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How this bitcoin really works, I want to know more of it

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How exactly to categorize Bitcoin is a matter of controversy. Is it a type of currency, a store of value, a payment network, or an asset class?

Fortunately, it's easier to define what Bitcoin actually is. It's software. Don't be fooled by stock images of shiny coins emblazoned with modified Thai baht symbols. Bitcoin is a purely digital phenomenon, a set of protocols and processes.

It is also the most successful of hundreds of attempts to create virtual money through the use of cryptography, the science of making and breaking codes. Bitcoin has inspired hundreds of imitators, but it remains the largest cryptocurrency by market capitalization, a distinction it has held throughout its decade-plus history.

(A general note: According to the Bitcoin Foundation, the word "Bitcoin" is capitalized when it refers to the cryptocurrency as an entity, and it is given as "bitcoin" when it refers to a quantity of the currency or the units themselves. Bitcoin is also abbreviated as BTC. Throughout this article, we will alternate between these usages.)

KEY TAKEAWAYS:

Bitcoin is a digital currency, a decentralized system that records transactions in a distributed ledger called a blockchain.

Bitcoin miners run complex computer rigs to solve complicated puzzles in an effort to confirm groups of transactions called blocks; upon success, these blocks are added to the blockchain record and the miners are rewarded with a small number of bitcoins.

Other participants in the Bitcoin market can buy or sell tokens through cryptocurrency exchanges or peer-to-peer.

The Bitcoin ledger is protected against fraud via a trustless system; Bitcoin exchanges also work to defend themselves against potential theft, though high-profile thefts have occurred.

The Blockchain:

Bitcoin is a network that runs on a protocol known as the blockchain. A 2008 paper by a person or people calling themselves Satoshi Nakamoto first described both the blockchain and Bitcoin, and for a while, the two terms were all but synonymous.

The blockchain has since evolved into a separate concept, and thousands of blockchains have been created using similar cryptographic techniques. This history can make the nomenclature confusing. Blockchain sometimes refers to the original Bitcoin blockchain. At other times, it refers to blockchain technology in general, or to any other specific blockchain, such as the one that powers Ethereum.

The basics of blockchain technology are mercifully straightforward. Any given blockchain consists of a single chain of discrete blocks of information, arranged chronologically. In principle, this information can be any string of 1s and 0s, meaning it could include emails, contracts, land titles, marriage certificates, or bond trades. In theory, any type of contract between two parties can be established on a blockchain as long as both parties agree on the contract. This takes away any need for a third party to be involved in any contract. This opens up a world of possibilities including peer-to-peer financial products, such as loans or decentralized savings and checking accounts, wherein banks or any intermediary is irrelevant.

Though Bitcoin's current goal is to be a store of value as well as a payment system, there is nothing to say that Bitcoin could not be used in such a way in the future, though consensus would need to be reached to add these systems to Bitcoin. The main goal of the Ethereum project is to have a platform where these "smart contracts" can occur, therefore creating a whole realm of decentralized financial products without any middlemen or the fees and potential data breaches that come along with them.

This versatility has caught the eye of governments and private corporations; indeed, some analysts believe that blockchain technology will ultimately be the most impactful aspect of the cryptocurrency craze.

In Bitcoin's case, though, the information on the blockchain is mostly transactions. 

Bitcoin is really just a list. Person A sent X bitcoin to person B, who sent Y bitcoin to person C, etc. By tallying these transactions up, everyone knows where individual users stand. It's important to note that these transactions do not necessarily need to take place between humans.

Anything can access and use the Bitcoin network, and your ethnicity, gender, religion, species, or political leaning is completely irrelevant. This creates vast possibilities for the Internet of things. In the future, we could see systems in which self-driving taxis or Uber vehicles have their own blockchain wallets. The passenger would send cryptocurrency directly to the car, which would not move until the funds were received. The vehicle would be able to assess when it needs fuel and use its wallet to facilitate a refill.

Another name for a blockchain is a "distributed ledger," which emphasizes the key difference between this technology and a well-kept Word document. Bitcoin's blockchain is distributed, meaning that it is public. Anyone can download it in its entirety or go to any number of sites that parse it. This means that the record is publicly available, but it also means that there are complicated measures in place for updating the blockchain ledger. There is no central authority to keep tabs on all Bitcoin transactions, so the participants themselves do so by creating and verifying "blocks" of transaction data. See the section on mining below for more information.

Despite being absolutely public, or rather because of that fact, Bitcoin is extremely resistant to tampering. A bitcoin has no physical presence, so you can't protect it by locking it in a safe or burying it in the woods.

In theory, all a thief would need to do to take it from you would be to add a line to the ledger that translates to "you paid me everything you have."

A related worry is double-spending. If a bad actor could spend some bitcoin, then spend it again, confidence in the currency's value would quickly evaporate. To achieve a double-spend, the bad actor would need to make up 51% of the mining power of Bitcoin. The larger the Bitcoin network grows, the less realistic this becomes as the computing power required would be astronomical and extremely expensive.

To further prevent either from happening, you need trust. In this case, the accustomed solution with traditional currency would be to transact through a central, neutral arbiter such as a bank. Bitcoin has made that unnecessary, however. (It is probably no coincidence that Nakamoto's original description was published in October 2008, when trust in banks was at a multigenerational low. This is a recurring theme in today's climate of the coronavirus pandemic and growing government debt.) Rather than having a reliable authority keep the ledger and preside over the network, the Bitcoin network is decentralized. Everyone keeps an eye on everyone else.

No one needs to know or trust anyone in particular in order for the system to operate correctly. Assuming everything is working as intended, the cryptographic protocols ensure that each block of transactions is bolted onto the last in a long, transparent, and immutable chain. 

Mining:

The process that maintains this trustless public ledger is known as mining. Undergirding the network of Bitcoin users who trade the cryptocurrency among themselves is a network of miners, who record these transactions on the blockchain. 

Recording a string of transactions is trivial for a modern computer, but mining is difficult because Bitcoin's software makes the process artificially time-consuming. Without the added difficulty, people could spoof transactions to enrich themselves or bankrupt other people. They could log a fraudulent transaction in the blockchain and pile so many trivial transactions on top of it that untangling the fraud would become impossible.

By the same token, it would be easy to insert fraudulent transactions into past blocks. The network would become a sprawling, spammy mess of competing ledgers, and Bitcoin would be worthless.

Bitcoin Transactions:

For most individuals participating in the Bitcoin network, the ins and outs of the blockchain, hash rates, and mining are not particularly relevant. Outside of the mining community, Bitcoin owners usually purchase their cryptocurrency supply through a Bitcoin exchange. These are online platforms that facilitate transactions of Bitcoin and, often, other digital currencies.

 El Salvador made Bitcoin legal tender on June 9, 2021.1 It is the first country to do so. The cryptocurrency can be used for any transaction where the business can accept it. The U.S. dollar continues to be El Salvador’s primary currency.

Bitcoin exchanges such as Coinbase bring together market participants from around the world to buy and sell cryptocurrencies. These exchanges have been both increasingly popular (as Bitcoin's popularity itself has grown in recent years) and fraught with regulatory, legal, and security challenges. With governments around the world viewing cryptocurrencies in various ways—as currency, as an asset class, or any number of other classifications—the regulations governing the buying and selling of bitcoins are complex and constantly shifting.

Perhaps even more important for Bitcoin exchange participants than the threat of changing regulatory oversight, however, is that of theft and other criminal activity. Though the Bitcoin network itself has largely been secure throughout its history, individual exchanges are not necessarily the same. Many thefts have targeted high-profile cryptocurrency exchanges, often resulting in the loss of millions of dollars worth of tokens. The most famous exchange theft is likely from Mt. Gox, which dominated the Bitcoin transaction space up through 2014. Early in that year, the platform announced the probable theft of roughly 850,000 BTC worth close to $450 million at the time. Mt. Gox filed for bankruptcy and shuttered its doors; to this day, the majority of that stolen bounty (which would now be worth a total of about $8 billion) has not been recovered.

Keys and Wallets:

For these reasons, it's understandable that Bitcoin traders and owners will want to take any possible security measures to protect their holdings. To do so, they utilize keys and wallets.

Bitcoin ownership essentially boils down to two numbers, a public key and a private key. A rough analogy is a username (public key) and a password (private key). A hash of the public key called an address is the one displayed on the blockchain. Using the hash provides an extra layer of security.

To receive bitcoins, it's enough for the sender to know your address. The public key is derived from the private key, which you need to send bitcoins to another address. The system makes it easy to receive money but requires verification of identity to send it. 

To access bitcoins, you use a wallet, which is a set of keys. These can take different forms, from third-party web applications offering insurance and debit cards, to QR codes printed on pieces of paper. The most important distinction is between "hot" wallets, which are connected to the Internet and therefore vulnerable to hacking, and "cold" wallets, which are not connected to the Internet. In the Mt. Gox case above, it is believed that most of the BTC stolen were taken from a hot wallet. Still, many users entrust their private keys to cryptocurrency exchanges, which is essentially a bet that those exchanges will have stronger defenses against the possibility of theft than one's own computer would.
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Bitcoin is a cryptocurrency that is invented by Satoshi Nakamoto and it is an investment for many people. It is also used as a cashless payment for every other websites. It's worth increases and decreases each day.
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Ther is no proof that is was invented by Satoshi Nakamoto ,He came out publically to discard this theory.
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Bitcoin is a cryptocurrency Based on the technology of blockchain.It is the first and only cryptocurrency other currencies which were made after this are referred to  as altcoins. The reason for creation of cryptocurrency was for transfering money from anywhere in the world to anywhere without the control of any central athourity . 

the video below helped me to understand Bitcoin better .Check it out 

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The fact is that 'bitcoin' is a type of digital currency. It does not require centralized organizations like banks or governments. Instead, 'bitcoin' directly confirms user-to-user transactions over peer-to-peer internet network.
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Bitcoin works using blockchain technology to create a decentralized, digital currency that is secured by cryptography. Transactions are validated by a network of computers, and new bitcoins are created through a process called mining. The value of bitcoin is determined by market supply and demand, and it can be traded or used to purchase goods and services.
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Each Bitcoin has a digital asset that can be stored at crytptocurrency exchange or in digital Wallet . Each individual coin represent the value of Bitcoin current price but you can also own a partial shares of each coin
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 Each Bitcoin is a digital asset that can be stored at a cryptocurrency exchange or in a digital wallet. Each individual coin represents the value of Bitcoin's current price, but you can also own partial shares of each coin
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Bitcoin uses the SHA-256 hashing algorithm to encrypt the data stored in the blocks on the blockchain. Simply put, transaction data stored in a block is encrypted into a 256-bit hexadecimal number. That number contains all of the transaction data and information linked to the blocks before that block.
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BITCOIN IS A TYPE OF DIGITAL CURRENCY THROUGH WHICH YOU CAN TRADE OR EVEN EXCHANGE IT WITH YOUR CURRENCY. EVERY BITCOIN OR DIGITAL CURRENCY HAS ITS OWN PRICE VALUE. FOR THAT YOU HAVE TO CHECK THE EXCHANGE RATES.
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Bitcoin is a decentralized digital currency that operates on a peer-to-peer network. It uses cryptography to secure transactions and a public ledger called the blockchain to record and verify them without the need for a central authority like a bank.
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Bitcoin operates as a decentralized digital currency, functioning independently of traditional financial intermediaries through the use of blockchain technology. With a capped supply of 21 million bitcoins, its value is influenced by market demand, supply, regulatory changes, and investor sentiment. Transactions are verified by a network of miners, who ensure the security and authenticity of each transaction through solving complex mathematical puzzles. Once verified, transactions are added to a continually growing chain of blocks, creating a transparent and immutable ledger. While offering advantages such as lower transaction fees and increased privacy, it also poses risks due to its price volatility and potential security vulnerabilities. Understanding these dynamics provides a comprehensive insight into Bitcoin's functioning within the digital economy.
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