What is Bitcoins and How does it works

Bitcoin is a cryptocurrency and worldwide payment system. It is the first decentralized digital currency, as the system works without a central bank or single administrator.The network is peer-to-peer and transactions take place between users directly through the use of cryptography, without an intermediary.These transactions are verified by network nodes and recorded in a public distributed ledger called a blockchain.

The block chain is a shared public ledger on which the entire Bitcoin network relies. All confirmed transactions are included in the block chain. This way, Bitcoin wallets can calculate their spendable balance and new transactions can be verified to be spending bitcoins that are actually owned by the spender. The integrity and the chronological order of the block chain are enforced with cryptography.

Mining is the process of using a computer to perform complex calculations on blocks of data which maintain the Bitcoin network. Miners are rewarded for their efforts with a certain amount of Bitcoins.

PROCESSING

The Bitcoin itself is a very volatile virtual currency and while it has recently made huge gains, it may also plummet in value. Bear this in mind if you plan to hold onto any BTC you mine rather than selling immediately. If you want a rough idea of how much you can make from mining, use one of the many online profitability calculators (for example, the one at 99 Bitcoins).

Mining is a distributed consensus system that is used to confirm waiting transactions by including them in the block chain. It enforces a chronological order in the block chain, protects the neutrality of the network, and allows different computers to agree on the state of the system. To be confirmed, transactions must be packed in a block that fits very strict cryptographic rules that will be verified by the network. These rules prevent previous blocks from being modified because doing so would invalidate all following blocks. Mining also creates the equivalent of a competitive lottery that prevents any individual from easily adding new blocks consecutively in the block chain. This way, no individuals can control what is included in the block chain or replace parts of the block chain to roll back their own spends.

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