Bitcoin what is it simple

Benefit 3 — Limited Supply Traditional money is created by governments in unlimited quantities. The world is also becoming an increasingly cashless society, which can sound great at first but comes with a large amount of dystopian baggage. This means a bitcoin cheater needs to outpace all the other bitcoin miners to change the bitcoin history. Additionally, Bitcoin stores all past transactions permanently so that there is a record of where all bitcoin currently are.

BITCOIN AND GOLD

This article goes through the concepts of decentralization, mining, and blockchain on a bitcoin what is it simple level to give fledgling cryptocurrency enthusiasts a down-to-earth understanding of what Bitcoin is, and why the technology and concepts are considered highly impactful to the global economy. Traditionally, when you siple money, the receipt of your transaction has to be recorded. In this way, banks and credit card companies can keep track of what, where, when and why you spend. But just as important as recording onto the ledger is maintaining the legitimacy of the ledger. Bill and Rebecca are finalists in a spelling bee. There is one judge. There are audience members.

Discover how Bitcoin works and why it’s so popular.

If you cut the information inside computers into smaller pieces, you will find 1s and 0s. These are called bits. You already know about coins. Bitcoins are just the plural of Bitcoin. They are coins stored in computers. They are not physical and only exist in the digital world! By the end of the guide, even total beginners will understand what Bitcoin is, how to get Bitcoin, and how to use Bitcoin.

The basics for a new user

A humble attempt to interpret BitCoin and Blockchain simple as a story. Money is the representation of worth or value that we are holding, using a medium or an instrument provided by any central authority or any trusted third party.

These financial instruments have some common features too. Nobody in the world can have exactly skmple same note as you are having, and when you transfer or give it to someoneyou loose it. You cannot hold it and give it to some one like in the case of a digital media file. You can just copy a file and share to. But not money. So what this bitcoin did is they made a network of computers, where anybody from anywhere can join the network,and you can have a unique representation of your value using Bitcoin in that network.

So basically Bitcoin is an instrument provided by the network called Blockchain to represent unique value using internet. That means if you hold a bitcoin, no one in the network can hold the same bitcoin, and you cannot simultaneously share it and have the possession. That is you cannot hold and share the same bitcoin, reproducing the same features of our traditional financial instruments in a digital environment.

Why Bitcoin or similar systems are substantial for the existence of a sustainable economical environment? So in the present day situation we have the only choice to depend third party systems to represent the value that we generate. How will they represent value generated? We can simply represent a unique value we are holding with the help of an internet connection and can able to make transfer of these values to others with out using an independent third party organisation.

Bitcoin is operated with in a network of computers, and a database of all the transaction that every participants make in the blockchain network. Reconciliation of the balance is automatically done by network and verification of transactions made inside the network is done by other participating parties.

So with out having a central third party authority, you are able to represent your worth and able to transact it to anywhere irrespective of land, culture, border, or. You just need an internet connection and a device i do. This is our humble effort to clarify Bitcoin to people who are not having having tech expertise.

Sim;le not hesitate to criticise, as we consider it as an important tool for making ourself better. Happy to help! I wont drag it…. Please do it. Let me explain in Simple English. Will Try to avoid Technical Terms!! Well we used simmple have a Barter System where we used to exchange goods bitcoi other goods such as Rice, Maze.

But we used to give exchange it in Units such as gm, kg, Tone. This was back Years ago now in this 21st Century. I guess you might have already read digital currently and all so, not elaborating on those areas.

These are the few things which will change when bitcoin will come inside the. Imagine a community where the money is based on the integers running from 1, 2, 3, …, up through ehat, At any given time, one person owns the number 8while somebody else owns the number 34,and so on. In this setting, Bill wants to buy a car from Sally, and the price sticker on the car reads, Two numbers.

Bill happens to be in possession of the numbers 18 and So Bill gives the two numbers to Sally, and Sally gives Bill the car. The community recognizes two facts: The title to the car has been transferred from Sally to Bill, and Sally is now the owne The community recognizes two facts: The title to the car has been transferred from Sally to Bill, and Sally is now the owner of the numbers 18 and In this fictitious community, an industry of thousands of accountants maintains the record of ownership of the 21 million integers.

Each accountant keeps an enormous ledger in an Excel file. The columns run across the top, from 1 to 21 million, while the rows record every transfer of a particular number.

For example, when Bill bought the car from Sally, the accountants who were within earshot of the deal entered into their respective Excel files, Now in possession of Sally in the next available row, in the columns for 18 and In these ledgers, if we looked one row above, we would see, Now in the possession of Bill for these two numbers, because Bill owned the numbers before he transferred them to Sally.

Besides documenting any transactions that happen to be within earshot, the accountants also periodically check their own ledgers against those of their neighbors. If an accountant ever discovers that his neighbors have recorded transactions for other numbers i. Therefore, at any given time, there are thousands of accountants, each of whom has a virtually complete history of all 21 million numbers.

Unlike all your digital pictures, videos, programs and documents that can be copied over and over again, the total number of bitcoins is fixed at 21, units. Because of this some people gave it value, and now, it can be used to represent that value, and transfer it back and forth between people who value it.

In the end, the only thing that is for certain, is that there are 21, bitcoins, and ther In the end, the only thing that is for certain, is that there are 21, bitcoins, and there will never be.

The basic idea is that you can use it to pay for things without a third-party broker, like a bank or government. Think of bitcoin like one big ledger shared by all the users: When you pay for something with bitcoin, or get paid, then your transaction is recorded on the ledger.

Computers then compete to confirm the transaction by solving complex math equations, and the winner is rewarded with more bitcoins. Depending on which part jt the world you are in, you must be having dollars, pound, euro, rupees. Hwat this question ever occurred to you: What differentiates normal paper from this fancy printed paper which bears the image of Abraham Lincoln or Mahatma Gandhi?

Herein lies the difference between Bitcoin and any other cur Herein lies the difference between Bitcoin and any other currency. In case of bitcoin, there is no involvement of a third-party financial institution which verifies these transactions. The value will continue to fluctuate depending on how its worth is perceived. Iz total number of bitcoins is capped at 21 million, which means that once the number is reached, the value of a bitcoin will increase thereafter given that the demand does not die.

The answer is straight forward. The lt of bitcoin is only going to increase, given the trend and the cap of 21 million which has been imposed on its number. There are 3 main ways in which anyone can earn bitcoins —. Convert your currency to bitcoin using hundreds of online exchanges which trade in many currencies. Provide goods or services in exchange for bitcoins. The first two are whaf transactions which can easily be visualized with physical currency as.

The third one is a little tricky. Just like real miners exert a bitcoin what is it simple of effort to retrieve gold and diamond, it takes a lot of effort to gain bitcoins. The mining procedure is a special characteristic of the bitcoin. In the case of bitcoin, however, there is no central control agency which validates the transactions.

Instead, the transactions are verified iz users having powerful computing devices, who gain bitcoins for their efforts. The first mining activity was done by Satashi Nakamoto, the originator of bitcoin who gained 50 bitcoins for the job. In fact, this is the only way new bitcoins are created. As the number of transactions throughout the world increase, the reward for mining reduces.

Whenever the reward for mining will go to zero, there will be no more new bitcoins issued. Each transaction, in simple terms, has a mathematical question embedded inside it through code.

Solving that question requires a fast and robust computing power and is a time consuming process. The reward for this activity is bitcoins. So if you want to engage in mining, you might want to consider the cost of running these computers against the reward of bitcoins earned. Following links are useful for understanding more :.

Getting started with Bitcoin mining. Bitcoin is a digital currency with best features that make it suitable for online transactions. This currency is different from the government approved currencies and eimple the following features:.

Bitcoin Currency is Considered Decentralize. Bitcoin currency is called decentralize currency as it is not supported by any authority. Any user who has a wallet for bitcoin and machine that mines bitcoins, can become a part of bitcoin community and also these machines c Any user who has a wallet for bitcoin and machine that mines bitcoins, can become a part of bitcoin bitcoin what is it simple and also these machines can work bitcoib in a network.

Bitcoin transaction has online ledger like a normal ledger, called Blockchain. The transaction fees vitcoin these bitcoij is different from the normal online transactions that happen with the government approved currencies. This should be noted that government of few countries like India do not consider Botcoin a legal currency. When we go to open an account in a normal conventional bank, a lot of bank formalities need to take care of. But in Bitcoin online transactions, no such formalities need to follow, and one can open his account within few seconds.

This type of banking also does not need standing in long queues. All the transactions happen in bitcoins are transparent and very little chances of any fraud. Every user gets a private key and has records of all his transactions in a general ledger called the blockchain.

Every user has an address, and one can know how many bitcoins are there in that address without knowing that it belongs to. Bitcoin allows multiple accounts to a single user depending upon his requirements like public, private or business or any other purpose. The bitcoin transaction happens very fast, and the money sent from anywhere can reach you within minutes. The whole bitcoin transactions charge very low nominal fees which is ot negligible.

What is Bitcoin?

It will be updated and verified by the public ledger. All you use to receive money is your Bitcoin address. Support Bitcoin. Bitcoin is designed to let you store, send, and receive money without any banks or credit card companies. Miners are willing to spend expensive computing resources on this work because they bitcoin what is it simple also rewarded with newly-created bitcoin and any transaction fees associated with the transactions in the newly added block. All these copies are kept in sync by the system that runs the Blockchain. Bitcoin uses cryptography to securely send payments. This structure makes the system extremely difficult to shut. In fact, they get brand new bitcoins which were just created by the. Not needing a third party like a bank to handle accounts and transactions has a lot of benefits. Bill and Rebecca are finalists in a spelling bee. Some people are smart; some are misinformed. Well, the reality is, the majority of governments have not made indications that they hate it; instead, they are trying to regulate it. A Bitcoin address, or simply address, is an identifier of letters and numbers, beginning with the number 1 or 3, that represents a possible destination for a bitcoin payment.