the rise or fall of this currency.
Peer to peer technology: what it is and how it works
Bitcoin is based on a technology based on peer to peer (the system used today to download films and music to be understood, where the files are stored on multiple computers connected to the network and between them, from which it is possible to download “pieces of files” thanks to this system, bitcoin does not devalue in the face of the placing on the market of new currency, also because the complex system makes it increasingly difficult to solve the algorithms to verify and accept transactions, thus ensuring a bitcoin value as little as possible influenced by devaluations given by inflation.
To explain what blockchain mining is and how it works, it must first be said that it is an operation that underlies the block chain’s ability to guarantee security.
Online exchanges of non-P2P crypto are run by people – they are liable to be exploited by governments through the imposition of regulatory restrictions.
The process (in the case of the Bitcoin Blockchain) is called Proof of Work and has the purpose of generating a new block in the sense of the structure that contains all the transactions.
Mining as a challenge and as a procedure completion
The term mining appears simultaneously with cryptocurrencies and can be translated with the word extract, underlining how it is a process, of a digital nature, through which cryptocurrencies can be obtained. Mining is not the creation of money through digital coins, but a complicated verification procedure that is generated by exploiting the computing power of a computer or particular tools aimed at this purpose.
The extraction of cryptocurrencies must be considered as an integral part of the technology of digital coins, since without this procedure there would be no completion of the processes that underlie the cryptocurrencies.