What is bitcoin. How it all works.

You know how the internet has changed the world? How to change e-mail mail? So changed forever bitcoin money ...

Bitcoin - what is it? 

Bitcoin is a digital currency. Often also called virtual, electronic ... It is also the name for a platform that makes the currency created (mined - but more on that below ...). Created in the year. 2009 programmer Satoshi Nakamoto taking pseudonym. To her creation is used open source P2P ( peer-to-pee r ) network that users confirm the pending transaction. To secure signing of transactions is used by generating random numbers. Amongst other things, it ensures each can only spend those coins (bitcoin), which owns and thus can not be one and the same "money" to spend twice. Because Bitcoin is not "falsify" - just transnational network of computers that are connected to it, validates the uniqueness of each payment transaction.

How it all works.

All communication and activity operates in one huge P2P network that are connected to both users and miners (those who called Bitcoin. "Mined" - bitcoin mining). 

Mining - mining bitcoin

Miners are the ones that make everything works. If someone is sending or someone from accepting Bitcoin has anyone confirm this transaction. Network runs every hour hundreds of thousands of transactions - these are included in the so-called. Block (blockchain.info) using complex calculations to find a number that is less than the current Bitcoin network complexity. 

Bitcoin mining then receives a "reward" for confirmation block just as BTC. Its rewards are also fees of all transactions that took place a block, which confirmed its calculation. Currently, it is 25 BTC beyond the block in the entire world network this happens on average every 10 minutes. 

The Bitcoin mining is used special software. Even relatively recently (first half 2013), it was mainly graphics card, now it's mainly a matter of ASIC chip, enabling them to not only incredibly increases the power required for mining bitcoin calculations, but also proportionally increases the complexity of the network. Individuals have therefore today thanks to financial demands on selecting the appropriate hardware acquisition little chance of effective "lifting" - grouped into clusters, therefore many Minera called. Mining pools. Here, everyone gets a reward by the share performance, which contributed to the extraction unit. 

Users

Are the people who send Bitcoin between them or pay them anything. The end user has a computer, or eg. Mobile phone (or online) wallet where you can create an unlimited number of addresses for outgoing and outgoing payments. In the basic version bitcoinové wallet also keeps a database - the history of all transactions across the network, lightened wallets keep only part of the database. As well as addresses and purses can create more. 

Down payment takes place so that the user to the desired number of coins is added bitcoinovou recipient address (like entering a bank account number), will sign with its private key and sends ... This information will be progressively throughout the network, where her way to the recipient confirms the miners. 

Payment can be sent for free, but it is better to add a small transaction fee - eg. 0.0005 (BTC half milibitcoinu). Your payment to Minera rather be assigned to the block, which mines and get quicker confirmation. Confirm the transaction takes tens of minutes (usually within half an hour is credited - if fully overpopulate transaction, it can take several hours, so it is better to charge the equivalent of pennies add ... 

In addition Bitcoin generated even more virtual currencies, most notably litecoin, namecoin, dogecoin ... and dozens more. Most of them are "clones" Bitcoin, use the freely available source code. They differ in the number of potentially mined coins, speed confirmation, a greater or lesser degree of anonymity, and other properties. Updates - at the end of the year. 2014 "altcoinů" has about 700 ... 

It is believed that some of them will find widespread use, a large part of it is rather a marketing product using the popularity of virtual currency and remain without practical use or just as a tool of speculators. 

Technical ... 

This site is not aimed at the BTC Miner and developers, so I do not argue with that, how much detail and technical expertise that explains it. It focuses on other sites and forums bitcoin and I believe that the bitcoino senescent enthusiasts. Candidates for discussion and information on the latest developments in the mining hardware and software will certainly look here However, if anyone knowledgeable want to contribute to improvement or repair concepts, contributions not refuse.