What Is Bitcoin – A Beginners Guide
Bitcoin is an open source decentralized peer-to-peer currency. No central authority issues new money or tracks the transactions. Bitcoin uses public-key cryptography, peer-to-peer networking, and proof-of-work to process and verify payments. Bitcoins are sent (or signed over) from one address to another locally or internationally without an intermediate financial institution.
How Bitcoins are Generated :
New bitcoins are generated by solving a complex mathematics algorithm. Whichever computer / miner around the world solves the problem first receives Bitcoins. Bitcoins are created in chunks of 25 at a time, known as block. The reward for solving a block is automatically adjusted so that roughly every four years of operation of the Bitcoin network, half the amount of bitcoins created in the prior 4 years are created.
For example in early years from January 2009 to November 2012, 50 Bitcoins were awarded in each blocks. Every four years thereafter this amount halves, the coin value of a block is 50 BTC for each of the first 210,000 blocks, 25 BTC for the next 210,000 blocks, then 12.5 BTC, 6.25 BTC and so on. Thus the total number of bitcoins in existence will never exceed 21,000,000. Currently 25 bitcoins are awarded at each successful block.
What is Bitcoin Mining :
As we already told you new bitcoins are generated by solving a complex mathematics algorithm. Whichever computer around the world solves the problem first receive Bitcoins. In order to solve bitcoin algorithm, a huge amount of computational power is required. Process of solving bitcoin algorithm to generate a Bitcoin block is called as mining.
Bitcoin Wallet :
As you know Bitcoin is a digital currency, hence you need to store Bitcoins in digital format on your PC or Online. You can download a local wallet for Windows / Mac / Linux here or you can create online wallet at blockchain.info, bips.me or coinbase.com