What does an ordinary person know about bitcoins? That they cost a ton of money do not exist in physical form and is somehow connected with video cards. But it is worth digging deeper and trying to figure out the details – and there is so much information that it does not fit in the brain. But not at this time. We promise not to ship, but it is clear to explain all the most important things you need to know about this cryptocurrency.

Bitcoin (BTC for short) is a cryptocurrency. On the one hand, bitcoins are similar to familiar money: they can be exchanged for dollars, euros, rubles, etc. They can pay for a purchase on the Internet or transfer to friends who lack half a bitcoin to pay. They can be stolen. On the other hand, bitcoin has very little in common with the same ruble. He has no physical form – you cannot rustle and ring with bitcoins. And even throwing on plastic is problematic (although attempts are being made – see. What can I buy for bitcoins? ). Bitcoin does not have an issuer – a legal entity that issues it. For example, the ruble issuer is the Central Bank. Roughly speaking, he decides how much money to print, and stores the data about it in his system. Bitcoin has no such solvers. As there is no one place where cryptocurrency data is located. This information is stored on hundreds of computers simultaneously – as torrent files. It turns out that there are no bitcoins, there is only information about their transfer. And bitcoins cannot be faked. So far, at least, no one has succeeded. To fake a wallet for their reception – yes, to steal, using a breach in the protection of the company – yes too. But to create exactly the same monetary unit – nope. And this is the main chip of bitcoin.

What is the difference between the money on my card, which is also quite abstract, and bitcoins?

The main feature and the difference between bitcoin and ordinary currencies are how money is transferred from one person to another. To begin, consider the classic scheme. You have a bank card that is tied to a bank account. The bank records information about the money in the account: how much money was received or debited, where, where and how much. For this, he annually (or even monthly) deducts money from you. Plus, you pay him when transferring money to another account. Shops in which you pay by card also unfasten the bank commission. If the bank decides that the activity on your account is somehow suspicious – it has every right to freeze it. And not only you can withdraw money from your account, but also, for example, a bailiff. As a result, we have a bunch of commissions and the risk that someone will arrest part of your money or freeze the whole account. But Bitcoin will not allow such garbage, because it is not based on a bank, but on a blockchain. And then we came to the very pulp, the very heart of cryptocurrencies. So blockchain. It’s not difficult to figure out what it is. The main thing is to watch your hands. All transactions need to be recorded: who, to whom and how much cryptocurrency transferred.

It is not safe to store information in this form – you need to somehow sign it and assure it so that even the famous Russian hackers cannot forge it. For this, a hash is used in the blockchain. A hash is the result of the process of converting any information (text, sounds, images, etc.) into a set of letters and numbers of a certain length. The same information hashes completely match. But if you change the case of one letter or add extra space, you will get a completely different hash. There are different hashing algorithms, but in the case of bitcoins, one specific one is used – SHA-256. You can play with him here and see what rubbish it turns out. For example, the hash “ Satoshi passed 10 bitcoins to Bill”Looks like this: 011afce5d62f93e44a9e2d8e86bfcdd9a07e8e7f5089e3386258d68f21df83b4. Just hashing does not protect information. Because if any Bill wants to replace the records above 10 bitcoins with 100, then it will be enough for him to generate a new hash and replace it with the old one – no one will detect the substitution (except for Satoshi). Therefore, in the blockchain, the hash of the previous one is added to the records of the fresh transaction.

That is, in each new transaction message in the form of hashes, information about all previous bitcoin transfers is buried. It’s like an archive in an archive in an archive in an archive … Like a snowball. As a chain – hence the name blockchain (translated as “chain of blocks”). And now, to replace one entry, hackers need to shovel all subsequent ones. Otherwise, the substitution will be easy to track.

But this is real if the information is stored on one server. Therefore, information about bitcoins is not stored in one place. It is randomly distributed between hundreds of miner computers – people who provide resources for processing information about bitcoins. And, which is very nice of them, they almost never take a commission for this. For the first time, Satoshi’s transaction information was kept by a Japanese grandfather. In the second, already in the form of a hash – by the Canadian programmer. In the third – in the form of a hash from a Polish hacker. Moreover, all transactions can be observed in the public domain. Over time, transaction information settles deeper and deeper on the blockchain, and it becomes impossible to fake it. After six re-stores, the information is considered reliably protected from changes. As a result, users of the blockchain do not pay a commission and store information about transactions on hundreds of other people’s computers – and no bailiffs can freeze or arrest them.

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