Bitcoin wallet download Blocks

Every time you read the news there seems to be something new happening in the world of Bitcoin. Whether it be the collapse of Mt.Gox or Warren Buffett warning investors to “stay away” from the new currency, you just can’t avoid hearing about it. Also, Bitcoins massive surge in value has also helped propel it into mainstream news headlines the world over.

So, what is Bitcoin, anyhow? To help you understand the basics we’ve broken it down into its simplest terms. Somebody once said that you don’t know a subject unless you can explain it to a six-year-old. That will be the objective of this article.
Alright, get ready, you’re about to know more about this mysterious currency than all of your uninformed friends. f those already online. Let’s get to it!

What is Bitcoin nonsense?

Bitcoin is a peer-to-peer online virtual currency, like the electronic currency that’s been used in video games and mobile web apps for years. Bitcoin is also the first decentralized electronic currency, meaning that it is not controlled by a single authority such as The Federal Reserve or Bank of England.

Bitcoin is designed around the idea of using cryptography to control the creation and transfer of money rather than relying on a central authority.

There is also a finite number of Bitcoins that will ever be produced (mined) set at 21 million. Theoretically, since there is a limited number that will ever exist, its value should continue to increase over time. All of Bitcoins transactions are recorded and secured by cryptography.

How does it work?

Bitcoin is based on a large set of data that represents every Bitcoin transaction called a block chain. All purchases are recorded in the block chain, confirming an owner’s possession of Bitcoins. Every user must download a digital Bitcoin wallet where their Bitcoins are stored. Essentially you are downloading the block chain, so every user who has a wallet has a copy of the entire network. u are assigned an address where you are free to receive Bitcoins.

How are Bitcoins created?

There is a formula so sophisticated that when it is solved (using computer processing power), it creates a “block” of data which contains Bitcoins. The genius of Bitcoin is that diminishing returns is built into the system. The rate of block creation is set to remain constant over time: six per hour. Anyone can install the mining software, which uses the computer’s processing power to carry out intensive calculations – Try to think of it like trying to search for prime numbers.