Some people say bitcoin is a blockchain and some say it is a cryptocurrency. This is a major confusion among the people who don’t understand this technology. Many people still don’t know how does bitcoin work. So, it all started in 2009 when a person or group of programmers who go by the name of Satoshi Nakamoto launched first bitcoin blockchain’s genesis block.
Working of a bitcoin
Bitcoin is nothing but a digital ledger of records that are connected in a chain. The points listed below explains the working of bitcoin in the simplest of terms.
- Bitcoin is a decentralized blockchain. It means that there is no central authority governing bitcoin blockchain.
- People from any part of the world can become a node of this blockchain. A node is something that verifies the next block to be written on bitcoin blockchain.
- If all the nodes agree that the next block to be written is genuine then that block is added to the chain of blocks in the bitcoin blockchain.
- The node which first mines the next block to be written is rewarded with a certain amount of bitcoin.
- The smallest unit of bitcoin that can be used is called as Satoshi.
While by reading the above points anyone can think of becoming a bitcoin node. But its not that simple as it requires expensive equipment and the biggest thing is high electricity bill. So, now you may have got some idea about how does bitcoin work.