Bitcoin
is a form of digital currency created and kept electronically. Unlike real
currency in our society, bitcoins are not printed, instead, they are generated
by people online and businesses, running computers all around this world, using
software that solves mathematical problems. One major difference from normal
currencies is that bitcoin is decentralized. No one has control over the
bitcoin network, which makes the users comfortable since no large banks can
control their money.
The blockchain is designed so that
each block contains a hash drawing on the blocks that came before it. Bitcoin
stores details of every singe transaction that ever happened in the network in
a huge version of a general money record, called the blockchain that I
mentioned. Anybody can tell how many bitcoins are stored in certain address but
they just would not know that it is yours or somebody else’s. There are
measures that people can take to make their activities within the network more
opaque by using different addresses.
Normal currencies are based on gold
and silver, while bitcoins are based on mathematics. People around this world
are using software programs that follow a mathematical formula to produce
bitcoins. Since the mathematical formula is freely available, anyone can check
them out. Not only that the software is also open source, meaning that anyone
can look at it to make sure that it does what it is supposed to. In conclusion,
bitcoin network is really easy to set up, anonymous, transparent, and fast to
operate.
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