What is Bitcoin and how does it work?

Bitcoin is a peer-to-peer electronic cash system, created by Satoshi Nakamoto. You can contact with Satoshi by email – satoshin@gmx.com, or directly on  www.bitcoin.org. A purely peer-to-peer version of electronic cash would allow online payments. To be sent directly from one party to another, without going through a financial institution. Digital signatures provide part of the solution. But the main benefits are lost if a trusted third party is still required to prevent double-spending.

We propose a solution to the double-spending problem using a peer-to-peer network. The network timestamps transactions by hashing them into an ongoing chain of hash-based proof-of-work. Forming a record that cannot be changed without redoing the proof-of-work. The longest chain not only serves as proof of the sequence of events witnessed, but proof that it came from the largest pool of CPU power.

As long as a majority of CPU power is controlled by nodes that are not cooperating to attack the network, they’ll generate the longest chain and outpace attackers. The network itself requires minimal structure. Messages are broadcast on a best effort basis. Nodes can leave and rejoin the network at will, accepting the longest proof-of-work chain as proof of what happened while they were gone

Some people keep the bitcoin they accumulate, seeing it as an investment. The value of bitcoin fluctuates daily, and you can check Coindesk or a similar site to check current values.

Right now, there are about $2 billion of bitcoin  Opens a New Window.in existence (which is about 16.3 million bitcoin in current circulation); when the total value hits the 21 million coin mark, no more will be created. This is estimated to happen in 2040.

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