Invention of electronic payment was a great move towards growing the economies all around the world. Paypal, Skrill and 2checkout are among the most renowned companies that have really thrived in online payments using electronic dollars and other currencies. Dollars and other normal currencies are controlled by a central authority, and this means that it can tinker with monetary policy and cause a meltdown. The controlling authority can decide to take people’s electronic dollars away from them.
The invention of pseudo-currency known as Bitcoins has really revolutionized the way online payment is done. Unlike the conventional currency that is based on gold and silver, Bitcoin is based on mathematics. What basically happens is that people use software programs that follow a mathematical formula to produce Bitcoins. This currency is not printed, but it is rather discovered. Computers in the Bitcoin network all over the world mine for coins by competing with each other.
How does mining happen?Mining is the process through which Bitcoins are created. People send each other bitcoins over the Bitcoin network, but no one would be able to tell who had paid what. Someone has to keep a record of transactions made during a set period into a list called block. The miner confirms those transactions and writes them into a general legder or the block chain.
The block is used to explore any transaction made between any Bitcoin addresses, at any point on the network. New blocks that come up are added to the chain, forming an increasingly lengthy list of all the transactions that ever took place on the Bitcoin network. The block chain is held digitally and has to be trusted.
Is the block chain ever intact?It is the work of the miners to ensure that the block chain is never tampered with. They wait for a block of transaction to be created and then they put it through the process. They take the information in the block and turn it into something else using a mathematical formula. They normally create a sequence of letters and numbers known as a hash.The hash is attached at the end of the block chain, Miners normally use the hash to produce the hash of the next block. This becomes a digital version of a wax seal, and it makes it difficult for anyone to tamper with the chain.