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Intro to Bitcoin and Blockchain

Posted by Arup Das on January 30, 2018
 

Introduced and created in 2009 by an anonymous user with the pseudonym Satoshi Nakamoto, Bitcoin was the first ever decentralized peer-to-peer cryptocurrency. It was created in response to the need for a currency that “is based on proof instead of trust”. Utilizing blockchain technology, bitcoins are able to be safely and securely exchanged without the need for it to go through a trusted third party. “Satoshi Nakamoto solved a problem central to any currency – preventing counterfeiting – and did it without relying on a government’s authority. “ Now more than thousand cryptocurrencies exist now, but Bitcoin is currently the most valuable, and the most popular.

First of all, what are cryptocurrencies?

Cryptocurrencies are essentially just digital money that utilize blockchain technology and cryptography to facilitate safe and secure transactions.

How bitcoin gave rise to blockchain technology

Blockchain technology allows the transactions of data without the need for trust or for a central authority. It is a publicly visible, anonymous online ledger that records every single transaction. The bitcoin blockchain network is maintained by miners, people who use computers to solve complex mathematical puzzles. These miners verify and validate every transaction by using large amounts of computing power, but in return is incentivized by being rewarded with bitcoin. All transactions are confirmed by the miners every 10 minutes. When the block containing the transaction is verified, the block is added onto the blockchain with a timestamp. The ownership of every bitcoin is tracked through a public key and a private key. The private key serves as a security in which is needed to sign transactions, providing proof that someone has ownership of their bitcoin wallet. This system confirms the ownership of every bitcoin, preventing fraud and double-spending.

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