It all began in 2008, where the domain name bitcoin.com was registered. Later on, a paper was released by an individual or group of people that went by the name Satoshi Nakamoto. This paper was named “Bitcoin: A Peer-to-Peer Electronic Cash System”, and it ended up detailing the methods through which Bitcoin works, including a peer-to-peer network, and its implementation of generating a system for electronic transactions that do not rely on a third party.
By January 2003, the Bitcoin network went online. This was done by Satoshi Nakamoto who generated the genesis block. The genesis block is essentially block number 0, the first one to ever exist.
When it comes to Bitcoin itself, the currency’s name is BTC, and this currency has no physical Bitcoins, but instead uses balances that are kept on a public ledger which anyone can view. This public ledger is known as the blockchain.
Now, in order for this blockchain to work efficiently, all of the transactions need to be verified, and this is one through the usage of computing power, or in other words, organizations or people who fill the role of miners. Bitcoins are not issued by a bank, or by a government, but instead, it is generated by this system, of a collection of computers all of which run bitcoin code and store the blockchain.
Miners solve complex cryptographic puzzles in order to verify the transaction, and for this, they are rewarded with BTC.
The mining process is required due to the fact that it allows Bitcoins to be released into circulation. If they want to mine, a user has to use computing power in order to solve complex cryptographic puzzles and discover a new block. Mining adds and verifies the transaction records of the entire network, and for adding a new block, a miner is rewarded with BTC. This has a twist, however, as the reward is split in half every 210.00 blocks, which means that if in 2009 a miner was rewarded 50 BTC, it halved throughout every 210.000 blocks, and as of 2020, the third halving occurred, so now it’s at 6.25 BTC per block.
Pros: Extremely accessible - The #1 cryptocurrency in terms of popularity in value Extremely liquid - Has high-returns potential - High level of security
Cons: Fully Unregulated - Limited real-world use - Has a high level of volatility - Cannot be restored if private key ends up lost
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