Guide: What is Bitcoin and how does Bitcoin work
Bitcoin is the first and main cryptocurrency. Before Bitcoin, there were no cryptocurrencies, and all existing cryptocurrencies in one way or another evolved from Bitcoin. So, what exactly is Bitcoin?
Bitcoin is software created by the ingenious programmer Satoshi Nakamoto. It is difficult to attribute this program to any class, because with the help of bitcoin, the author has said a completely new word in the field of modern technologies.
Any file on the computer can be copied – theoretically any number of times. Prior to Nakamoto, the only way to restrict copying was to control the user through a single center, usually represented as a server. It is on this principle that electronic money and modern computer banking systems are built. Financial transactions are carried out digitally under the control of the bank or the owner of electronic money.
This central control solves the problem of double spending: since all the data related to electronic payments is stored in one place, it becomes impossible to spend the same money twice.
But there are also two problems:
1. such an electronic payment service can be hacked
2. the owner of the service has the ability to block any payment or any user of the system at any time
At first glance, it seems that it is impossible to solve these two problems. Create a system immune to editing, and even devoid of a control center? You’re kidding! However, it was precisely such a system that Nakamoto created.
Bitcoin is built on blockchain technology. The information, formatted as blocks, is distributed across a global database maintained by a network of computers connected to the Internet and protected by encryption. The incentive for the existence and development of this network is bitcoin – as a part of the blocks, which has the property of having its owner. Block creators (miners) are rewarded with bitcoins. However, the value of bitcoin is not determined by the labor of miners, but by the number of its users (according to Metcalfe’s law, the usefulness of any network is proportional to half the square of the number of its users).
Bitcoin is a digital payment currency and not only in online USA casinos
Bitcoin is programmed in such a way that its emission is limited. That is, it is a value that cannot be freely produced. This is why bitcoin is called not only virtual currency, but also digital gold.
However, all attempts to express the essence of bitcoin using entities that existed before it are lame. Imagine that you need to explain what electricity is to a person who has never seen a single electrical appliance. What does electricity look like? To light in terms of speed and water in terms of propagation? It is to the extent that electricity is like light and water that bitcoin is like money and gold. In fact, we just don’t know yet where the new technology will lead us, just as Thomas Edison could not have foreseen the computer.
The creation of bitcoin paved the way for the storage, replenishment and automatic use of any information of value. It could be property ownership registries or content creator reward systems, or something that we can’t imagine right now. So virtual currency is just one example of the application of the new technology. But this is a very important example.
Bitcoin is a digital currency that has the potential to replace the US dollar as a global reserve currency and new wave in bitcoin casino USA payment system. Bitcoin is a phenomenon that cannot be prohibited, stopped and controlled. It cannot be “thought back”, it already exists. Bitcoin is the path to your personal financial independence and security. This is a new saving technology. That’s what Bitcoin is.