Crypto Currency

An Elementary Explanation Of How Bitcoin Works

To most people, Bitcoin can seem like a financial concept made in a parallel universe. Yes, its a very complex…

To most people, Bitcoin can seem like a financial concept made in a parallel universe. Yes, its a very complex and complicated concept, but it doesn’t mean it’s impossible to learn it. When you think about it, many people started off with no idea about bitcoins and how it worked. But look at them now, they’re probably investing left and right in various cryptocurrencies like pros and possibly profiting very nicely as well! So, in this article, well try to simplify how Bitcoin works using a betting game analogy:

Imagine playing a betting game with your friends, but none of you have any money on hand, so you decide to use a ledger to record the transactions, like your winnings and losses. But you don’t want to put your trust on one friend to record everything, so a lot of you decide to make a ledger simultaneously.

This way, at the end of each game, those who kept ledgers can compare their records to see if it all evens out which means that cheating the system would be virtually impossible unless everybody else is in cahoots with you, which ultimately defeats the purpose of cheating in the first place. The ledger is not hidden or exclusive to the ledger keepers; you can view it anytime you want. To add your transactions to the ledger, all you have to do is broadcast your transactions to the ledger keepers, and you pay as little or as much as you want to make sure they put your name down on that ledger as soon as possible.

Your friends who keep the ledgers up to date get compensation for their hard work with a reward in the form of money. This money comes from an external source say, a vault with a limited amount of money. The money in the vault wasn’t part of the money circulating in the betting pool, but it became so once it was acquired by your ledger-keeper friends. This simple analogy is exactly how Bitcoin operates, albeit on a much more complicated level. Bitcoin runs on a global computer network, and each transaction is compiled into new blocks which are then connected to the last block on the blockchain. And the bitcoin miners are the ledger-keepers who work hard to record transactions and mine those precious bitcoins.

Be the first to write a comment.

Leave a Reply

Your email address will not be published. Required fields are marked *

Crypto Currency

Biometric Data Security Under Scrutiny After Coinbase Suit; Expert Urges Modular Privacy

A class-action lawsuit against Coinbase has raised concerns about biometric data collection and storage practices by technology companies. Nanak Nihal Khalsa argues argues that relying on immutable biometric identifiers poses permanent risks, as they cannot be reset once compromised. Patchwork of State-Level Privacy Regulations A class-action suit recently filed against the cryptocurrency exchange Coinbase has

A class-action lawsuit against Coinbase has raised concerns about biometric data collection and storage practices by technology companies. Nanak Nihal Khalsa argues argues that relying on immutable biometric identifiers poses permanent risks, as they cannot be reset once compromised. Patchwork of State-Level Privacy Regulations A class-action suit recently filed against the cryptocurrency exchange Coinbase has [……
Read More

Continue Reading
Crypto Currency

Trump: US Is Dominating in Crypto and Bitcoin—‘We Will Keep It That Way’

Trump’s emphatic vow that the U.S. is dominating in crypto and bitcoin supercharges the digital asset space, fueling unstoppable momentum toward American-led global blockchain dominance. Trump Promises Total US Crypto Supremacy U.S. President Donald Trump voiced strong confidence in America’s dominance in cryptocurrency on his social media platform Truth Social on May 22…

Trump’s emphatic vow that the U.S. is dominating in crypto and bitcoin supercharges the digital asset space, fueling unstoppable momentum toward American-led global blockchain dominance. Trump Promises Total US Crypto Supremacy U.S. President Donald Trump voiced strong confidence in America’s dominance in cryptocurrency on his social media platform Truth Social on May 22…
Read More

Continue Reading
Crypto Currency

Hyperliquid Sets New Records, Surges to Fifth Place Among Crypto Derivatives Exchanges

Hyperliquid, a swiftly advancing contender in the arena of cryptocurrency derivative trading, has hit an unprecedented landmark, achieving an all-time high (ATH) in both open interest and 24-hour trading volume. This explosive growth means that the platform now finds itself in the unlikely position of occupying the fifth slot in the global crypto derivatives market…

Hyperliquid, a swiftly advancing contender in the arena of cryptocurrency derivative trading, has hit an unprecedented landmark, achieving an all-time high (ATH) in both open interest and 24-hour trading volume. This explosive growth means that the platform now finds itself in the unlikely position of occupying the fifth slot in the global crypto derivatives market…
Read More

Continue Reading
Crypto Currency

UAE announces tax exemption; Expected holiday dates; Dubai real estate cryptocurrency buying tips; visa application centre opened – 10 things you missed this week

UAE tax rules, holiday forecasts, Dubai real estate analysis and more top news stories this week…

UAE tax rules, holiday forecasts, Dubai real estate analysis and more top news stories this week…
Read More

Continue Reading