Bitcoin, How it Works, Mining of bitcoin, and some unique features of bitcoin.

Greetings to all and sundry on this platform, I am very excited to write and share with you all another interesting topic today as an entry to the Finance Bro adventure Quest of the Leofinance Zealy Campaign. I would be tackling Bitcoin today as my topic and I hope that you guys would enjoy reading this article. Basically, we would be looking at what Bitcoin is all about, the history behind it, how Bitcoin works, the history behind it, and many more. Stay tuned with me as I explore this topic with you guys. Without much ado, I would like to set the ball rolling. So we would be looking at what Bitcoin is in the first place and probably look at the others after this.

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What is Bitcoin?

If you are asked this question, what would have been your response in the first place? Hmm, yeah as of now I know we all know Bitcoin to be a cryptocurrency and now what else? Okay, so Bitcoin is a cryptocurrency, yes, and it is one of the most famous or popularly recognized coins around the globe. Bitcoin was developed or founded by an individual or a group of individuals who are known to be anonymously called "Satoshi Nakamoto". In 2008, Bitcoin was described in a whitepaper by Satoshi and was later launched in 2009 somewhere in January. Bitcoin cryptocurrency serves as a peer-to-peer currency that allows users to perform transactions directly between separate networks without the involvement of any third-party system.

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Bitcoin cryptocurrency was developed to allow easy transactions to be performed online as we move into the world of digitalization and modernization. Bitcoin is decentralized and that feature makes it possible to perform transactions between peers without the interference of any third party. The population usage of Bitcoin is increasing on a regular basis and that is making it a have a great booming in the market. It is the dominance cryptocurrency in the crypto market and the other coins are termed as "altcoins". The price movement of Bitcoin really has an impact on those altcoins and this is because it has the highest market capitalization and also trading volume which tends to influence the price movement of the altcoins.

Founder(s) of Bitcoin

No one has been able to identify the real founder(s) of Bitcoin since its creation to date and it has remained a mystery. The alias name "Satoshi Nakamoto" has what we know to be the founder of Bitcoin but we don't actually know if it is a group or an individual or a company, or whatsoever we can think of. Satoshi Nakamoto was the one that published Bitcoin's whitepaper which was on the 31st of October 2008.

On January 3rd, 2009 after the launch of Bitcoin's whitepaper, the first block was mined on the Bitcoin network and that has been termed as the genesis block. Genesis block because it was the first ever cryptocurrency to be launched around the globe. Bitcoin when launched was worth zero dollars until people started to mine with high computational computers in order to earn them. A hilarious commercial transaction was performed by one programmer called Laszlo Hanyecz who was first known to trade 10,000 BTC for two (2) pizzas and that has been a history that is yearly remembered and celebrated as well. Oops, can you imagine, what the 10,000 BTC he bought for two pizzas how much it would have been worth today? You can do that calculation as well. ($271 million) worth at the time of writing this article. They termed this event "Pizza Day" which was recently celebrated a few days ago.

Another developer called Gavin Andresen is also known to be one of the founders of the Bitcoin Foundation when the network keys were in his charge when he became the regulator of the Bitcoin network at that time. After Hanyecz bought the two Pizzas for 10,000 BTC, the following month which was July 2010 the trading of BTC started and the price was ranging from $0.0008 to $0.08. As I write this article, a lot of developers have contributed to the success and improving the features of Bitcoin software. Some of these developers include Gavin Andresen, Wladimir J. van der Laa, Jonas Schnelli, Marco Falke, and many more.

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Some Unique Features Of Bitcoin

Bitcoin as explained earlier, has certain features that differentiate it from other cryptocurrencies and I would be looking at some of them here in this article. First and foremost, the fact that Bitcoin was the first cryptocurrency to emerge in the crypto market makes it unique. It was the pioneer of cryptocurrencies and today as we speak, it is the cryptocurrency with the highest market capitalization having over $1 trillion somewhere in 2021.

Also, Bitcoin is decentralized and this feature makes it unique as well. Decentralized as we all know, makes Bitcoin an open-source network where there is no third-party server or body that controls or regulates the administration of the blockchain network. If decisions are to be made, it is done through the users of the blockchain network and they do so through consensus algorithm. This feature helps users to perform transactions between each other or separate networks without the interference of anyone.

Bitcoin is distributed. When we say a blockchain network is distributed then it indicates any time a transaction is performed on the network, it is being recorded onto a public ledger that is brought together and termed as blockchain. This indicates that the Bitcoin network also depends on the recording and storing of copies of data or information onto a public ledger to smoothly run the software protocol on the network. About more than 80,000 nodes are currently being distributed across the globe and this makes it very difficult for the information that is stored to get missing at a go. This is because they can be retrieved from several nodes across the globe.

Bitcoin is Permissionless: this makes Bitcoin an all-to-use network where one does not necessarily have to seek permission from any authority or have to create a Bitcoin account before using the network. The transaction gets approved and validated once the transaction performed meets the guidelines and rules of Bitcoin's protocol.

Transparent and Peer-to-peer feature of Bitcoin: this is what allows Bitcoin to be transferred from one person to another without the involvement of any trusted third person. Bitcoin transactions are transparent and this indicates that any newly added transaction can be seen by all users and can never be hidden. In doing so, it makes the platform more transparent where users cannot do something against the platform or against each other.

Bitcoin Mining

When new Bitcoins are minted we term that as bitcoin mining. This is performed using high computational powers to do that. Those that are involved in this act are called miners and they compete among themselves through a process called the Proof of Work (PoW) algorithm where miners that have successfully completed the task using the computational powers earn the rewards involved in doing so. Rewards are shared with a single winner every 10 minutes. Meaning that every ten minutes, a miner is rewarded for verifying a transaction and proving the use of computational powers as well. Rewards earned from mining Bitcoin are in two folds; the first is the block reward, and the second one is the associated fees with all the transactions in the current block.

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The Purpose of Bitcoin Mining

Yes, one may be perplexed about why and what is the aim behind minting bitcoins, and in this article, I would list a few. First of all, minting bitcoins is a new way of distributing or sharing new coins on the blockchain network. Bitcoin mining also serves as a way of providing or creating a fair market through the prioritization of transactions within a limited time input given. Bitcoin mining as it comes with earning rewards serves as a financial incentive for miners when they complete transactions on the blockchain network. Through the minting of bitcoins, it serves as a way or method in which only validated transactions are being added to the blockchain network.

Bitcoin Hashing Algorithm

It is the Secure Hash Algorithm 2 (SHA2) that Bitcoin uses as an encryption algorithm. Anytime a miner completes the verification of a transaction, he/she is rewarded with Bitcoin for that and they do so by finding a random one that only be generated by performing the hashing algorithm several times. Just like a lottery game, the more you buy the tickets the higher your chance of winning, so it is in bitcoin mining. The more computational power you have, the higher your chance of winning or completing the validation of transactions on the blockchain.

This is where I would bring my article to an end for today, and I would like to thank everyone that read and followed my article this far. Also, I would like to say a very big thank you to the leaders and MODs of the Leofinance community for such wonderful artwork they keep on doing. Kudus to the team.

Leoglossary
Bitcoin.com
coinmarket.cap

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