What is Bitcoin Technology ?
Before discussing any thing let me have opportunity to tell you that the concept of Cryptocurrency came into existence when the fiat currency failed to meet the requirement of citizens.
The cryptocurrency specially Bitcoin the most popular hidden currency gets the strength because of existence of Internet. We may say that Bitcoin is an Internet currency. We call bitcoin as currency because it works like a real currency for the exchange of honour ship of assets in the form of goods, services & contracts in tangible or intangible form.
Blockchain Technology
It is Bitcoin which brought Blockchain to emerge as a most reliable , fraud resistant, efficient, irreversible, cost effective and faster technology for the verification of transactions. Let me tell you how first Bitcoin comes into this world , I mean how it gets generated first time. Satoshi Nakamoto is supposed to be the person in Japan who invented the idea to generate a digital code to be used to exchange the assets from one person to other. Since this code has no physical form it is also called as cryptocurrency. Currency in the sense, it can be used to measure the value of goods or services for the exchange. Initially Satoshi Nakamoto generated 50 Bitcoins from a mathematical calculation with Hashbased algorithm SHA256. This was called as Genesis Mining. Satoshi Nakamoto fixed a total 21 million of Bitcoin which would be mined till year 2140.
People may be confused with the term of Miner in context of Bitcoin. Here Mining means the generation of Bitcoin which is accomplished by completion of some job given to the miners. Now you may think what job is given to the miners. Let me first tell you about Miner and the job it completes. When one sends bitcoin to other person two records are generated having information of Bitcoin with a Private Keys and a Transaction Id. Many such transactions when grouped together is called a Block. Such blocks are then sent to the Miners for verification of transaction. Miners are nothing but a chain of machines along with inbuilt software to authenticates the transactions in the Block as per set protocol and consensus. The process of verification of transaction may trace back to the Genesis Mining. After verification of entire Block the transactions are recorded in an open ledger which can be viewed by any one in the Network. List of such records are also called as Public Ledger, however private information is not accessible to protect the Privacy. One such block is released in every 10 Minutes and the miner which first authenticate the block gets 12.5 Bitcoin as the reward for the authentication of the transactions. The total Bitcoin which may be mined is 1800 in a day. From Year 2008-2012 this reward was of 50 Bitcoins. The reward was halved to 25 in year 2012 for further 4 years and in year 2016 it was again halved to 12.5 Bitcoin till year 2020.
One block comes out every 10 minutes and reach to few nearest Full Nodes from where it is forwarded to 8-10 nearest nodes which further transmit to other nearest 8-10 Nodes and so on. Within few seconds the blocks reaches to all the full nodes for verification. It is now interesting to note that that the data is not stored with any central Server rather it is recorded with thousands of Nodes which protects any possibility of tempering of data in thousand of Nodes.
Each subsequent block strengthens the verification of the previous blocks, making it impossible to double spend bitcoin transactions The sequence of such blocks are linked together with a verifiable code and is called as Blockchain or Public Ledger.
Hope you must be having a basic knowledge of Blockchain Technology working for Bitcoin. However you may reach to me anytime for your any query...
In next Blog I would Explain the various Technical Terms used in Blockchain technology.
Ravi Verma
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Email: sunskie2013@gmail.com
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