Explain in detail about what is bitcoin

How-does-Bitcoin-work

How To Get Rich With Bitcoin Even If You Have No Clue About Technology

What Is Bitcoin?

Bitcoin is a decentralized digital currency created in January 2009. It follows the ideas set out in a white paper by the mysterious and pseudonymous Satoshi Nakamoto.12 The identity of the person or persons who created the technology is still a mystery.

Bitcoin offers the promise of lower transaction fees than traditional online payment mechanisms do, and unlike government-issued currencies, it is operated by a decentralized authority.

 

 

what is bitcoin and how does it work

Dear Investor,

I’m writing this letter to dispel a popular myth: Many investors believe it’s already too late to make a lot of money with Bitcoin. Nothing could be further from the truth. Here’s why:

 

The incredible story of how I missed the boat on Bitcoin, still got rich, and how you can do the same.

An intriguing document has just crossed my desk. It was talking about a new kind of digital money called “Bitcoin”. As I read it, I immediately realized what a potential breakthrough this new technology could be. But of course, I was skeptical. Unsure if it would really work in practice. I decided to buy a few bitcoins just in case it was for real and would go on to become successful.

After all, one bitcoin was worth just a few cents.

So I went online to see where I could buy some.

There was no marketplace to buy or sell bitcoin. Bitcoin was too new. Such exchanges simply didn’t exist yet. I knew there was a process for “mining” bitcoin. But I didn’t want to spend days setting up an extra computer. And then install the software, figure out how it actually worked and keep watching over my mining computer.

It was too much of a hassle just to get my hands on some bitcoin that was worth almost nothing at the time. So I decided to keep an eye on Bitcoin and monitor its progress. Fast forward to February 2011. I had gotten busy with other projects and suddenly remembered to check on Bitcoin.

 

 

Understanding Bitcoin

The Bitcoin system is a collection of computers (also referred to as “nodes” or “miners”) that all run Bitcoin’s code and store its blockchain. Figuratively speaking, a blockchain can be thought of as a collection of blocks. In each block is a collection of transactions.

Because all of the computers running the blockchain have the same list of blocks and transactions and can transparently see these new blocks as they’re filled with new Bitcoin transactions, no one can cheat the system.

 

How does Bitcoin work? 

Each Bitcoin is basically a computer file that is stored in a ‘digital wallet’ app on a smartphone or computer. People can send Bitcoins (or part of one) to your digital wallet, and you can send Bitcoins to other people.

Every single transaction is recorded in a public list called the blockchain. This makes it possible to trace the history of Bitcoins to stop people from spending coins they do not own, making copies, or undoing transactions.

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How do people get Bitcoins?

There are three main ways people get Bitcoins.

  • You can buy Bitcoins using ‘real money.
  • You can sell things and let people pay you with Bitcoins.
  • Or they can be created using a computer.

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How are new Bitcoins created?

In order for the Bitcoin system to work, people can make their computers process transactions for everybody. The computers are made to work out incredibly difficult sums. Occasionally they are rewarded with a Bitcoin for the owner to keep. People set up powerful computers just to try and get Bitcoins.

This is called mining. But the sums are becoming more and more difficult to stop too many Bitcoins from being generated. If you started mining now it could be years before you got a single Bitcoin. You could end up spending more money on electricity for your computer than Bitcoin would be worth.

Why are Bitcoins valuable?

There are lots of things other than money which we consider valuable like gold and diamonds. The Aztecs used cocoa beans as money! Bitcoins are valuable because people are willing to exchange them for real goods and services, and even cash.

Why do people want Bitcoins? Check now

Some people like the fact that Bitcoin is not controlled by the government or banks. People can also spend their Bitcoins fairly anonymously. Although all transactions are recorded, nobody would know which ‘account number’ was yours unless you told them.

In an online chat with social media users in January 2021, the world’s richest man, Elon Musk, said he was a big supporter of Bitcoin. He even went as far as to change his Twitter bio to “#bitcoin”.

He has repeatedly shown his support to online currencies in recent years and caused major movements in their values due to his own personal wealth and influence. This particular endorsement led to the value of Bitcoin rising significantly.

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