What’s Bitcoin? A Beginner’s Guide
Since the great financial crisis that hit the world between 2008 and 2009, was born an incredible or even miraculous monetary system called crypto currency thanks to the introduction of the first accepted cryptocurrency : Bitcoin .
What is Bitcoin?
Bitcoin composed of the words Bit (Binary Information Unit) and Coin ( Coin ) is a cryptographic currency and a Peer-to-Peer system.
What’s the BitCoin? A Guide for beginners
It was developed between 2007 and 2008 and the open-source software is published on January 3, 2009 by a certain Satoshi Nakamoto whose real identity remains a mystery until now. For the record Bitcoin is an improvement of the concept of B-money , devised by Wei Dai in 1999, and Bitgold, described in 2005 by Nick Szabo .
Bitcoin solves in particular the crucial problem of the trust model : servers considered as serious vote with their computing power to determine the legitimate transaction chain. In b-money, the servers were supposed to deposit a security deposit according to a mechanism not explicit. The idea of using a chain of proofs of calculation was advanced in the bitgold project although Nick Szabo proposed to use only a majority of addresses to establish the legitimacy of a chain of transactions, which left the entire problem of controlling the number of addresses.
How does Bitcoin work?
The Bitcoin system is located on the Internet. Anyone can become a Bitcoin user by downloading and installing appropriate software on the hardware of their choice, which can range from a simple smartphone to a complex computer system. Once connected to the system, each user can create any number of accounts and conduct transactions by transferring bitcoins from their own accounts to other accounts.
The necessary functions are included in the software called Wallets (wallets).
The main function of the Bitcoin system is to check the validity of the transactions and to indelibly mark them in a public file called the block or block chain , where they can be consulted by all but are protected against any modification. This operation is carried out in two stages:
At first, some nodes of the network ( the “minors” ) constitute a new block by grouping transactions recently carried out and by adding to them a header containing in particular the date and the hour, a sum of control ( “hash” ) which will also serve as the unique identifier of the block, and the identifier of the previous block.
In a second step, each node adds this new block to its local version of the blockchain, after checking the validity of all the transactions it contains and their consistency with the transactions already recorded.