What is Bitcoin & How it works?

Introduction

Bitcoin is the most popular & growing cryptocurrency in the market. Its value is very high in the market such that only one bitcoin is enough to make you millionaire. So before starting earning from bitcoins first let us get some knowledge about it.

What is Bitcoin?

First of all in professional words, Bitcoin is the first decentralized digital cryptocurrency. So according to the definition, Bitcoin is a decentralized means no particular organisation/authority like banks or any other authority have control over bitcoin.

bitcoin-poster

 

Bitcoin didn’t exist in the real world likewise other currencies which you know e.g Rupees, Dollars etc. The first and only place of its existence is the Internet. That’s why it is called Digital.

And similarly, it is called Cryptocurrency because it uses cryptography for encrypting the transaction for security reasons.

How Bitcoin Works?

Bitcoin is actually a open source project. The technology behind Torrent & Bitcoin is exactly same. They both use peer-to-peer network.

peer-to-peer-diagram

In peer-to-peer network there is no intermediary between two computers. No banks and authorities are involved in transactions of bitcoin. The transaction of bitcoins take place by paying bitcoin by a user directly to another user without involving any central authorities of your region. To know more about peer-to-peer network follow this link.

 

Conclusion

Bitcoin is a decentralized digital cryptocurrency which does not even exist in the real world. It is a open source project, so anyone can access its source code. It works using the technology same like Torrent which is peer-to-peer network.

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