What is Bitcoin? | Understanding Bitcoin More Easily

What is Bitcoin? | Understanding Bitcoin More Easily

For all the readers who have stumbled upon this post, a spoiler alert, this post going to be a small one.

So, What is Bitcoin? Well, I am going to try to make it as simple as possible for you guys. Let’s consider there are two guys, Hulk & Batman. And Batman wants to transfer 1,000$ to Hulk. So, Batman goes to his bank in Gotham and transfers 1,000$ to Hulk’s bank account in Ohio.

What is Bitcoin? | Trynal
What is Bitcoin? | Trynal

As it is a bank, the cashier will make a note of the transaction, either in a cash register or an online data sheet. He will give it a transaction number, and also note down the name of the two parties involved. Understand the fact that whenever you transfer money, the bank is the third party which gets involved to note down the credentials of the transaction. This basically is referred as centralized platform.



What is a Bitcoin?

Let’s go by the above example. So, what if there was no bank required to make a transaction? So, when Batman transfers money to Hulk through Bitcoins, all the information related to the transaction is handled by a blockchain.

A blockchain is a digital ledger in which transactions made in bitcoin or another cryptocurrency are recorded chronologically and publicly.

It is a continuously growing list of records, which has the time stamps and transaction data. Now, to maintain the blockchain, or the list of records, you need a network. A network of people who ensure the transactions are securely taking place and there is no disparity.

And these people are our miners, who use their processing power to maintain security of blockchains. Miners also ensure that the blockchain keep working properly. Basically, they are rewarded well when they help maintain the blockchain system.

So, overall, Bitcoin as a digital currency eliminates the need of a third party like a bank server, and makes it decentralized platform. Nobody controls the movement of money this way. Not even Hulk or Batman!

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More on Blockchain technology on the way!

 

 

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