Bitcoin online earning

 

WHAT IS BITCOIN?

Bitcoin is open source, permissionless, peer to peer programmable money. The supply is hard capped at 21 million coins, which cannot be changed. The network is peer-to-peer and transactions take place between users directly, without an intermediary such as a central bank. These transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain.

The various avenues will be revealed when going down the rabbit hole, and the journey will be captivating. With this article, you can start learning about Bitcoin’s purpose, who creates the coins, and if it is real money, including more practical advice about buying bitcoin and how to keep your coins safe.

Bitcoin (with an uppercase letter B) refers to the protocol, software, and network, while bitcoin (with a lowercase b) describes the native monetary asset.

ORIGINS OF BITCOIN

Unveiled by a mysterious person or a group known as Satoshi Nakamoto, it is the first cryptocurrency ever created and was described in detail in the white paper published on October 28, 2008. A digital version of cash, which in its physical form is inherently peer-to-peer, was the hardest thing to build, and the genius of Satoshi was to combine existing technology and processes to overcome the enduring issue of double-spending digital currencies without relying on a third party.

HOW DOES IT WORK?

When users send or receive bitcoin, their transaction is sent to the network of nodes. Each node receives the file and verifies that it’s legitimate. Once verified, it’s added to the Mempool and then passed onto the other nodes in the network. The Mempool stores valid, yet unconfirmed transactions.

Miners then group those transactions together and create a block of transactions, typically selecting those transactions with the highest fees first. Each block is encoded with a block header, transaction counter and transactions, which contains supporting information about the transactions and the hashes.

Miners then compete with each other to be the first to append the next block to the blockchain. The miner or mining pool with the most computational power has the best chance of doing so, however that isn’t deterministic. Transactions are confirmed and new blocks are added thanks to a proof-of-work (PoW) consensus algorithm that requires miners to find a valid hash below a target set by the network. The successful miner is rewarded with new bitcoin as a reward for securing the network; this is known as the block reward and it’s how new coins are minted.

Each block is linked to the previous block thus creating a chain of blocks that cryptographically establishes a public record of valid transactions that can’t be altered (immutable) without altering its block and the ones after it..

It’s worth noting that the protocol defines the rules and PoW determines how these rules will be followed and is regarded as one of the most secure solutions to the Byzantine Generals Problem, a more academic term for solving the double-spending problem without relying on any third party.

Users don’t need to know how Bitcoin works precisely, like they probably don’t know how the internet works despite benefiting from its use. However, it is helpful to grasp the basics as this will help them understand why Bitcoin matters.