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Disclaimer : The following serves educational purposes only. What you do with possessions you handle and/or own, is your responsibility and yours alone. This is not financial advice.

Bitcoin

Internet money, as easy as email.

Pay anyone, anywhere, anytime.

Bitcoin is digital, not coin.

A payment request is sent to a vast network of many thousands of voluntary participants.
Many of them have substantially invested in specialized equipment(ASICs), they are miners.

Every full participant has a complete history of all transactions since 2009 in a ledger, the blockchain.

Every 10 minutes a block of new transactions is published by a miner group, who are first of many other competing miners to solve a specific puzzle for their block. That block is then added to all copies of the blockchain.

The miners' reward is 12.5 bitcoins, which they divide among themselves, their group, their pool.

This is the only way new bitcoins are added to the system. The reward is halved every 4 years, so growth diminishes, stopping in the 22nd century, when a total amount of 21 million will have been reached.
This is not the actual limit, since each bitcoin can be subdivided into 100 million units, Satoshis.

The ledger, the blockchain, only contains transactions. One bitcoin address gets plus so much, another one so much minus. The balance of a bitcoin address is the sum of those transactions.
This is all set in motion by miners selling their rewards for, in most cases, old money.

However, this is not just about new money, it's an important technological breakthough, that makes things like renting, notarization, escrow services, inheritance, political support, charity, voting, proof of ownership, cultural support, supporting bloggers, much, much easier.

See the system operate. (blockchain.info)

One of the blocks with its transactions.

This explanation has been simplified, there's much more to it.



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