Cryptocurrency - What is Bitcoin And Bitcoin Mining?

                          What is Bitcoin?

Bitcoin is a global payment system for cryptocurrency and digital payment system called the first decentralized digital currency, since the system operates without a central repository or a single administrator. It was invented by an unknown programmer or a group of programmers, under the name Satoshi Nakamoto and released as open source software in 2009. The system is peer-to-peer, and transactions take place directly among users, without an intermediary. These transactions are verified by network nodes and recorded in a public register called blockchain. Bitcoins are created as a reward for mining. They can be exchanged for other currencies, products and services. In February 2015, more than 100,000 merchants and sellers accept Bitcoin as payment. Bitcoin can also be maintained as an investment. According to research produced by the University of Cambridge in 2017, there are 2.9 to 5.8 million unique users who use a portfolio of cryptocurrency, most of which are bitcoins. 

What is blockchain?

The blockchain is a public record that records bitcoin transactions. A new solution accomplishes this without any central trusted authority: maintenance of the lock chain is done through a network of communication nodes that execute the bitcoin software. Transactions X of the Pay form send the Y-bitcoins to the Z beneficiary are transmitted to this network using readily available software applications. Network nodes can validate transactions, add them to their copy of the general ledger, and distribute these general ledger additions to other nodes. The block string is a distributed database - to obtain an independent verification of the ownership chain of any bitcoin, each network node stores its own copy of the blocking string. About six times per hour, a new group of accepted transactions is created, a block, added to the string of blocks and published quickly to all nodes. This allows the bitcoin software to determine when a certain amount of bitcoin has been spent, which is necessary to avoid double expenditure in an unattended central environment. Although an ordinary registry records transfers of actual bills or promissory notes that exist outside of it, the block chain is the only place where you can say that bitcoins exist as outlets for unspent transactions .

Transactions

Transactions are defined using a Forth script language. A valid transaction must have one or more entries.  Each entry must be an unused output from a previous transaction. The transaction must bear the digital signature of each owner of the entry. The use of multiple entries refers to the use of multiple currencies in a cash transaction. A transaction can also have multiple exits, allowing you to make multiple payments at the same time. A transaction output can be specified as an arbitrary multiple of satoshi. As in a cash transaction, the sum of inputs (coins used to pay) may exceed the expected amount of payments. In this case, an additional output is used, returning the change to the payer. Any entry of satoshis not recorded in the transaction balances becomes the transaction fee.

Mining

Mining is a record keeping service through the use of computer processing power.  Miners keep the block chain consistent, complete and unalterable by repeatedly checking and collecting new broadcast transactions in a new block group. Each block contains a cryptographic hash of the previous block, using the hash algorithm SHA-256, linking it to the previous block, thus giving the block string its name.

 To be accepted by the rest of the network, a new block must contain a so-called working test. [28] The work test requires that minors find a number called nonce, so that when the block content is chopped with the nuncio, the result is less than the network difficulty target. 8 This test is easy to verify for any network node, but it takes a long time to generate, as well as for a secure cryptographic hash, miners must test different nonce values ​​(normally the sequence of values ​​tested is 0, 1, 2, 3, ... before reaching the goal of the difficulty.

 Each 2016 block (about 14 days to about 10 minutes per block), the difficulty target is adjusted based on recent network performance to maintain the average time between the new blocks at ten minutes. In this way, the system automatically adapts to the total amount of mining energy in the network.

 Between March 1, 2014 and March 1, 2015, the average number of miners who did not have to test before creating a new block increased from 16.4 to 20.5 quintillones.

"All the images are taken from google"