Cryptocurrency

What is Bitcoin and How does it Work

How a Bitcoin transaction works is simple Imagine that you have sent a bitcoin from your Bitcoin wallet to someone else so the Minner you are connected to will see if there is enough Bitcoin in your wallet. So if there is enough, I will send the relevant amount of Bitcoin to the other person. Send a message to every Minner in the Bitcoin Blockchain that a transaction like this has taken place. So he can never lie to the Bitcoin Blockchain. That means it cannot be hacked. If hacked, all those miners, that is, billions of computers would have to be hacked. So he can never hack the Bitcoin Blockchain which means we can not change the data in the Blockchain as we want. We're going to talk about Bitcoin Mining in a future article, so we're not going to talk about this here at the moment. When making a transaction through a bank, the bank has the ability and power to prevent the transaction if necessary. Therefore, transactions through banks can be cited as an example of a Centralize Network. Bitcoin miners in the Bitcoin network contribute to the maintenance of Bitcoin transactions, but are unable to control it. It can be identified as a Decentralize Network and Bitcoin Network or Bitcoin Blockchain can be identified as a combination of a Decentralized Network as well as a Distributed Network because it connects everyone through Bitcoin Blockchain.

What is Bitcoin and How does it Work ant that is the Cryptocurrency

First of all what is the Cryptocurrency?? actually A cryptocurrency is an encrypted data string that indicates a unit of currency. It is monitored and regulated by a peer-to-peer network called the blockchain, which also acts as a secure ledger of transactions, for example, buying, selling and transferring.

The idea of ​​a digital currency or cryptocurrency to replace the traditional currency we use today came about with the dawn of the digital age in the world. So, after about 1980, I started researching this. Somehow in the 1990s an American named David Chaum did a lot of research. But this did not become a reality at that time due to the lack of advanced development of the internet as well as equipment.

Bitcoin emerged as the world’s first successful cryptocurrency in 2009 with the gradual technological advancement of the world. It is based on the concept of Satoshi Nakamoto. So here today no one knows whether this Satoshi Nakamoto is an individual, a group or an organization.

We will now talk about Bitcoin and some of the things we need to know when working with Bitcoin.

Symbol and short name of Bitcoin and What is Bitcoin

Like every currency in the world, Bitcoin has a symbol and a short name. For example, $ is used as the symbol for the US dollar and the short name is USD. Similarly for Bitcoin

  • Mark –  ₿
  • Short Name – BTC

Used as. Also, whether Bitcoin is a digital currency or a cryptocurrency, Bitcoin is also subdivided. Just like the dollar is divided into cents. So Bitcoin also divides into tens of millions. The smallest partition is called a Satoshi. We can express it this way.

  • 1 BTC = 10000000 Satoshi
  • 0.00000001 BTC = 1 Satoshi

Also, when Satoshi Nakamoto gave his idea about Bitcoin, the file contained everything about Bitcoin, the way Bitcoin works, and changes in the future. This file is called Bitcoin Whitepaper.

Here you can see the Whitepaper of Bitcoin. Somehow after Bitcoin another large number of cryptocurrencies were created. All newly created and created cryptocurrencies have a Whitepaper. If you are investing in a cryptocurrency it is very important to study Whitepaper well. This is very important when investing in the latest cryptocurrency.

 

Activation of Bitcoin

You all know now that Bitcoin is a digital currency. So in a country where governments control and maintain every currency, governments and banks are directly involved. Through it they have the ability to print money. So the government and the banks are directly involved in our use of ordinary money. Imagine that the bank acts as an intermediary when we send money to someone abroad.

But in the case of Bitcoin, this is quite different. Bitcoin works through a technology called blockchain. So the Bitcoin network or Bitcoin blockchain is run by the people who use Bitcoin. When sending Bitcoin to someone else you do not need another party as an intermediary. Because of blockchain technology, no one but the two parties to the transaction can know about this transaction. Simply put, Bitcoin protects our privacy and enables us to transact business.

Briefly about Bitcoin Miners and Bitcoin Mining

Let us explain What is Bitcoin and How does it Work process like this: As we said earlier, a network with an intermediary transaction (Network) can be described as a Centralize Network.

Also, a Peer to Peer Network is a network in which two people can make a direct or another person (Person to Person) transaction without an intermediary. So there is no Central Authority to control the Bitcoin network or blockchain. But there are people who contribute to the running of the Bitcoin blockchain. They call themselves Bitcoin Miners.

So let’s talk a little bit about Bitcoin Mining. Running a Bitcoin Blockchain requires a large number of interconnected computers. So the Bitcoin Blockchain gives a small amount of Bitcoin Rewards to the connected computers.

This is why he says he can make money by mining Bitcoin. What we wanted to explain was that Bitcoin Miners themselves conduct Bitcoin Bitcoin transactions or transactions by linking customers. So a large number of Bitcoin Miners are connected to the Bitcoin Blockchain.

How a Bitcoin transaction works is simple

Imagine that you have sent a bitcoin from your Bitcoin wallet to someone else so the Miner you are connected to will see if there is enough Bitcoin in your wallet. So if there is enough, I will send the relevant amount of Bitcoin to the other person. Send a message to every Miner in the Bitcoin Blockchain that a transaction like this has taken place.

So he can never lie to the Bitcoin Blockchain. That means it cannot be hacked. If hacked, all those miners, that is, billions of computers would have to be hacked. So he can never hack the Bitcoin Blockchain which means we can not change the data in the Blockchain as we want. We’re going to talk about Bitcoin Mining in a future article, so we’re not going to talk about this here at the moment.

When making a transaction through a bank, the bank has the ability and power to prevent the transaction if necessary. Therefore, transactions through banks can be cited as an example of a Centralize Network.

Bitcoin miners in the Bitcoin network contribute to the maintenance of Bitcoin transactions, but are unable to control it. It can be identified as a Decentralize Network and Bitcoin Network or Bitcoin Blockchain can be identified as a combination of a Decentralized Network as well as a Distributed Network because it connects everyone through Bitcoin Blockchain.

What is Bitcoin and How does it Work

I think you now have some understanding of What is Bitcoin and How does it Work process as well as Blockchain Technology. Although we will talk about this in a simple way, blockchain technology like Bitcoin is a very complex process. Cryptocurrency is just one of the many benefits of this blockchain technology.

In the next article in the series Learn About Bitcoin, we will talk about what a Bitcoin Wallet is and how it can be useful to us.