A simple video explanation of bitcoin Bitcoin is a digital and global money system (currency).It allows people to send or receive money across the internet, even to someone they don't know or don't trust.Money can be exchanged without being linked to a real identity.The mathematical field of cryptography is the basis for Bitcoin's security.Contents 1 2 3 4 5 One of the differences between using bitcoin and using regular money online is that bitcoin can be used without having to link any sort of real-world identity to it.Unless someone chooses to link their name to a bitcoin address, it is hard to tell who owns the address.Bitcoin does not keep track of users; it keeps track of addresses where the money is.Each address has two important pieces of cryptographic information, or keys: a public one and a private one.The public key, which is what the "bitcoin address" is created from, is similar to an email address; anyone can look it up and send bitcoins to it.

The private address, or private key, is similar to an email password; only with it can the owner send bitcoins from it.Because of this, it is very important that this private key is kept secret.To send bitcoins from an address, you prove to the network that you own the private key that corresponds to the address, without revealing the private key.litecoin network statsThis is done with a branch of mathematics known as public key cryptography.raspberry pi bitcoin setupA public key is what determines the ownership of bitcoins, and is very similar to an ID number.armory bitcoin unlimitedIf someone wanted to send you bitcoins, all you would need to do is supply them your bitcoin address, which is a version of your public key that is easier to read and type.bitcoin core raspberry pi 2

For example, if Bob has 1 bitcoin at the bitcoin address "ABC123," and Alice has no bitcoins at the bitcoin address "DEF456," Bob can send 0.5 bitcoins to "DEF456."As soon as the transaction is processed, Alice and Bob both have 0.5 bitcoins.bitcoin btc meaningAnyone using the system can see how much money "ABC123" has and how much money "DEF456" has, but they cannot tell anything about who owns the address.bitcoin music rapperIn the example above, "ABC123" and "DEF456" are the bitcoin addresses of Bob and Alice.But Bob and Alice both have a second key which only they know.This is the private key, and it is the "other half" of a Bitcoin address.The private key is never shared, and allows the owner of the bitcoins to control them.However, if the private key is not kept secret, then anyone who sees it can also control and take the bitcoins there.

This happened on live TV when Bloomberg's Matt Miller accidentally showed a private key to viewers.[2]The money was taken immediately.The person who took it, told others about it later, saying "I'll send it back once Matt gives me a new address, since someone else can sweep [empty] out the old one."Sites or users using the Bitcoin system are required to use a global database called the blockchain.The blockchain is a record of all transactions that have taken place in the Bitcoin network.It also keeps track of new bitcoins as they are generated.With these two facts, the blockchain is able to keep track of who has how much money at all times.To generate a bitcoin, computers run specialized software.Because of how complicated the math needed to generate a bitcoin is, they must be calculated with very powerful processors.These processors can be found in CPUs, graphics cards, or specialized machines called ASICs.The process of generating the bitcoins is called mining.People who use their computers to mine Bitcoin, are paid with a small percentage of the bitcoins they generate.

A popular image associated with Bitcoin is a QR code.QR codes are the groups of black and white boxes seen at right.QR codes are similar to barcodes.Where barcodes have one dimension of information, QR codes have two (horizontal and vertical).Barcodes are a row of lines, and QR codes are a grid of squares.Bitcoin uses QR codes because they can store a lot of information in a small space, and a camera such as a smartphone can read them.The two QR codes on the Bitcoin note are the public and private addresses, and can be scanned with a number of online tools.Everyone in the Bitcoin network is considered a peer, and all addresses are created equal.All transactions can take place solely from peer-to-peer, but a number of sites exist to make these transactions simpler.These sites are called exchanges.Exchanges provide tools for dealing in Bitcoin.Some allow the purchase of Bitcoin from external accounts, and others allow trading with other cryptography-based currencies like Bitcoin.Most exchanges also provide a basic "wallet" service.

Wallets provide a handy way to keep track of all of a user's public and private addresses.Because addresses are pseudo-anonymous, anyone can have as many addresses as they want.This is useful for dealing with multiple people, but it can get complicated to manage multiple accounts.A wallet holds all of this information in a convenient place, just like a real wallet would.Bitcoin adoption and use continues to grow a lot every year.Since 2012, Bitcoin has gained the attention of the mainstream media, one way is the WannaCry ransomware created in May 2017.[3]Adoption growth has not only happened for consumers, but also for many companies, who are looking to make use of all the advantages of Bitcoin.↑ BTC unit converter ↑ /bloomberg-matt-miller-bitcoin-gift-stolen-2013-12 ↑ /trends/explore#q=bitcoinA common criticism often thrown at Bitcoin is its heavy use of computing power, which in turn requires a large amount of energy.Some critics of the system believe that power is being wasted on useless computations that don’t contribute much at all to society, but this line of thinking misses the point of why Bitcoin works in the first place.

author gave a on consensus algorithms and Bitcoin at University College London ( ) over the summer, where he argued against this common misconception about Bitcoin’s supposed wastefulness.Electricity Underpins Bitcoin’s Security Model The key point that some individuals miss when it comes to the electricity used to mine bitcoin is that the electricity is what provides the security for Bitcoin’s decentralized ledger.Without it, the miners who audit the ledger and create new would be far less trustworthy.The loss of trust would come from the low barrier of entry to bitcoin mining.Antonopoulos was able to explain this point during his talk at UCL: “You will hear people say that Bitcoin wastes electricity.Bitcoin does not waste electricity.Bitcoin uses electricity to underpin the security function because it creates an economic system whereby in order to participate you have to incur cost.And by incurring cost -- the only reason you would incur cost is for the possibility of reward, and the possibility of reward is determined by whether your block meets the consensus rules.” The cost of electricity essentially acts as a on steroids for anyone who wishes to create new blocks on the Bitcoin blockchain.

Many people view Bitcoin as a strictly technical innovation based on code, but the reality is the game-theoretical attributes of the system are what hold everything together.Antonopoulos explained how the cost of hashing power on the network is a vital part of Bitcoin’s incentive structure that keeps everything running smoothly: “You spend money, and if you play fair by the rules, you get money back.If you spend money and you try to cheat, you don’t get money back, which means you lose money, so therefore, it doesn’t pay to cheat.And that simple, game-theoretical equilibrium is the core of the Bitcoin consensus algorithm.” Later in the talk, the author of Mastering Bitcoin added a more direct explanation of how the electricity used to mine bitcoin aligns incentives and is not wasteful: “You align the interest of the miner, who is ‘wasting’ electricity or using electricity, with validating the consensus rules.” Bitcoin’s Hashing Computations are Not Useless