Hello Everyone, Welcome to the 2nd Chapter of Blockchain. In this chapter we are about to learn Bitcoin and how bitcoin is related to block chain.I hope you guys are understanding it and if there is any issue than do let me know in comment section. So lets start the chapter....
Bitcoin!
Bitcoin is a digital asset which is currently available on Internet. Bitcoin is similar to gold,silver or any other asset. But Bitcoin is not physical,unlike euros or dollar it does not have any physical existence or paper bills. Bitcoin is virtual and can be transferred using wallets. Additionally there is no Government control over it. That's why it is called as Decentralized Money.
Facts
Bitcoin is not regulated or control by anyone except Human's Will.
Bitcoin does not require any bank or credit card to make any transaction.
How Bitcoin works?
Let's understand it in simple way!
Lets take a example, whenever we send message or email to someone, we directly communicate or deliver it to the person we targeted ,this type of communication is called "Peer to Peer (P2P)" . A peer to peer communication consist of only three components....
1.Sender
2.Receiver and
3.Communication medium or channel.
However...
When we are sending money we need to take help of third party services called Bank. You just can't simply attach money to email and send it to any person. It is because we have to verify and ensure that money has been transferred like we did in real. In reality ,we just take out our money and put it in the hands of someone but virtually we have to ensure that both party has successfully transferred and received the money hence we have to keep record so that no party can deny the truth! That's why we need a trustworthy medium on internet and that's how Bank and other online money transferring system is born!
Question 4 you!
Ever think why bitcoin blockchain is trustworthy?
Think now! I will answer it soon.
Why can't we send money through trusted email parties?
We cannot send money via E-Mail it is because of a problem called Double Spend .
Lets take a example
When we sent a Image using email than they are two copies of same image is formed....
- First copy of image is on your computer
- Second,We are sending the copy of image and not the original image file.
Due to this multiple copies were formed and if we apply it on money than any one can able to generate 'n' numbers of copy of a single money.
Facts
Double Spend causes the formation of Bank and Middleman to verify the transaction!
Now time to answer that above question
The answer is hidden in decentralize technology called Block Chain. Bitcoin Block Chain is the network of computers which ensures the every transaction. If any of the node denies than transaction is simply cancelled. Every transaction is have to follow the Basic Laws of Block Chain which is created by its USERS.
lets get this in Depth!
In Bitcoin block chain,All the information is captured securely by using math and cryptography to protect it, and the data is stored and verified across the entire network of computers.
In other words, instead of having a centralized database that a third party such as a bank to certify that a transaction took place, Bitcoin uses block chain technology across a wide decentralized network of computers to securely, verify,confirm and record each transaction.
Because the data is stored in a decentralized manner across a widenetwork instead of a centralized database,There is no single point of failure.
This makes the records which are stored on blockchain, more secure and less prone to fraud, tampering,or a general system failure than keeping them in a single centralized location.
Facts
All the cryptography work is done by its users called Miners. Each miner is paid 12.5 Bitcoin on every successful Block creation! We will learn more about miners in upcoming lectures.
That's all in this Chapter
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For previous chapter -Chapter 1 - goto >>https://steemit.com/blockchain/@vishalsingh4997/basics-of-blockchain-chapter-1-beginners-guide-to-learn-blockchain
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