Bitcoin is a digital asset and a payment system invented by Satoshi Nakamoto. Transactions are verified by network nodes through cryptography and recorded in a public dispersed ledger called a blockchain. Bitcoin is unique in that there are a finite number of them: 21 million.
Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services. As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment.
How Does Bitcoin Work?
Bitcoin is a peer-to-peer payment system and digital currency introduced as open source software in 2009 by pseudonymous developer Satoshi Nakamoto. Bitcoin uses cryptography to control the creation and transfer of money, rather than relying on central authorities.
The Bitcoin network shares a public ledger called the "blockchain" and each transaction must be verified by the network. Bitcoin is unique in that there are a finite number of them: 21 million.
Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services. As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment.
What is Blockchain?
The blockchain is a public ledger that records bitcoin transactions. It is implemented as a chain of blocks, each block containing a hash of the previous block up to the genesis block of the chain. A network of communicating nodes running bitcoin software maintains the blockchain.
What is Ethereum?
Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of fraud or third party interference. Ethereum is the first Turing-complete blockchain and has the ability to run scripts of arbitrary length.
What is a Cryptocurrency?
A cryptocurrency is a digital or virtual currency that uses cryptography to secure its transactions and to control the creation of new units. Cryptocurrencies are decentralized, meaning they are not subject to government or financial institution control.
What is Bitcoin Mining?
Bitcoin mining is the process of verifying and adding transaction records to the public ledger of bitcoin transactions known as the blockchain. Mining is done by running extremely powerful computers that solve complex mathematical problems.
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