Bitcoin is an electronic money made in 2009 by Satoshi Nakamoto. The name is also associated with the open source software that he designed, and also uses a peer-to-peer network without centralized storage or a single administrator where the US Treasury calls the bitcoins of a decentralized currency. Unlike most common currencies, bitcoin does not depend on trusting major publishers. Bitcoin uses a database that is distributed and spreads to the nodes of a P2P network to a transaction journal, and uses cryptography to provide basic security functions, such as ensuring that bitcoins can only be spent by people owning them, and never be done more from one time.

The design of Bitcoin allows for anonymous ownership and transfer of wealth. Bitcoin - bitcoin can be stored on a personal computer in a wallet file format or stored by a third party wallet service, and apart from all that bitcoin can be sent over the internet to anyone with a Bitcoin address. The peer-to-peer bitcoin topology and the lack of a single administration make it impossible for any governmental authority to manipulate the value of bitcoin - bitcoin or cause inflation by producing more bitcoin.

Bitcoin is one of the first implementations of the so-called cryptocurrency, first described by Wei Dai in 1998 in the cypherpunks mailing list.

Bitcoin relies on the amount of transfer between public accounts using public key cryptography. All transactions are open to the public and stored in a distributed database. To prevent multiple expenses, the network implements a distributed time server, using the idea of ​​casualty proofing of work. The entire history of the transactions has been properly stored in the database and to reduce the size of the storage area, a Merkle tree is used.

Bitcoin is a peer-to-peer implementation of the b-money proposal by Wei Dai and Bitgold's proposal by Nick Szabo. The principle of the system in general has been described in 2008 by Satoshi Nakamoto.

Delivery

Someone who participates in a bitcoin network has a wallet that stores some keypair - keypair critiques. Public key - public key, or address - bitcoin address, which acts as the endpoint send or receive for all payments. The associated private key only allows payments only from the user itself. Addresses do not contain any information about the owner and are generally unknown.Addresses in human readable formats consist of random numbers and letters that are approximately 33 characters in semi-numerical format. Bitcoin users can have multiple addresses, and the fact can generate new addresses without any limitations, as creating a new address is immediate, comparable to creating a new / private key pair, and requiring no connection to any nodes in the network. In creating single-purpose / single-use addresses - addresses can help the anonymity of the user. [Need a reference]

Transaction

Bitcoin - bitcoin contains the current owner's public key (address). When user A sends a value to user B, A will release their ownership value by adding the public key (address) B to the coins and sign it with its own private key. Then he will broadcast these bitcoins in a corresponding message, called a transaction, in a peer-to-peer network. The rest of the network nodes validate the criterion's signature and the number of transactions prior to receiving it.

Any transactions that are broadcast to other nodes do not directly become official until they are recognized in a time-stamped list of all known transactions, which are called block chains. This recognition is derived from a road-believed system to prevent multiple expenses and forgery.

At certain moments, each generating node collects all unrecognized transactions which are known from within a candidate block, a file which amongst others contains a cryptographic hash of the previously accepted block and is also known by the node the. Then the node tries to generate a cryptographic hash of the block with certain characteristics, a business that requires a predictable value from repetition of experiments and errors. When a node finds a solution, it will announce it to all networks. Network members will receive new blocks that have been solved and validate them before accepting, and then add them to the chain.

Finally, the chain-blocks contain a history of cryptographic ownership of all the coins originating from the manufacturer's address to the current address owner. Therefore, if a user attempts to reuse the coins he has spent, the network will refuse the transaction.

Bitcoin Production

The Bitcoin network randomly generates and distributes a set of new bitcoins about 6 times in an hour to someone running the software with the option of 'earning coins' that have been previously selected. Each user has the potential to accept a set by running that option, or a program that has been specialized to run on a device that the user has (for example a graphics card - VGA). Producing bitcoin - bitcoin is often termed "mine", a term similar to the gold mining analogy. Regarding the probability probability that a user will receive a set depends heavily on the computing power he or she contributes to the network that is also related to the computational power of all the nodes.The amount of bitcoin made in each set is not more than 50 BTC, and the tilt time has also been programmed to decrease to zero, thus there will be no more than 21 million bitcoins to be present.As payment decreases, the user's motive is expected to change to get Transaction fees.

All network generating nodes are competing to be first in searching for a solution to a cryptographic problem concerning its candidate-block, a problem that requires repetition of experiments and errors. When a node finds a correct solution, it will announce it to the rest of the network and claim a set of bitcoins - bitcoins. Members of the network will receive the broken blocks and validate them before receiving them fully, and add them to the chain. Nodes can employ their Central Processing Unit using standard clients or using other software that leverages the power of their Graphics processing unit.Users can also generate bitcoin collectively.

Since every single block will be generated every 10 minutes, each node separately resets the difficulty of the problem that it tries to solve every two weeks for every change of the overall power of the central processing unit (CPU) of the peer-to-peer network. [ need referral]

Transaction Fees

Since nodes have no bonds to include transactions in every block they generate, Bitcoin submitters may also voluntarily pay transaction fees. With melakuka.

Reference

^ Barber, Simon; Boyen, Xavier; Shi, Elaine and Uzun, Esrin (2012). "Bitter to Better - how to make Bitcoin a better currency" (PDF). Financial Cryptography and Data Security. Lecture Notes in Computer Science (Springer) 7397: 399. ISBN 978-3-642-32945-6. doi: 10.1007 / 978-3-642-32946-3_29.