How do Bitcoins work?

Discussion in 'About crypto currencies' started by Tengkorakfx, Mar 1, 2018.

  1. Tengkorakfx

    Tengkorakfx Active Member

    The value of Bitcoin, like all currencies, is determined by how much people are willing to exchange it for.

    To process Bitcoin transactions, a procedure called 'mining' must take place, which involves a computer solving a difficult mathematical problem with a 64-digit solution.

    For each problem solved, one block of Bitcoin is processed.

    In addition, the miner is rewarded with new Bitcoin.

    To compensate for the growing power of computer chips, the difficulty of the puzzles is adjusted to ensure a steady stream of new Bitcoins are produced each day.

    There are currently about 16 million in existence.

    The Bitcoin protocol – the rules that make Bitcoin work – say that only 21 million Bitcoins can ever be created by miners.

    But these coins can be divided into smaller parts with the smallest divisible amount one hundred millionth of a Bitcoin.

    This is called a "Satoshi", after the founder.
  2. NewbieTrader

    NewbieTrader Member

    How about how mining works? Is Bitcoin still being produced or there is only limited amount of them in the world? If so, then what is mining is all about?
  3. Tengkorakfx

    Tengkorakfx Active Member

    As I knew, bitcoin is like gold in many ways. Like gold, Bitcoin cannot simply be created arbitrarily. Gold must be mined out of the ground, and bitcoin must be mined via digital means. Linked with this process is the stipulation set forth by the founders of Bitcoin that, like gold, it have a limited and finite supply. In fact, there are only 21 million Bitcoins that can be mined in total. Once miners have unlocked this many bitcoins, the planet's supply will essentially be tapped out, unless Bitcoin's protocol is changed to allow for a larger supply. Supporters of Bitcoin say that, like gold, the fixed supply of the currency means that banks are kept in check and not allowed to arbitrarily issue fiduciary media.
  4. andengireng

    andengireng Member

    As I know, the use of bitcoin is as follows

    As a new user, you can simply start using Bitcoin without having to understand the technical details. After you install the Bitcoin wallet on your computer or mobile phone, it automatically creates your first Bitcoin address and you can create more addresses whenever you need them. You can give your Bitcoin address to your friends so they can pay you or vice versa. Very similar to how email works, except that the Bitcoin address can only be used once.
  5. Tengkorakfx

    Tengkorakfx Active Member

    Good info, hopefully this will be useful info for beginners here who are trying to find out about btc or cryptocurrency. Hoping more and more are also aware of this bitcoin so that it can help become a source of income as well and improve our economy.

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