Yeah... I'm not getting how bitcoin works.
- Thread starter Red Yonko
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Red Yonko
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- Oct 15, 2019
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Link?
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There is a database, it's just that it it's distributed everyone verifies it at the same time.
darksoultrip
Regular Member
- Mar 9, 2020
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There is no database because there is a blockchain. A blockchain is essentially a database but instead of only having it on one server, or backing it up with another for redundancy you distribute among hundreds or thousands of computers. All of them verify that they keep the same records and there are things like voting rights that keep everything in check.
As far as how a string holds value. It's because of the money invested to buy that string. The same way a piece of paper keeps record of your ownership in that value of that currency. If you exchange USD for YEN for example you're given something "a piece of paper" that represents the value. How many pieces of paper you get depends on how much that currency is worth at the time.
Regular dollars are mostly USD based and to be honest most of crypto is also USD based where we all keep record of a certain amount of value that was given in exchange for that record. You can have a piece of paper, or you can have a string.
Licheus
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- May 23, 2018
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Decentraliztion is just the idea that instead of an organisation controlling a cryptocurrency, it is controlled by computer programs and maths.
Normal money has a central bank that decides when to create more and where to distribute it. Cryptocurrencies have algorithms (computer programs based on rules) that decides who gets newly made coins/tokens.
Blockchains are the system of record that most cryptocurrencies use to know who owns what. A small amount don't use blockchains, but 95%+ do.
A blockchain is just a list of blocks of data, each one is created at regular time intervals (Bitcoin is 10 minutes), and then they are linked to the block before them.
Each block contains a lot of different types of data, but the vast majority of the data is a list of new transactions that are added to the blockchain.
When someone want to send Bitcoin from one wallet to another, they use software which creates a transaction. At first that transaction is not a part of the Bitcoin blockchain, but it waits in a pool of pending transfers.
Some people download special software that allows their computer to try to win free Bitcoin. This is called Bitcoin mining.
When someone wins (about once every 10 minutes) two important things happen: first, they get rewarded with free Bitcoin, and also they get to choose the next group of transactions to be added to the blockchain.
They get these transactions from the pool of waiting transactions I mentioned before. Their computer does this automatically, and once it's selected them it creates a new block, and it tells all other miners what the data in the new block is. They then all add the new block to their copy of the blockchain.
Miners currently win 12.5BTC every time they win, or about $93,000. Originally the Bitcoin block reward was 50BTC, but every 4 years there is an event called the halvening. This halves the reward given.. first one the reward went from 50 to 25 in 2012, then 25 to 12.5 in 2016, and in a few months it will go from 12.5 to 6.25.
Bitcoin can't be shut down because copies of the live blockchain are running on thousands of computers around the world. Shut down one computer, the network will keep going. Shut down 100 computers at once, the network will keep going.
Bitcoin is trustworthy (a major reason it has value) because fake Bitcoin's cannot be created by anyone - not even the creator Satoshi Nakamoto themselves.
There's a lot more technical shit I could go into, but it's boring and you don't need to know it unless you want to get into blockchain development.
Normal money has a central bank that decides when to create more and where to distribute it. Cryptocurrencies have algorithms (computer programs based on rules) that decides who gets newly made coins/tokens.
Blockchains are the system of record that most cryptocurrencies use to know who owns what. A small amount don't use blockchains, but 95%+ do.
A blockchain is just a list of blocks of data, each one is created at regular time intervals (Bitcoin is 10 minutes), and then they are linked to the block before them.
Each block contains a lot of different types of data, but the vast majority of the data is a list of new transactions that are added to the blockchain.
When someone want to send Bitcoin from one wallet to another, they use software which creates a transaction. At first that transaction is not a part of the Bitcoin blockchain, but it waits in a pool of pending transfers.
Some people download special software that allows their computer to try to win free Bitcoin. This is called Bitcoin mining.
When someone wins (about once every 10 minutes) two important things happen: first, they get rewarded with free Bitcoin, and also they get to choose the next group of transactions to be added to the blockchain.
They get these transactions from the pool of waiting transactions I mentioned before. Their computer does this automatically, and once it's selected them it creates a new block, and it tells all other miners what the data in the new block is. They then all add the new block to their copy of the blockchain.
Miners currently win 12.5BTC every time they win, or about $93,000. Originally the Bitcoin block reward was 50BTC, but every 4 years there is an event called the halvening. This halves the reward given.. first one the reward went from 50 to 25 in 2012, then 25 to 12.5 in 2016, and in a few months it will go from 12.5 to 6.25.
Bitcoin can't be shut down because copies of the live blockchain are running on thousands of computers around the world. Shut down one computer, the network will keep going. Shut down 100 computers at once, the network will keep going.
Bitcoin is trustworthy (a major reason it has value) because fake Bitcoin's cannot be created by anyone - not even the creator Satoshi Nakamoto themselves.
There's a lot more technical shit I could go into, but it's boring and you don't need to know it unless you want to get into blockchain development.
Red Yonko
Senior Member
- Oct 15, 2019
- 819
- 234
@VSYNC I will not get into blockchain development but I'm really curious to know other things too.
Why shouldn't everyone mine? Is it hard?
Also bitcoin encrypts with SHA256. A 32-length string. The transactions that happen every 10 minutes are different 32-length strings every time. Does this mean that sometime they will run out of new patterns?
Why shouldn't everyone mine? Is it hard?
Also bitcoin encrypts with SHA256. A 32-length string. The transactions that happen every 10 minutes are different 32-length strings every time. Does this mean that sometime they will run out of new patterns?