itcoin

What are they and how do they work ?

Bitcoin is a cryptocurrency, created in 2008 by a mysterious person known under the pseudonym of Satoshi Nakamoto. The identity of this individual is still unknown and it is thought that in reality behind this name is hiding a group of expert programmers economists.A cryptocurrency is a currency of exchange just like the dollar or the euro that does not exist in the physical form of coins and banknotes, but only in digital form or as an exchange of data between computers Traditional currencies are issued by banks while bitcoins are created thanks to an algorithm that creates and manages their exchanges, without the need for intermediaries such as governments or banks ! this makes it totally decentralized and this is the real innovative strength of this project.

Blockchain 

We can define the blockchain as an encrypted digital archive shared by all its users within which all completed bitcoin transactions are recorded, in this case starting from the first dated, January 3, 2009. The users of the blockchain are identified through the so-called addresses, i.e. strings of numbers and letters very similar to a banking iban with the difference that they do not have the name and surname of the holder who therefore remains anonymous. Bitcoin transactions are therefore visible to everyone but cannot be connected to individuals but only to their virtual wallets.

How do transactions take place ?

Transactions / exchanges take place through a complex control system of the blockchain registers which are updated every time someone sends or receives bitcoins. However, this transaction verification process requires an enormous amount of extremely complex calculations which in turn require enormous computing power and very high energy costs. These calculations are carried out thanks to the help of some users of the blockchain (Miners) who voluntarily through the installation of a special software on their computers, make their computing power available to verify through mathematical operations the correctness of large groups of transactions. called blocks from which the name of the blockchain derives. Since this task has considerable energy costs, the miners are rewarded by the system for each block of transactions that is validated, in fact the algorithm generates new bitcoins with which it rewards the miners who have worked for the network. This is also how the system puts new money on the market.

Mining and Halving

Initially, solving a block of operations generated 50 bitcoins for a miner (in 2009); this figure has been gradually decreasing. The bitcoin algorithm in fact provides that the amount of coin generated halves (Halving) every 210,000 blocks (approximately every 4 years), this means that at some point the reward of a block will have halved so many times that it will not be possible. create new ones. The system that generates this cryptocurrency is in fact programmed not to issue a total of more than 21 million units. Unlike traditional currencies which can be issued in unlimited quantities, bitcoins are immune to phenomena such as inflation. Their exchange rate is set only by the market.

Halving ₿itcoin

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