Friday, September 22, 2023

What is bitcoin, how does it work and why is it important?

Bitcoin is a new type of asset that can only be defined according to its white paper: pure electronic cash transmitted in a peer-to-peer network, without intermediaries. A peer-to-peer network is one in which its nodes are equal to each other and act as clients and servers at the same time. Therefore, bitcoin is both a system and a digital currency. Its popularity and relevance only grow with time, as well as its adoption among users and institutions. It is estimated that it currently has over 100 million users. Its entry into the market was equally spectacular: it was the asset of the decade with cumulative returns of over 20,000,000%.

Bitcoin is a network of computers that follow a protocol to communicate with each other whose unit of measurement is bitcoins, digital tokens that serve as currency. Bitcoin uses various computer science technologies for its operation: cryptography, databases, Internet transmission protocols, open source code, among others.

The innovation is that bitcoin uses these technologies in an innovative way to function in a completely decentralized manner and without hierarchy, eliminating the need for intermediaries or centralized entities for its operations. Bitcoin solves a well-known computer problem of Byzantine generals: how to build consensus in a distributed system so that treacherous actors don’t blow up schemes by falsifying information without relying entirely on trust.

In 2009, an anonymous cryptographer (or cryptographers) using the alias Satoshi Nakamoto introduced the first practical solution to the lack of robust distributed systems that do not need to be backed by trust: the blockchain. Blockchain, chain of blocks in English, is a database system whose purpose is not to trust, but to verify. It is a chain of blocks because it uses a data structure (i.e., information) based on a Merkle tree, where each “block” is a continuous and persistent record of transactions that are verified and validated by the computers that run the network. are part. of bitcoin. The concept of blockchain allowed a new paradigm in the world: digital scarcity.

Previous attempts to generate distributed and decentralized digital currencies had failed due to the double-spending problem. Information technology and communication technologies are aimed at dissemination and replication of information, therefore, in the case of digital currencies, intermediaries have to be trusted to validate user data in order to avoid fraud. With the concept of the blockchain, Satoshi intended to eliminate middlemen through a public transaction record that is democratically verified by all users. In the bitcoin network, no computer weighs more than another and the blockchain progresses only by consensus. Thus, unscrupulous actors cannot duplicate information to double spend as the protocol facilitates its verification through the approval of all users.

Satoshi created a complete and innovative system that works without relying on the goodwill of participants; The currency balance that arises between each transaction is verifiable through simple arithmetic that operates under a logical and computational regulation. Using the irrefutable universal language of mathematics, bitcoin operates through truth, transparency, and fairness. This means that transactions made in bitcoin can be seen and verified by everyone. Blockchain is an open ledger created through computational verification of users, in which anyone can participate if they follow the rules set by its open source. No user has more decision-making power than another, and no one, including its creator, has more control over the rules of the game than others.

Bitcoin open source is free and available to everyone. Although transactions, number of users and rules are transparent, bitcoin is anonymous. The balance (and hence, possession) of units of measurement or currency can be verified through a type of unique identification number known as an address. The address is an alphanumeric number between 26 and 32 characters long that is created through a computational command and used to send and receive bitcoins. The creation of these numbers is unlimited, free of charge and does not require personal data.

By design, there will be a total of 21 million bitcoins, and their issuance in terms of volume decreases every 4 years. On the other hand, its transmission is programmed to be constant over time: an average of 6 blocks are generated per hour. Each new block validates a transaction while generating a new amount of bitcoin. Despite the fact that all computers in the network validate transactions, only those that seek to solve a specific mathematical problem through iterations, in addition to completing this task, are eligible to stamp each block. And manage to take bitcoins as a reward. , In the early days of bitcoin, each block generated 50 bitcoins in reward, an amount that halved every 210,000 blocks, or about 4 years. This process is known as mining.

The first purchase of bitcoins for other currencies or barter in 2010 changed its history. Suddenly, bitcoin went from being an experimental project of a few programmers to an asset with value and demand in the market.

By creating a technical paradigm, bitcoin opened up a whole new market. Thousands of bitcoin imitations are giving rise to a new industry: the cryptocurrency and blockchain industry. Thousands of projects use all or some of bitcoin’s features to create their own currency and payment systems, or for other digital uses. But the biggest and most important blockchain is still bitcoin.

Encrypted as a collection of non-third party transferable binary data, bitcoins travel at the speed of light, with the ability to settle in as little as ten minutes, regardless of payment volume or jurisdictional boundaries.

In short, bitcoin is:

Completely digital money.

A completely peer-to-peer decentralized payment network.

A completely open source protocol.

The source of both this article and the following about bitcoin is:, published by Ricardo Alonso Esparza Gámez.

Recommended Quote of the Week: “There are many things in life that are more important than money! But they cost a lot!” By Groucho Marx. “Capital is not an evil in itself, the evil lies in its misuse” by Mahatma Gandhi. “Blessed is he who has talent and money, for he will make good use of the latter” Menander of Athens “Money is like an arm or a leg: either use it or lose it” by Henry Ford.

Recommended singer of the week: Sergio Dalma. Owner of one of the most individual and recognizable voices on the music scene in recent times, “I have a very distinctive style and way of interpreting, they always talk about me as a singer with a broken voice , but I have more resources and I have to blow. I want people to know them”, explains the singer with a baritone voice born in 1964. He is a Spanish pop, rock and ballad singer who has sold over 4,000,000 copies in his music career spanning over 30 years. , In 1989 he published his first album called “Esa chica es mía”. The album “Todo Lo Que Quieres” is an album that has the strength of their live shows, with a more emphatic, more aggressive sound, where we nod to American music, rock, soul, funk and ballads. It includes two versions in Catalan of the songs “Todo lo que quieres” and “Bandera Blanca”, a version in Galician of “Otren”, a unique interpretation of Francis Caballe’s classic “I want him dead”, one with Zucchero. duet and the Italian version of “I Don’t”. In 2011 Sergio Dalma released “Via Dalma”, an album containing 11 Italian music classics sung in Spanish and 1 sung in Italian. In 2012 the artist presented “Via Dalma 2”. This second part includes new Italian classics, such as “El Mundo”, “Senza una donna” by Zucchero, recorded in Spanish and Catalan, and a spectacular version of “La cosa mas bella” by Eros Ramazzotti, with Lear Martínez. With the duet version, Van Gogh’s ear sounds. I recommend listening to: Belair pegados, That Girl is Mine, I Love You, I Don’t Ask You for the Moon, I Who Don’t Live Without You, and versions sung by her: Tornero, My Story Between Your Fingers, The Most beautiful thing, beautiful without soul and it will be because I love you

Recommended song of the week: Bailar Pegados. Each singer has his own legendary song, which cannot be missed at concerts. Sergio Dalma’s, although it has great themes, is undoubtedly it. A song that hasn’t stopped playing since 1991. A great example of the triumph of the romantic ballad, although it is full of sensuality. No matter how much time passes, this topic leaves no one indifferent and conquers generation after generation. Since its release, the artist has known to reinvent herself by daring with different ways of interpreting the subject matter. Thanks to this song, he fell in love with all of Europe at the Eurovision Song Contest.

Nation World News Desk
Nation World News Desk
Nation World News is the fastest emerging news website covering all the latest news, world’s top stories, science news entertainment sports cricket’s latest discoveries, new technology gadgets, politics news, and more.
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