Today’s news talks about Bitcoin, scams related to it, blockchain, cybersecurity, its high volatility… but do you really know how Bitcoin works?
Bitcoin is a digital currency that works without any central control or supervision of banks or governments. Instead, it relies on peer-to-peer software and cryptography. This is what Bitcoin would be in a nutshell.
Released in 2009 by a mysterious developer known as Satoshi Nakamotothis cryptocurrency was the first and most valuable participant of all those that were to come later, with greater or lesser fortune in the world of investment.
However, how does this whole system work? How do you make money with this cryptocurrency? Each Bitcoin is a file stored in a digital wallet, on a computer or smartphone. To understand how it works, it helps to gradually contextualize the different terms.
Bitcoin is based on a digital record called a blockchain. As the name suggests, this is a linked data system, made up of units called blocks, which contain information about each and every transaction, including the date and time, the value, the buyer and seller, and a unique identification code for each exchange.
Users carry out transactions in Bitcoin, either by buying, sending or exchanging this cryptocurrency. Transactions are broadcast to many computers that compete to validate the blocks.
The validation process, known as mining, is completed by cryptocurrency miners who own large computing resources, such as huge hardware systems. Those who solve math problems the fastest earn the right to validate Bitcoin transaction blocks and add new blocks to the chain. in addition to earning Bitcoin for each block they validate.
Most miners of this crypto work together in mining poolssharing both the computing power and the Bitcoin rewards received.
After this, they add blocks to the Bitcoin block chain. Each transaction is triple verified by the sender, the receiver and the rest of the network.
Each new block and the transaction information it contains is instantly copied around the world to local versions of Bitcoin miners, which creates a consensus on the current state of the Bitcoin blockchain.
As you can see, the whole process that they hide behind is not easy, but it happens automatically and with thousands of daily transactions, which ensure our security, although sometimes this has been seen in vulnerability problems
George is Digismak’s reported cum editor with 13 years of experience in Journalism