For an ordinary user, Bitcoin is an application or program that provides access to a crypto wallet. This wallet allows you to carry out any operations related to the virtual asset. In fact, bitcoin is a public distributed ledger. In other words, it is a blockchain. It contains the history of absolutely all payments ever made. Interestingly, any user has access to all transactions.
This means that another important principle that defines the mechanism of Bitcoin is openness. No one controls access to participate in the coin exchange process, no one restricts access to the entire transaction database. Absolutely anyone can download the entire blockchain, create their own wallet, and start buying Coins. Or mine them.
By mining them. We have already talked a little about cryptocurrency mining, and now let’s see what this process is and what its basic principles are.
Every bitcoin transaction is recorded and verified in a publicly accessible digital record. More than 7000 people use their computers to simultaneously maintain identical records of these transactions. The purpose of such a large number of records is to reduce the risk of data manipulation and falsification of information by a single user or group. In other words, public records provide transparency, security, and ensure that bitcoin transactions are permanent.
Mining is the computer process of recording and verifying information in a digital record known as a blockchain. “Mining” bitcoin requires huge server and graphics card processing power, so people do this work for money. Miners receive transaction fees, which is a small amount of cryptocurrency that users pay when they send Bitcoins.
Miners’ computers check the transaction blocks and confirm them. In theory, anyone can become a miner. But in practice, this function is performed by professionals with powerful server hardware. Besides, miners participate in a speed competition: the first one to verify a block with information will receive a reward.
Where can Bitcoin be used?
The liquidity of cryptocurrencies is insanely high today. Digital assets can be sold on crypto exchanges, converted into fiat currency, withdrawn to a card, a regular account, or digital wallets. In addition, there are projects where you can connect a card to a crypto wallet and pay with Bitcoin for purchases anywhere in the world. Many companies already accept virtual coins as a valid payment.
Bitcoin can be used for large and small purchases, and it is also widely used as an investment tool. Investors who invested in the digital currency in time have made quite a lot of money. The total number of coins is limited, and the bitcoin exchange rate is growing rapidly, so investments look more and more reasonable.