Below is everything you need to know about the cryptocurrency Bitcoin.
Bitcoin was invented in 2009 by an anonymous person who called himself Satoshi Nakamoto, according to Cnet. His stated goal was to create a new electronic cash system that was “completely decentralized with no server or central authority.” After creating the concept and technology, Nakamoto turned over the source code and domains to others in the bitcoin community and vanished in 2011.
To put it simply, bitcoin is a digital currency. One of the major draws to bitcoin is that it is decentralized, and no government, bank, or other authority, controls it. It is also transparent, at any point in time, anyone can look at any of the transactions and balances, according to 99bitcoins. Owners are anonymous, and buyers and sellers are connected through encryption keys rather than names, tax IDs, or social security numbers.
The list of all bitcoin transactions is called the “blockchain.” Anyone can participate in keeping track of all of the transactions on their computer, and this process is called “mining”. Using specialized software and extremely powerful hardware, miners convert these blocks into sequences of code. They are trying to be the first miner to come up with a 64-digit hexadecimal number, a “hash”, that is less than or equal to the target hash. Thousands of miners compete simultaneously to find the correct code which will verify that no one has spent the same bitcoin twice, known as “double spending,” according to Investopedia. When the new hash is created, it is placed on the end of the blockchain, and is publicly updated. The miner who guessed the correct code first is rewarded bitcoins as payment.
ENTERTAINMENT EDITOR: CONNOR KMIECIK
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