Bitcoin Invention ,Introduction And Its Working
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First Bitcoin software was released in 2009.Bitcoin developed by an unidentified programmer, i.e. This System invented by an unknown programmer or a group of programmers under the name”Satoshi Nakamoto“. Major reasons for keeping Bitcoin’s founder detail identity as the secret is Privacy and its increasing Popularity because it could become very famous worldwide.Satoshi Nakamoto would probably not like to gain plenty of attention from media and government. The purpose is safety as only in 2009 blocks 32,489 were mined the total payout in 2009 was 1,624,500 BTC, which at today’s rates is over $900 millions.
Bitcoin is a decentralized electronic currency that permits quick funds to anybody, everywhere in the world. Bitcoin uses peer-to-peer technology for quick payments that mean any user send/receive funds to another user without any mediator as “decentralized” (the authority to make decisions is at all levels). So Simple we can say that bitcoin is first digital currency that is used for an online transaction between individuals without any involvement of bank or governments.
10−6 micro bitcoin, bit
Basic Concept in Detail -:
Let’s understands this process by example
Suppose Denny and Olivia are friends making an online transaction by the bank, Both have their bank accounts.
When they made a transaction online than money transfers from Denny’s Account to Olivia account. In this case, we have XXX bank as medium or authority that transmits our money. It will take time less or more accordingly depending on server speed.
Now For “Bitcoin” assume
Public Key => as bank account number serves as the address which is released to the world.
Private Key => as ATM Pin, as secret access for your account.
Public and private keys are combination of numbers and letters
Block as =>Bank Statement
Block Chain as =>List of all transactions of bank
So at this system, the individual has one or more addresses, each with a correlated pair of public and private keys. The user which has access to private key can perform a transaction to give some of their bitcoins to somebody else, but anyone can validate the signature using that user’s public key.
Bitcoin uses public key cryptography to make an verify digital signatures.
Sending payments :-
Assume Denny desires to send a bitcoin to Olivia.
Step 1 – Olivia gives their address to Denny.
Step 2 – Denny adds Olivia’s address and the total amount of bitcoins to transfer.
Step 3 – Denny signs the transaction with his private key, and disclose her public key for signature verification.
So user responsibility for above two steps after that Bitcoin system manages to remain.
It is user responsibility to secure their private key so that anyone can’t steal their bitcoins.
Block: – In general words, you can consider block as individual bank statement that is storing recent transaction. Blocks are the files where recent transaction data on Bitcoin network are permanently recorded. Once information recorded on block can’t be updated, removed or altered.
Block-Chain: – With the above example taking bank analogy, so blockchain is like an overall history of bank statements.
that means when a block is completed then it goes in blockchain final database. Every time when block completed, another new block created, there are numerous blocks in the blockchain, all the blocks linked to each other like a chain and every block refer a hash of the previous block to make proper linear blockchain.
Bitcoin Mining -:
Bitcoin Mining considers as record-keeping service. The blockchain is ever-growing in its size and it causes problems like storage & synchronization. So there is need to manage it consistently, so a new term “Bitcoin Mining ” arises that is record-keeping service. On an average, in each 10 minutes, a new block is appended to the block chain through mining.Basically, it helps to resolve the computational problem to discover a new block.The separate individuals and businesses who possess the governing computing power and take part in the Bitcoin network are referred as “miners” and, after new block addition into blockchain and they getting a motivation reward in the form of Bitcoins and transaction charges paid in Bitcoin.
Bitcoin Worth -:
As of April 2017, , 1 bitcoin = $1,223
(For more news and the real-time price of Bitcoin, check out the Investopedia Bitcoin Center)
Real Time Process -:
1. Download a Wallet
Bitcoin is stored,sent and received using software program is termed as a Bitcoin Wallet. A wallet stores the information needed to bitcoins transaction. while in general words we can say that wallets are described as a place to hold
Download the official Bitcoin.com Wallet for free.
Buy Bitcoin using a credit card or with your linked bank account by an online transaction.
Please notice that additional fees will be charged.
Bitcoin / $ rate at checkout. Those fees are as follows:
– Bitcoin.com 2.5%
– Credit card processing by Simplex 5% ($10 minimum)
3. Utilize Bitcoin –
You can go to Bitcoin site and check pricing in details. there are about 8.8 mln registered Bitcoin users.
Security -: As this full transaction done on the internet so as a result, the user must have complete trust in the wallet provider. A malicious provider or a breach in server security may cause entrusted bitcoins to be stolen. users are responsible for keeping their private keys in a secure place to protect their bitcoins.