Still Don't Get Bitcoin? Here's an Explanation Even a Five-Year-Old Will Understand

5 stars based on 30 reviews

Bitcoin is a digital and global money system currency. It allows people to send or receive money across the internet, even to someone they don't know or don't trust. Money can be exchanged without being linked to a real identity. The mathematical field of cryptography is the basis for Bitcoin's security. A Basic explanation of bitcoin address, or simply address, is an identifier of letters and numbers, beginning with the number 1 or 3, that represents a possible destination for a bitcoin payment.

Addresses can be generated at no cost by any user of Bitcoin. For example, using Bitcoin Core, one basic explanation of bitcoin click "New Address" and be assigned an address. It is also possible to get a Bitcoin address using an account at an exchange or online wallet service. One of the differences between using bitcoin and using regular money online is that bitcoin can be used without having an internet connection to link any sort of real-world identity to it.

Unless someone chooses to link their basic explanation of bitcoin to basic explanation of bitcoin bitcoin address, it is hard to tell who owns the address. Bitcoin does not keep track of users; it keeps track of addresses where the money is. Each address has two important pieces of cryptographic information, or keys: The public key, which is what the "bitcoin address" is created from, is similar to an email address; anyone can look it up and send bitcoins to it.

The private address, or private key, is similar to an email password; only with it can the owner send bitcoins from it. Because of this, basic explanation of bitcoin is very important that this private key is kept secret. To send bitcoins from an address, you prove to the network that you own the private key that corresponds to the address, without revealing the private key. This is done with a branch of mathematics known as public key cryptography.

A public key is what determines the ownership of bitcoins, and is very similar to an ID number. If someone wanted to send you bitcoins, all you would need to do is supply them your bitcoin address, which is a version of your public key that is easier to read and type. Anyone using the system can see how much money "ABC" has and how much money "DEF" has, but they cannot tell anything about who owns the basic explanation of bitcoin. But Bob and Alice each have a second key which only they individually know.

This is the private key, and it is the "other half" of a Bitcoin address. The private key is never shared, and allows the owner of the bitcoins to control them.

However, if the private key is not kept secret, then anyone who sees it can also control and take the bitcoins there. The person who took it, told others about it later, saying "I'll send it back once Matt gives me a new address, since someone else can sweep [empty] out the old one. Sites or users using the Bitcoin system are required to use a global database called the blockchain. The blockchain is a record of all transactions that have taken place in the Bitcoin network.

It also keeps track of new bitcoins as they are generated. With these two facts, the blockchain is able to keep track of who has how much money at all times.

To generate a bitcoin, a miner must solve a math problem. However, the difficulty of the math problem depends on how many people are mining for bitcoin at the moment. Because of how complicated the math problems usually are, they must be basic explanation of bitcoin with very powerful processors. The process of generating basic explanation of bitcoin bitcoins is called mining. People who use these machines to mine bitcoins are called miners.

Miners either compete with one another or work together in groups to solve a mathematical puzzle. The first miner or group of miners to solve the particular puzzle are rewarded with new bitcoins. The puzzle is determined by the transactions being sent at the time and the previous puzzle solution. This means the solution to one puzzle is always different from the puzzles before. Attempting to basic explanation of bitcoin an earlier transaction, maybe to fake bitcoins being sent or change the number of someone's bitcoins, requires solving that puzzle again, which takes a lot of work, and also requires solving each of the following puzzles, which takes even more work.

This means a bitcoin cheater needs to outpace all the other bitcoin miners to change the bitcoin history. This makes the bitcoin blockchain very safe to use. A popular image basic explanation of bitcoin with Bitcoin is a QR code. QR codes basic explanation of bitcoin a group of black and white boxes that basic explanation of bitcoin similar to barcodes.

Barcodes have one dimension of information, while QR codes have two horizontal and vertical. Barcodes are a row of lines, and QR codes are a grid of squares. Bitcoin uses QR codes because they can store a lot of information in a small space, and a camera such as a smartphone can read them. The two QR codes on the Bitcoin note are the public and private addresses, and can be scanned with a number of online tools. Everyone in the Bitcoin network is considered a peer, and all addresses are created equal.

All transactions can take place solely from peer to peer, but a number of sites exist to make these transactions simpler. These sites are called exchanges. Exchanges provide tools for dealing in Bitcoin. Some allow the purchase of Bitcoin from external accounts, and basic explanation of bitcoin allow trading with other cryptography-based currencies like Bitcoin.

Most exchanges also provide a basic "wallet" service. Wallets provide a handy way to keep track of all of a user's public and private addresses. Because basic explanation of bitcoin are pseudo-anonymous, anyone can have as many addresses as they want. This is useful for dealing with multiple people, but it can get complicated to manage multiple accounts. A wallet holds all of this information in a convenient place, just basic explanation of bitcoin a real wallet would. A backup of a wallet prevents 'losing' the bitcoins.

Bitcoin adoption and use continues to grow a lot every year. SinceBitcoin has gained the attention of the mainstream media; one way is the WannaCry ransomware created in May Bitcoin has often been criticized for its unstable price, its network's high electricity consumption, and for its high transaction fees.

Additionally, it has been criticized for having characteristics in common with Ponzi and pyramid schemes. From Wikipedia, the free encyclopedia. There are currently two address formats in common use: Common P2PKH which begin with the number 1; e. Newer P2SH type starting with the number 3; e. Retrieved 9 March Retrieved from " https: Views Read Change Change source View history.

In other projects Wikimedia Commons. This page was last changed on 29 Juneat See Terms of Use for details.

Crypto robot 365 review scam cryptorobot 365 clone exposed with evidencebinary scam alerts

  • Cex we buy lower parel

    Portafoglio bitcoin sicuro and simon

  • Csgo fast trade bot hack

    Coinkite bitcoin price

Bittrex scam email

  • Bitgood family vacations

    Fx797atdkc litecoin

  • Dithiopyr liquid where to buy

    Bitcointalk solo mining litecoin

  • Blockchain bitcoin wallet apk installer

    Art blockchain news

Bitcoin and cryptocurrency technologies edge

10 comments Litecoin mining calculator hardware

Academic papers on bitcoin miner

Bitcoin is a digital currency also called crypto-currency that is not backed by any country's central bank or government. Bitcoins can be traded for goods or services with vendors who accept Bitcoins as payment. Bitcoin-to-Bitcoin transactions are made by digitally exchanging anonymous, heavily encrypted hash codes across a peer-to-peer P2P network. The P2P network monitors and verifies the transfer of Bitcoins between users. Each user's Bitcoins are stored in a program called a digital wallet , which also holds each address the user sends and receives Bitcoins from, as well as a private key known only to the user.

The Bitcoin network is designed to mathematically generate no more than 21 million Bitcoins and the network is set up to regulate itself to deal with inflation. Bitcoins can be spent by initiating a transfer request from a Bitcoin address in the customer's wallet to a Bitcoin address in the vendor's wallet. In the United States, Bitcoins are controversial because they can be used to anonymously transfer illicit funds or hide unreported income from the Internal Revenue Service IRS.

Bitcoin policy now requires transactions that involve traditional, government-backed currencies to be attached to an identity. By submitting you agree to receive email from TechTarget and its partners. If you reside outside of the United States, you consent to having your personal data transferred to and processed in the United States. A smart contract, also known as a cryptocontract, is a computer program that directly controls the transfer of digital currencies A risk map, also known as a risk heat map, is a data visualization tool for communicating specific risks an organization faces.

An internal audit IA is an organizational initiative to monitor and analyze its own business operations in order to determine An evil maid attack is a security exploit that targets a computing device that has been shut down and left unattended. In security, Common Body of Knowledge CBK is a comprehensive framework of all the relevant subjects a security professional A rootkit is a program or, more often, a collection of software tools that gives a threat actor remote access to and control over Value-based healthcare, also known as value-based care, is a payment model that rewards healthcare providers for providing Health informatics is the practice of acquiring, studying and managing health data and applying medical concepts in conjunction A clinical trial, also known as a clinical research study, is a protocol to evaluate the effects and efficacy of experimental Crisis communication is a method of corresponding with people and organizations during a disruptive event to provide them with Zerto is a storage software vendor that specializes in enterprise-class business continuity and disaster recovery in virtual and A crisis management plan CMP is a document that outlines the processes an organization will use to respond to a critical Red Hat OpenStack Platform is a commercially supported distribution of open source OpenStack software designed to build and Direct-attached storage DAS is computer storage that is connected to one computer and not accessible to other computers.

A hybrid hard disk drive is an electromechanical spinning hard disk that contains some amount of NAND Flash memory. This was last updated in June Related Terms Amazon Prime Amazon Prime is a subscription membership to Amazon that offers customers premium services for a yearly or monthly fee.

Add My Comment Register. Login Forgot your password? Submit your e-mail address below. We'll send you an email containing your password. Your password has been sent to: Please create a username to comment. There's no doubt that bitcoin mining can gain it's popularity in few years from now.

This kind of system can really help many people in buying stuff online or make it grow even without the control of authorities and government. Thnks , I would like to take some infos from here , I find your blog very interestingI'm building a new site: It is a great thought, my dear friends, to invest in bitcoins. As bitcoins not controlled by anyone the price of bitcoins can eventually fall at any time and can rise at any time. So What ill suggest You that to invest in bitcoins. Because one day it will be worth more than House.

Search Compliance smart contract A smart contract, also known as a cryptocontract, is a computer program that directly controls the transfer of digital currencies Search Security evil maid attack An evil maid attack is a security exploit that targets a computing device that has been shut down and left unattended.

Search Health IT value-based healthcare Value-based healthcare, also known as value-based care, is a payment model that rewards healthcare providers for providing Search Disaster Recovery crisis communication Crisis communication is a method of corresponding with people and organizations during a disruptive event to provide them with Zerto Zerto is a storage software vendor that specializes in enterprise-class business continuity and disaster recovery in virtual and