Lets grab some knowledge about the basics of bitcoin! – Star of Mysore

Bitcoin is often used as a monetary system, not an actual currency. Undeniably people have heard about bitcoin, but not many know about the basics of bitcoin. Behind every digital currency, such as BTC, a complete proof ecosystem of technical aspects exists. If you want to get better at bitcoin trading, you can visit; here, you can get beneficial tips to become a proficient independent trader. First, lets discuss the basics of bitcoin.

Bitcoin Blockchain!

Bitcoin uses cryptography for its security. In the cryptocurrency world, it is the unique signature that identifies each user, which is called a public key and a private key to access the funds. A transaction between two users, signed with their private keys, becomes a block and has to be added to the ledger called a blockchain.

The blockchain can be considered a record or ledger of all transactions within a digital currency system since its inception. In other words, it can be considered a public database which keeps a record of all trading activities ever performed by any user at any time.

What is Bitcoin Mining?

Usually, in a public ledger system (blockchain), if each user can make changes, its prone to manipulation. To avoid this, bitcoin adjusts the difficulty of the cryptographic puzzle so that one block is generated every 10 minutes.

Mining is a process by which transaction data is verified and added to the blockchain ledger. As a reward for new bitcoins, miners acquire exchange charges and freshly formed bitcoins. This activity is also known as mining because its a costly procedure for Bitcoin miners in terms of computing power and electricity required for solving mathematical puzzles.

Bitcoin Wallet!

A bitcoin wallet is like your bank account for bitcoin. You can send/receive bitcoin and make payments to merchants with it! A wallet is a store of value (such as cash) and a means of payment (such as debit cards, credit cards, PayPal) in which bitcoins are stored.

There are many different types of wallets available

Hardware Wallet: This type of wallet stores the private keys locally on a physical device like a USB or an external hard drive. It can be kept offline and used for cold storage if you lose your computer.

Mobile Wallet: This type of wallet allows user to access their bitcoins from any smartphone mobile app or web application on smartphones. There are numerous other types of wallets.

Cryptography!

Data secured using cryptography can have decoded only with the private key. It is also known as encryption. Data needs to be encrypted with pairing keys before transmission between computers. This type of data security is called asymmetric encryption.

Private Key: A secret number used to encrypt information which can decrypt or unlock something. Public Key: A cryptographic key or random number used by a person to encrypt something and make it public. Anyone can use a cryptographic public key to encrypt something. Still, it can only have decryption with a corresponding private key that only the owner of the corresponding private key possesses.

Bitcoin Halving!

Bitcoin has an important date in its history called Halving. When the reward for mining new bitcoins halves, mining becomes more and more complex and to compensate for this mining difficulty, the bitcoin price increases.

When does the halving happen?

The first of two Bitcoin halves occurs roughly every four years. The second last one happened on Jul 9th, 2016, after which the reward will be 12.5 bitcoins per block (currently 10). As of now, the third halving occurred on Aug 5th 2017. Finally, the most recent having occurred in March 2020.

Private Keys!

A private key is a secret code that one can use to encrypt and perform decryption of cryptocurrency exchange. A digital signature is a private key that enables its associated digital signature algorithm to verify the integrity of a message or file.

The private key may be public only to the person who created it, or it may be known by anyone who knows how to find it. It may be kept on paper, written down on an electronic device, or stored in a computers memory or as an electronic file.

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Lets grab some knowledge about the basics of bitcoin! - Star of Mysore