give me 5 stars.
That is Bitcoin is a decentralized digital currency “Currency ” because like the dollar, the euro, or the yen, “digital ” because there is only in the world of computers in the end a Bitcoin is used to buy things.
There is no such thing as a paper bitcoin and ‘ decentralized ‘ because unlike traditional banknotes, this currency does not depend on either governments or banks.
That’s the important part of the story the Bitcoin system works without an administrator and that has some very interesting repercussions.
Before you talk about Bitcoin It’s a good idea to ask yourself about what is common money here we propose that you think about money as a technology designed to keep your accounts.
What are the accounts of favors?
The accounts of the favors that we owe among ourselves, especially among strangers, with friends we do not want to have an exact idea of who has done more for others, but among strangers the situation is different.
What between friends is called “favor ” Between strangers is called “work ” and there we are interested in having clear accounts if you do something for others it is reasonable to expect others to do something for you.
Well, it is the money that helps us to quantify that “something ” The ticket you receive in exchange for your work is nothing more than a role that certifies that society owes you favours.
How Bitcoin works.
You decide who you charge that favor but the point is that we move the papers from one place to another to remember who have worked for others is understood?.
Well now think that this system is vulnerable because if I get to counterfeit money basically I’m making up that I did favors to others, then, no way, you have to entrust someone the resposibilidad to produce.
A special role that is very fucked to falsify that “someone ” is the state and in cases in which the paper does not change hands as in the electronic transactions is to entrust someone with the responsibility of updating the accounts.
That "somebody " is the banks said all that.
What is the idea of Bitcoin?
Well if the underlying problem is to find an efficient and secure way to keep the Bitcoin accounts is another technology that is set to do the same but with the difference that this time we do not want to entrust to anyone the power of altering that information.
No one with the power to print money and no one to update the accounts on behalf of others, the reasons for doing this can be many and very diverse, but let’s stay with two:
One is that the transactional system of banks is very costly especially for international payments and the other that many governments have the knack of printing money as crazy and this distorts the accounts.
(What is technically called "inflation ")
In other words, relying on governments and banks generates a cost to the Bitcoin society was the first of many decentralized digital currencies seeking to eliminate that cost or good, at least to reduce them significantly.
Now let’s go to “how. “
How Bitcon replaces the state and banks
The first thing is to understand the scheme in the normal world an electronic transaction looks like this:
For Alex to give Wendy money he has to send a message to the banks, system administrators and they are the ones who validate the payment and update the accounts in the meantime the state is over there watching.
In Bitcoin, on the other hand, the scheme is decentralized, the community is directly connected and there is no authority to keep an eye on everybody’s accounts all over the world.
The key is to understand the dynamics of the system: it is not that Alex and Wendy spend coins alone leisurely what really occurs is that Alex tells the entire community that wants to pay a bitcoin to Wendy.
The Community first validates the information, that is, Alex is Alex and has enough money and then everyone notes that Alex now has a bitcoin less and Wendy one more bitcoin. It’s that simple.
How the accounts are kept.
The accounts are maintained by the community and the value of the currency is that people trust the system but let’s clarify some things the first thing is that everyone is anonymous.
It is not someone’s identity that is validated, but their password the Bitcoin community knows how much money Alex’s account has but does not know who owns that account.
This is related to the second clarification and is that they are computers that are talking to each other, not users as such for users to send Bitcoins is as easy as sending an email.
But for computers validating the information is heavy work because in Bitcoin everything is protected and very well protected by cryptography or, by a trail of algorithms and mathematical functions that prevent any attempt to alter the information.
What are the user types?
It is also important to know that there are two types of users: those who verify transactions and those that are not important because those that verify buy computers expensive and leave them on all day processing information.
Something that may seem very mysterious just keep in mind that this activity is so voluntary, how to make corrections in Wikipedia. Well, well, is this safe?
Well, yes. Just there is the magic of Bitcoin is a cryptocurrency but here we get to the point where the thing gets complicated. It has to be explained:
How come the accounts don’t go crazy if everyone is doing transactions at the same time and there’s no central administrator who gets those messages and organizes them? Whoever wants to run off before we get into that swamp is all right.
Which is a Blockchain.
You really can’t live quietly with the idea that Bitcoin is a cryptographically protected system in which everyone accounts for all but for the brave here’s the explanation of “Blockchain “.
Let’s go back to the transaction between Alex and Wendy. We had said that Alex sends a message to the whole community now ask that contains that message because it has three things:
It has the digital signature of Alex so that everyone could verify that they are talking with the owner of the account also has the instruction to transfer a bitcoin to Wendy so that everyone knows what to do.
How transactions are made.
Finally, it has the reference to one or several transactions of the past with what Alex proves that he does have money to pay if all these things are well we know that Alex is not telling lies.
Then your message becomes a possible transaction but we still can’t write that down in the account book because there is a problem and it is the mess.
As Bitcoin does not have a central administrator, many transactions are being validated in different locations and in a different order.
Notice that in this case each received the same messages, but are in another order the challenge then is that everyone agrees in the same order that all copies of the book accounts are equal.
So it appears the concept of Blockchain this concept refers to the strategy of packaging several transactions in the same block call candidate block and choose one of the candidate blocks to chain it.
Officially to the past transactions the grace is that when a block joins the chain it becomes official and impossible to modify.
How to choose the winning block.
With a raffle. The decision is random. It is a sophisticated raffle in which those users who are proposing an order use all the processing power of their computer to decrypt a password.
The one who decrypts the key at the tip of random attempts wins the right to define the next official block and everyone else has to listen and write down that block in their account book.
How long the Blocks keys last.
Bitcoin is designed so that someone finds the key every ten minutes, on average. In other words, every ten minutes there is a new official block.
Well, why waste expensive equipment to validate someone else’s transactions? What incentive does someone have to do all that work?
Well 12.5 bitcoins, that at the time of recording this Article are more than 4,007.00 US Dollars It’s up to Google because the price changes very fast.
but the point is that there is a good reward for those who validate transactions. This is the last piece of the puzzle as it is the way new currencies enter the Bitcoin economy.
Here no one makes the decision to print more money. By design was defined with how much money we started, how much new money is created, and who receives that money, who wins the raffle.
What does Bitcoin have to do with Criminals?
Very little, The issue is that as Bitcoin users are anonymous and transactions can be made from anywhere in the world, then, we have a more powerful technology that facilitates legal activities but also illegal.
In any case the news is not that Bitcoin is used to collect bailouts the news is not even that the price of bitcoin continues to rise with respect to the dollar.
The real news is that humanity now has a technology that is capable of transferring value digitally without the help of an intermediary And that, where they see it, is a revolution.
We saw that bitcoin has many interesting things to show and how this cryptocurrency is used, or rather how this system works, which is quite safe.
Thank you for reading this article I hope it helps you to have a clear idea of what bitcoin is Bitcoin and how it works.
If you want to support us, how about making a donation in bitcoin? This is the address of our wallet.
Send Bitcoin to the following receiver address:
The amount does not matter is more exciting the idea of receiving a penny at zero cost from anywhere in the world.
Thank you for reading this article I hope it is useful and that it helps you to understand well what it is and how to use bitcoin.
please give me 5 stars and share this article with a friend who will be interested in the subject of truth that you would help a lot to this blog with that without see you later friends.