BITCOIN, the new buzzword in town. Bitcoin is a cryptocurrency launched in the year 2009 by some unknown person with pseudo-name SATOSHI NAKAMOTO. It is probably the world's first decentralised currency that works on top of blockchain technology.
Since then the currency has been used by people over the internet for various online transactions. Earlier the cryptocurrency was believed to be used for illegal activities such as buying and selling of drugs on the darkweb but that's not why we are discussing about it today. Over the last couple of years there has been a tremendous rise in the price of bitcoin which surged from just over a $1000 to a whopping $20,000 in just a year and this has attracted many internet users from all over the world be it a novice or an economic expert to divert their attention to the currently booming world of crypto.
Well, lets just start with a brief history of how this all started...(credits wikipedia)
HISTORY OF BITCOIN
On 18 August 2008, the domain name "bitcoin.org" was registered. In November that year, a link to a paper authored by Satoshi Nakamoto titled Bitcoin: A Peer-to-Peer Electronic Cash System was posted to a cryptography mailing list.Nakamoto implemented the bitcoin software as open source code and released it in January 2009 on SourceForge.The identity of Nakamoto remains unknown.
In January 2009, the bitcoin network came into existence after
Satoshi Nakamoto mined the first ever block on the chain, known as the genesis block. Embedded in the coinbase of this block was the following text:
The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.
The above text is a derisive comment on the failure of fractional reserve banking system and the instability caused by it.
On the same day, Hal Finney, the first person to download the code from the repository made the first transaction and received 10 bitcoins from nakamoto and the rest is known story. It is also estimated that nakamoto has about a million bitcoins!!!!
How can you earn a BITCOIN !!
There are two ways in which any person can earn a bitcoin or a part of it as a single bitcoin is worth $13,000 at the time I am writing this.
So, the first method for getting a bitcoin is to simply buy one on one of the popular exchanges such as
On these exchanges you can get a bitcoin in exchange for your real money. But first you will need to create a bitcoin wallet to receive any bitcoin you buy or mine (using mining read below).
MINING - The second way of earning bitcoin is to mine one. But, what is mining ?
First, we need to understand how bitcoin works. Bitcoin works on top of a decentralised public ledger technology known as blockchain. Blockchain is a chain of blocks in which each block is logically related to the previous block via a hash function. If you want to learn more about Blockchain then visit here or you can check out my explanation here.
But for now you can just think of each block in the blockchain as piece of information regarding the transactions that are taking place like if someone buys a bitcoin or sends some coins to another person then this is regarded as a transaction. As a miner your job is to verify this transaction and this is a very difficult and complex task so it requires a high-end PC for solving the complex mathematical problems involved.
Once a miner solves the problem and outputs the correct hash or a correct solution then he/she is rewarded with a block which is currently equal to 12.5 BTC (that is a huge amount for an individual) but the mining task being a very difficult and computationally intensive task is not a task to be done by a single person so, many miners work together by forming what is known as a mining pool.
The pool has the power of all the participating members and hence is efficient for mining. The reward is distributed among the miner according to the hashing power they have contributed to the pool.
But what if you don't own a high-end GPU then will you not be able to mine a bitcoin for yourself ?
Yes, you still can mine bitcoins by making use of what is known as cloud mining.
Using Cloud mining you can rent a high-end PC on a cloud and run it for mining bitcoins. This will not only help you to earn bitcoin but you can also save the extra bucks that you would have to pay for your electricity. A few popular cloud mining sites are -
You can always check out how much hashing power you need to get some profit out of your mining rig or the cloud resource here.
That's it for today. I hope you now have a basic understanding of bitcoin. A more detailed explanation for each of the topics related to it will be covered on this blog. So stay tuned and tell us what you think of the crypto movement in the comments section below.
Hello, my name is Shubham. I am a B.Tech Computer Science graduate. I hope you have a nice stay here!
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