You’ve probably heard about Bitcoin or cryptocurrencies at least once. But how much do you know about it? In this article, we provide a basic and conceptual explanation of bitcoin and continue to the advanced level of these articles. Bitcoin was created in 2009 by a person named Satoshi Nakamoto, based on cryptographic science.
Before Bitcoin, there was a lot of effort to create a digital currency, but everyone had a major problem that we’ll explain in this section.
One of the biggest issues with digital currency before bitcoin is known as double-spending, which means that when someone transmits a digital currency to someone else, there is no guarantee that it will not give the same currency to another person before. The so-called digital currency has not spent twice. So if we can find a solution to this, we can say that the most fundamental problem of digital currencies is solved. Suppose you can monitor and track all transfers of this digital currency and record all this information in a public ledger. But the next point is that this public ledger should be kept in a safe place where everyone can be trusted and no one will be able to make a change that will lead to sabotage or double-spending. So it is not possible to record this information on a central server because it then creates a centrality in controlling the information and can be done by the owner of the server. So what is the solution?
Suppose instead of recording information on one central server all who working on the digital currency network have a copy of all this information from the begin until now, in which case only if one wants to make a change It can create in its version and in that case its information will be different from the rest of the network. In this case, since all members have control over the transfers and information of the ledger, no one can make any changes. So with these explanations, we were able to solve the double-spending problem.
This was the solution used in Bitcoin and digital currency was created that does not require a third party or organization in the currency transfers, the so-called peer-to-peer network. These capabilities are implemented using a blockchain technology, which we will explain in full in the following articles.
Simply, those who review and record new changes made to the public ledger are called miners, and in return for this activity, they some Bitcoin as a reward and thus new Bitcoin was created. According to the rules of Satoshi has written in his bitcoin whitepaper, bitcoin cannot be more than 21 million units and explanations for how this control is will be explained in the next articles. The smallest unit of bitcoin is Satoshi, in which one Bitcoin is 100 million Satoshi. You can follow our articles for more information.