Welcome to the fascinating technology Bitcoin (BTC), here is the most oldest type of cryptocurrency. You have mostly heard about the digital currency Bitcoin, where you can send or receive payments or perform transactions by using Bitcoin currency, here you can also earn profit through the process called mining. Sound good to be serious right? Well, this is real and it is a decentralized cryptocurrency where every user is invited to come. In today's article, we will delve into the fascinating realm of BTC and explore "Bitcoin for Dummies: How Does BTC Work?" so, to know more about this fascinating technology stay with us and read the article given below.
Bitcoin for Dummies: How Does BTC Work?
Bitcoin is a decentralized cryptocurrency developed by using blockchain technology which means it works in a peer-to-peer network and eliminates the centralized authority to perform various tasks within the network which means unlike traditional currencies it does have to need an intermediary or centralized authority such as government and banks etc. It was created in 2009 by an unknown person name "Satoshi Nakamoto".
When the Bitcoin (BTC) transaction is initiated, it would be verified by the number of nodes called mining nodes and the process called mining. Each mining node participates to solve complex mathematical puzzles in terms to verify the transaction. When the transaction would be verified, it would be added to the block and the detail about that transaction would be updated in the distributed ledger. The distributed ledger is a secure way to store data in a decentralized network, where it can be retained safely, and securely by achieving transparency and immutability. Immutability means once the transaction is added to the blockchain, it would be stored permanently and can never be deleted or even changed.
To use Bitcoin (BTC), you need a crypto wallet to manage BTC, a crypto wallet is a piece of code and you can own it by holding a private key. Crypto wallets are of two types (hot and cold), and both types have their own benefits and risks. Hot wallet runs online on the internet such as Coinbase Wallet, Exodus Wallet, MyEtherWallet, Trust Wallet, and Ledger Live; through hot wallet, you can access cryptocurrency efficiently and easily. On the other hand, a cold wallet store cryptocurrency offline means there is no need for the internet to run it which means it is more secure than a cold wallet. Here the most commonly used cold wallet included Ledger Nano S, Trezor, KeepKey, Ledger Nano X, and CoolWallet S.
One of the key features of BTC is its limited supply, the total supply of BTC is 21 million that would be ever created, and after reaching its limit not even a single Bitcoin would be created. To limit the creation of Bitcoin, the difficulty level increases day by day because of the use of ASCIs the mining process is done efficiently which means extra mining is performed by the miner, which is not good for the bitcoin economy so that's why to limit the block creation, difficulty level increased. To know more about the Bitcoin transaction work visit the source
To summarize, Bitcoin (BTC) is a decentralized digital currency developed by using blockchain and operates on a distributed ledger. A bitcoin transaction is validated and processed by the bitcoin miner called mining and each miner would be rewarded after the successful completion of the mining process. To manage Bitcoin or another cryptocurrency, you will have to need a crypto wallet so that you can easily manage the BTC. Wallets are of two types hot and cold, both types have their advantages and disadvantages.