How bitcoin works
In the beginning, before the term” Bitcoins” was even coined, people were talking about” Bitcoins.” However, there is more than one way to refer to the phenomenon. Technically, we are talking about the protocols and the technology supporting the transfer of bitcoins. To make matters simpler, we will refer to the users of this technological breakthrough as “Bitcoins” throughout this article.
Before I explain how the system of bitcoins works, it is important to know something of how the conventional monetary system works. In our current paper currency system, the US government prints bills and passes them out to citizenry, creating the demand for physical coins. The citizens then pay for these coins in exchange for US dollars. This transaction requires the payment of a transaction fee known as the “Transaction Fee”.
the mining process for bitcoins is not controlled by any central entity
In the case of the bitcoins, this transaction fee is determined by the “Wallet”, which is an address provided to your wallet by the bitcoin network. The bitcoin network assigns unique wallets to user accounts. These addresses come from a pool of addresses pooled together by large entities, such as large banks and online gaming sites. The larger the wallet, the larger the number of addresses it contains and therefore, the larger the number of coins in it. The size of your wallet also determines the maximum amount of money you can transfer to someone else using your bitcoins.
Unlike the conventional currency system. Unlike the conventional currency system, the mining process for bitcoins is completely decentralized. The bitcoin protocol is open to anyone who wants to participate in the mining process. No one controls the processing power or the issuance of new bitcoins. As such, anyone can participate and take part in the mining process at any given time.
You can do it with any conventional money
Unlike the conventional money system, there is no central political authority that decides how many bitcoins will be issued. The decision on how many are issued is made by the users of the network. Each user decides how much they want to start with and what kind of bitcoins they want to use at the moment. If you want to convert one currency to another or spend your bitcoins, this is no problem.
Unlike most money systems, it is easy to get, send and receive money with the help of the bitcoin transactions. It does not matter if you are a one man shop, a business or an ordinary consumer. The only requirement to participate in the bitcoin transactions is to have a working computer and a stable internet connection. Once you have these two things, you can instantly start transacting in the currency of your choice.