{"id":200,"date":"2015-07-10T15:51:29","date_gmt":"2015-07-10T15:51:29","guid":{"rendered":"http:\/\/thebitcoinpodcast.com\/?page_id=200"},"modified":"2015-07-10T16:01:51","modified_gmt":"2015-07-10T16:01:51","slug":"resource-info","status":"publish","type":"page","link":"https:\/\/thebitcoinpodcast.com\/resource-info\/","title":{"rendered":"Resources & Info"},"content":{"rendered":"

How does Bitcoin work?<\/h1>\n

In 2008, an individual or group writing under the name of Satoshi Nakamoto published an open source program outlining the Bitcoin protocol. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, Bitcoin is pretty much like cash for the Internet. Bitcoin quickly became popular with people who disagreed with the power governments had to devalue their savings by recklessly printing money and the irresponsible behaviour of the financial sector.<\/p>\n

Satoshi\u2019s whitepaper:<\/strong> Bitcoin: A Peer-to-Peer Electronic Cash System<\/a><\/p>\n

From a user perspective, Bitcoin is nothing more than a mobile app or computer program that provides a personal Bitcoin wallet and allows a user to send and receive bitcoins with them. This is how Bitcoin works for most users.<\/p>\n

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Processing – mining<\/span><\/h2>\n

Behind the scenes, the Bitcoin network is sharing a public ledger called the “block chain”. This ledger contains every transaction ever processed, allowing a user’s computer to verify the validity of each transaction. The authenticity of each transaction is protected by digital signatures corresponding to the sending addresses, allowing all users to have full control over sending bitcoins from their own Bitcoin addresses. In addition, anyone can process transactions using the computing power of specialized hardware and earn a reward in bitcoins for this service. This is often called “mining”.\u00a0Bitcoins are \u201cmined\u201d by everyone participating in the Bitcoin network. The software is open source, and once connected, \u201cminers\u201d attempt to solve a complex math problem proposed by an algorithm. The key here is that the math problem\u2019s difficulty changes. Below is a short animated video which serves as an easy-to-digest\u00a0introduction to Bitcoin Mining.<\/p>\n