What Is Bitcoin, Blockchain, and Mining?
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| Bitcoin (BTC) |
What is Bitcoin?
Bitcoin is a payment system, simple and simple. Think about how you can make payments with Visa / Mastercard, Debit and Paypal cards, that's Bitcoin. Bitcoin is just another payment system where the currency used is called Bitcoin (BTC).
Unlike traditional payment systems where Visa / Mastercard, Bank or Paypal run networks, control transactions and hold your money.
The Bitcoin payment system is run by the community. The whole system is maintained, verified, security by individuals like yourself. And most importantly you control your own money.
The payment system has a permanent record that cannot be damaged, covered up or changed. After the transaction is made, it is recorded in the system (aka blockchain) forever.
No authority can hold funds, make chargebacks, or reject your account.
And everyone is anonymous in the payment system. There is no identity shared other than the wallet address. More about that later.
Who Created Bitcoin?
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| Anonymous |
No one knows.
The original Bitcoin WhitePaper was submitted in 2008 by someone who came out of the fake name Satoshi Nakamoto. Recently there were some people who came out and said they were Satoshi Nakamoto but no one really knew.
What Is A Blockchain?
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| Blockchain |
I mentioned above that transactions are permanently stored in the payment system, which is done on the blockchain.
What does it mean?
Think of an excel spreadsheet that is full of everyone's transactions that can be seen and written by everyone in the payment network. Everyone is connected. Nothing is hidden and nothing can be changed without consensus from other parties.
This spreadsheet is stored in blocks that are created every 10 minutes. Each block is chained to an existing chain, called the blockchain.
But who created these blocks?
The miners go through a process called mining.
What is Bitcoin Mining?
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| Mining |
To verify and place new transactions in the Bitcoin payment system, mining is done.
Here's the explanation:
The payment system is gamified to make miners compete with each other.
The more miners contribute to the system by verifying and adding transactions to new blocks, the more they can generate in Bitcoin. And that's not all with gamification, the payment system makes it increasingly difficult for miners to get Bitcoin because more and more miners contribute.
Why?
Because the founder wanted the Bitcoin payment system to last for a long time. Through gamification, the founder found a way to create a community to keep the system alive and keep it alive for hundreds of years.
