my plan was to get further into reward numbers on popular surf for Bitcoin sites though the response in general was a general urge for more information regarding Bitcoin. Though the term is widely used and the media tries it's best to stigmatize the currency, not many people can really say they know what Bitcoin is. I will attempt to rectify this wrong by explaining Bitcoin to you.
Bitcoin, with the acronym BTC, is a digital currency which is encrypted and deployed alongside a POW (proof of work) protocol. This POW system makes it possible to deter spamming or denial of service attacks (DDoS, DoS). This is usually achieved by demanding processing time and power from the requesting party.
The result of these systems is called a Cryptocurrency. The first cryptocurrency, Bitcoin, was first mentioned in 2008 and created in 2009 by the pseudonymous developer Satoshi Nakamoto. Today there are quite a few cryptocurrencies though not all of the ones launched have been successful. The most popular are Bitcoin, Litecoin, Namecoin, and PPCoin. A comprehensive list may be obtained on wikipedia.
The transfer of Bitcoins is managed by an open source protocol and completely decentralized. This means that no authority what-so-ever has any management powers over the currency. The network is made up of the users of Bitcoin and servers which together build a ledger which is updated and archived in frequent periods by peer-2-peer file sharing technology. With every update of this ledger the newly "mined" bitcoins are minted and added into the total flow of the currency. More on mining later.
The number of new bitcoins released with each update is halved every 4 years until 2040 a theoretical amount of 0 Bitcoin left should be reached. From this point on no more new Bitcoin can be generated and the total number of 21 Million Bitcoin is reached.
To use Bitcoin you need a "Wallet" which can be either locally stored on your computer or online with a Bitcoin-Wallet service. Where and how i have explained in this post.
The latest information on Wallets is now kept in the Wallet-guide on Coin-inc as this information is to useful to rot in an old post.
The formerly mentioned "mining" of Bitcoin has nothing to do with the actual occupation of real mining. It rather describes a process where you use a computer to solve a mathematical problem. In the beginning the difficulty levels of the problems where low enough to allow mining with CPU's. Shortly after, miners switched to GPU's with their superior multi-threading technology. Nowadays you are able to buy so called ASIC mining sets (Application-specific integrated circuit).
If you like to know more about Bitoin or related themes like mining please leave me comments or check out my other posts.
See you soon forum!
Tim
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