What is Bitcoin?
It is an INVENTION. And money. But it is a money INVENTION related to paper money as the airplane INVENTION is related to the horse.
The key part of this INVENTION is called the TRANSACTION.
The transaction is the BASE of the technology, and it is first generated in the, bitcoin wallet and then transmited and validated by a Node Client.
There are two stages of work: first, the generation of a transaction.
Then sending these transaction to be written on a block.
Once the block is created, contining lots of transactions, a DIFFERENT machine called MINER, tries to find out by trial and error the solution that solves the question that legitimizes the block.
ALL miners work in this step AT THE SAME TIME ON THE SAME BLOCK. Who discovers first, propagates the PASSWORD, all other mining machines validate it and then discard their work on this block and move to discover the solution for the next question on the next block.
This block thus discovered is returned to the CLIENT NODE, which STACKS THIS transaction BLOCK on the BLOCKCHAIN, and begins to write all new transactions in the next block, whose new and same QUESTION is formulated equally by ALL CLIENT NODES equally and independently of each other, and with the Hash tag for the question, tell the miners under its jurisdiction to find the new answer.
Meanwhile...ALL CLIENTS nodes are working stacking transactions on the blocks, thus pumping life on the bitcoin network.
So ... in fact THERE IS NO SUCH A THING as ONE BITCOIN, hard, independent, incarnate, like a one dollar bill or coin or digital byte on the bank.
There are only TRANSACTIONS listed in a list, called BLOCK.
The bitcoin is just a number on this transaction.
The magic of bitcoin creation happens when a miner discovers the password of a question: the client Node that relates to this miner, unlocks the script of the header of the block and the first transaction of the block has registered the numeral (currently of 12.5 bitcoins), that is ANNOTATED in the first transaction of the Block as input of 12.5 bitcoins to the mining address.
VOILÁ ... a new transaction is CREATED contained the new value - and the owner of the miner can spend it because the output on this transaction bears his hash address.
From then on, everything is record of receipt and payment, receipt and payment.
And so the currency circulates
The total number of coins is 21 millions bitcoins; And the division denominator of each bitcoin unit is 1 / 100,000,000
Then the TOTAL of possible transactions is infinite, but the least minimum unit of value that universe of the smallest transaction is 1/ 21,000,000,000,000,000 of a bitcoin, called a satoshi
Even if it takes time, once the propagation has occurred, - and just one next additional node is enough - the system propagates automatically, recovering the lost time until the blocks are confirmed, and "buried" in BLOCKCHAIN
The blocks get buried underneath the stack, and each time a new transaction is made,a Client Node will fetch the source transaction, the money you have, from the buried stack.
That's how it works.
The more buried the blocks in the blockchain, the less possible it is to be modified
Almost impossible to change the block chain after six new blocks have been stacked.
I have two bitcoins, two bitcoins transactions, one bitcoin on each transaction
They must be buried today some 15 thousand blocks in the blockchain.
In some block, 15 thousand blocks below the most recent block.
When I want to use my bitcoin, ANY NODE client, ANYWHERE in the world will get into HIS BLOCKCHAIN that IT built from SCRACTH from the first block in 2009, and VOILá, there it is the record that I have 1 bitcoin.
The registry also indicates that ONLY my private key, or who has my key, can transfer that indicated value, to someone ELSE on a new transaction.
When I transfer my bitcoin, my record on that transaction is locked dead, a new transaction record is created with what I had, minus what I spent and the transaction fee for spending it: the change that remains in my hash.
To wit, two new transactions are writting on a new the block at that time: one indicating that I took my bitcoin and transferred itto whom I paid, and I took the difference from the buried block and transferred it to myself on a new transaction, and two new transactions are noted in the block transactions list .
And then .... these transactions are annotaed on the next block that is sent to the miner to work for finding the PASSWORD of the block, the answer to the new magic question that releases new bitcoins; and that search acts as a stimulus to ALL nodes to process transactions.
No matter who resolves the block password, once the block is resolved, ALL TRANSACTIONS up to that block are registered in the block resolved, because all blocks are aware of all transactions that are occurring at the same in all blocks by peer-to-peer.
The system is configured to have a statistically uncovered block every 10 minutes, REGARDELESS the number of mining computers and the computing power of each miner.
If by chance two or more miners discover the right password almost at the same time, the remaing client nodes will judge which block was discovered first, and stack this block in their blockchain list, discarding the looser block.
And from now on, all new transactions every client node sends then to a new block....
And thus this INVENTION, like Magic, girates like this indefinitely, indenpendently, eternally, immutably
Amazing....
ah....one last thing.
Once the last bitcoin has been pumped out, the number of transactions will be SO HUGE that the sum of the transactions ALONE will be enough to compensate for the miners continue searching for the answer of the problem that validates the block,.