What is Bitcoin and How Does it Work?

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What is Bitcoin and How Does It Work - Bitcoin Decoded in Simple Terms

Bitcoin Decoded in Simple Terms

Bitcoin is a digital currency, cryptocurrency, that’s controlled by a decentralized peer to peer network and isn’t directly situation to the whims of centralized banking authorities or countrywide governments. Despite the fact that there are numerous cryptocurrencies in lively use nowadays, Bitcoin by far is the most popular and broadly used – the closest cryptocurrency equal to standard, state-minded currencies.

What is Bitcoin and How it works explained in simple terms in this easy to understand video :

Like traditional currencies, namely U.S. dollars, Bitcoin has price relative to different currencies and physical items. Whole Bitcoin units can be broken up into decimals representing a smaller unit of value. Currently, the smallest Bitcoin unit is the “Satoshi” or “0.00000001 Bitcoin”. The Satoshi can’t be subdivided into smaller units. But, Bitcoin’s supply code is established to permit for future subdivisions beyond this stage, if the currency cost hike to the stage that it’s deemed essential.

Bitcoin is the most flexible cryptocurrency round. It was created in 2009 by an unknown person using the alias Satoshi Nakamoto. Transactions are made with no middlemen – meaning, no banks! Bitcoin can be used to book hotels on Expedia, shop for furniture on Overstock and buy Xbox games. It can be exchanged with different private users as consideration for offerings done or to settle outstanding debts. It can be exchanged for different other currencies, each traditional and virtual, on digital exchanges that function similar to forex exchanges. But much of the hype is about getting rich by trading it. The price of bitcoin skyrocketed into thousands of US dollars in late 2017.

Wondering how much is Bitcoin right now? Currently, in relation to US Dollar, the value of Bitcoin is : 

                                               

How Does it Work?

In simple layman terms, Bitcoin is nothing more than a mobile app or computer program that provides a personal Bitcoin wallet and enables a user to send and receive bitcoins.

Behind the scenes, the Bitcoin network is sharing a massive public ledger called the “Blockchain”. This ledger contains every transaction ever processed which enables a user’s computer to verify the validity of each transaction. The authenticity of each transaction is protected by digital signatures corresponding to the sending addresses, therefore, allowing all users to have full control over sending bitcoins.

Thus, there is no fraud, no chargebacks and no identifying information that could be compromised resulting in identity theft. Satoshi Nakamoto released the whitepaper Bitcoin: A Peer to Peer Electronic Cash System in 2008 that described a “purely peer-to-peer version of electronic cash” known as Bitcoin.

Bitcoin is a cryptocurrency, meaning it’s supported by a source code that uses highly complex algorithms to prevent unauthorized duplication or creation of Bitcoin units. The code’s underlying principles, known as cryptography, are based on advanced mathematical and computer engineering principles. It’s virtually impossible to break Bitcoin’s source code and manipulate the currency’s supply.

Although it was preceded by other virtual currencies, Bitcoin is known as the first modern cryptocurrency. That’s because Bitcoin is the first to blend certain key features shared by most subsequently created cryptocurrencies.

What is Bitcoin and How Does it Work? | Bitcoin Decoded in Simple Terms.

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