What is a Bitcoin

What is a bitcoin?

Bitcoin is a digital asset and a payment system invented by Satoshi Nakamoto. Transactions are verified by network nodes through cryptography and recorded in a public dispersed ledger called a blockchain. Bitcoin is unique in that there are a finite number of them: 21 million.

Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services. As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment.

Research produced by the University of Cambridge estimates that in 2017, there were 2.9 to 5.8 million unique users using a cryptocurrency wallet, most of them using bitcoin.

What is a satoshi?

A satoshi is the smallest unit of a bitcoin. It is named after Satoshi Nakamoto, the creator of bitcoin.

A satoshi is equal to 0.00000001 bitcoins. This allows for very fine-grained transactions, as each satoshi represents a very small amount of value.

What is mining?

Mining is how new bitcoins are created. Miners are rewarded with bitcoins for verifying and committing transactions to the blockchain, a decentralized and public ledger.

Mining is a computationally intensive process that requires special hardware and consumes a lot of energy. It is estimated that miners worldwide spend over $1 billion per year on electricity costs.

What is a blockchain?

A blockchain is a digital ledger of all cryptocurrency transactions. It is constantly growing as “completed” blocks are added to it with a new set of recordings. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. Bitcoin nodes use the block chain to differentiate legitimate Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere.

What is a bitcoin wallet?

A bitcoin wallet is a software program where bitcoins are stored. Wallets are either offline or online. Online wallets can be further divided into web-based and desktop wallets.

Web-based wallets store your private keys online and allow you to access your bitcoins from any computer or mobile device. Desktop wallets are installed on your computer and give you full control over your wallet.

What are private keys?

Private keys are a string of numbers and letters that are used to access your bitcoin address and sign transactions. They are similar to a password, but much longer and more complex.

Your private keys should never be shared with anyone, as they allow access to your bitcoins. If someone were to get their hands on your private keys, they could access your bitcoins and spend them without your permission.

What is a bitcoin address?

A bitcoin address is a unique string of numbers and letters that represents a destination for a bitcoin payment. Bitcoin addresses can be generated at no cost by any user of Bitcoin.

What are the biggest bitcoin competitors?

Bitcoin has the largest market share of any cryptocurrency, but there are several other well-known competitors.

Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of fraud or third-party interference.

Ripple is a real-time global settlement network that offers instant, certain, and low-cost international payments.

Bitcoin Cash is a fork of Bitcoin that seeks to add more functionality to the original cryptocurrency.

Litecoin is a fork of Bitcoin that uses a different algorithm for mining, called Scrypt. Litecoin also has lower transaction fees and can confirm transactions faster than Bitcoin.

What are altcoins?

Altcoins are alternative cryptocurrencies to Bitcoin. They often have similar features and purposes, but there are also many differences. Some well-known altcoins include Ethereum, Litecoin, and Ripple.

Want to know more about the blockchain? Make sure to like and follow us on Facebook.