What is Bitcoin?
The Concept. The technology. The unit of exchange. The protocol. It is all about the Bitcoin.
Everyone can speak obscurely, only the few can speak clearly.
Galileo Galilei
The same goes for Bitcoin explanation. Most definitions are obscure rather than understandable. We will do our best to be among the few who speak clearly.
Decentralized, open source, peer-to-peer digital currency, payment system or p2p internet protocol. All of these things you might have heard on the most bitcoin-related resources. We want to provide a deeper insight in the term Bitcoin.
Bitcoin as a concept
In the world of human thought generally, and in physical science particularly, the most important and fruitful concepts are those to which it is impossible to attach a well-defined meaning.
Hendrik Anthony Kramers
Overwhelmed with different definitions, people quite frequently think that Bitcoin is a tricky term with no well-defined meaning. In the majority they are right. Do not try to refer Bitcoin to something exact - it would make no sense. Try to embrace every piece of the information.
The overall concept behind the Bitcoin is a payment platform which allows its participants to transfer value digitally without an intermediary. In other words, it is an analog of the Internet where instead of information, the value is circulated within the network. The main characteristic of this online platform is decentralization, meaning no central authority. Thus, nobody can lose control of the Bitcoin system as nobody owes it. (As you know, you cannot lose the thing that you don’t owe.)
Bitcoin as a unit of exchange
Term bitcoin with a small b usually refers to the digital money. This digital money or cryptocurrency is a unit of exchange which can enhance online payments within the whole world making the payments simple, fast and secure. This kind of money isn’t backed by gold or other precious metals, as well as it is not backed and is not controlled by the government or any other institution. The supply of bitcoins is fixed at 21 million bitcoins.
Note: You need to differentiate the Bitcoin and the bitcoin terms. The former term means the whole payment infrastructure while the latter one is just a currency, an application of Bitcoin.
Bitcoin as a software
Bitcoin is a peer-to-peer network of participants (nodes) where each of them is running the software. This software is open-source, and, thus can be downloaded, used and modified by anyone free of charge.
Bitcoin is an API for money, where bitcoin cryptocurrency is just one example of possible application. Instead of it there can be smart contracts.
Another popular definition of Bitcoin is that it is a cryptographic protocol which creates a contributed consensus. To understand the protocol term it is enough to compare it with API.
Note: API (application programming interface) is a set of rules that enables an interaction of a system with users. While a protocol is a set of rules that enables an interaction of a system with its own components. E.g. a user makes a request for sending money, API passes it to the system which with the help of a cryptographic protocol assembles the whole transaction from a number of components and fulfills the transferring function. Voi La, the funds are sent.
Bitcoin as a technology
The Bitcoin underlying technology is called a block chain, an ever-growing chain of blocks. This term stands for a distributed database or public asset ledger which consists of blocks with transactions. Each node of the network has a copy of this database.
To transfer funds the sender needs to sign a message with 1. The transaction amount 2. Receiver info via his / her cryptographic private key. After that the transaction will be broadcasted to the Bitcoin Network and then included into the public ledger. Using web-based service Block Explorer anyone can check real-time and historical data about the bitcoin transactions without the need to download the software.
The blockchain technology is claimed to be a breakthrough as it opens doors to new applications related to value transferring. Smart Contracts is just one example of such application.
ethereum rotator supernova ethereum bitcoin dark Istanbul - December 2019эмиссия bitcoin взлом bitcoin магазины bitcoin bitcoin png Block mining is the process of attaching new transaction records as blocks to the blockchain. In the process – using bitcoin as an example – new bitcoins get produced, adding to the total number of coins in circulation. Mining requires a specific piece of software that is used to solve mathematical puzzles, and this validates the legitimate transactions which make up blocks. These blocks get added to the public ledger (blockchain) about every 10 minutes. As the software solves transactions the miner is rewarded with a set amount of bitcoins. The faster a miner’s hardware can process the mathematical problem, the more likely it is to validate a transaction and earn the bitcoin reward. The main cryptocurrenciesbitcoin трейдинг bitcoin это ethereum валюта bitcoin information bitcoin проверить average bitcoin ethereum сегодня