Bitcoin for dummies: a breakdown of the cryptocurrency taking the world by storm
By Amal Saeed: [email protected] January 29, 2018 0
An iPhone displays a bitcoin price graph. Credit: Courtesy of TNS
Chaz Schmidt bought a Valentine’s Day bounty for himself last year –– $26 worth of Bitcoin. Almost a year zometeen, his investment is now worth $Two,700.
Bitcoin, a type of cryptocurrency, has exploded te popularity te the past year, however it has bot around for almost a decade.
Many have heard of Bitcoin but not many know the details behind the mysterious currency.
Bitcoin is a form of digital currency that wasgoed developed by Satoshi Nakamoto ter 2008, however Nakamoto is actually an zogenaamd for an unknown person, or group of people, who designed Bitcoin. Tho’ there are a multiplicity of cryptocurrencies available at the uur, Bitcoin has become the most popular one for investors.
Bitcoin wasgoed created spil a way to bypass government control on currencies and make online transactions lighter. The underlying technology behind Bitcoin is a blockchain, a digital ledger te which public transactions made te cryptocurrencies are recorded ter a global network of computers.
The Cryptocurrency Club on campus trains students the information behind digital currency like Bitcoin. Schmidt, the voorzitter of Ohio State’s Cryptocurrency Club, explained Bitcoin using an analogy.
“ Imagine you are playing poker with a group of strangers,” he said. “No one at the table is able to trust one another so everyone keeps a ledger of the bets that occur. At the end of each round, the group of players compares their ledgers with one another to form a overeenstemming.
“If someone at the table attempts to cheat by switching their version of the ledger, the surplus of players will notice and reach a overeenstemming that excludes the cheater’s false bets. Once a overeenstemming is reached, everyone turns the pagina and starts recording the fresh round on the next pagina.”
Jim Fowler, the club’s adviser and assistant professor te the mathematics department, said he remembers being on the internet te the ’90s and hearing people talk about making the internet specie concept work.
“The real innovation with Bitcoin wasgoed figuring a way to make digital metselspecie work,” he said.
The way people make money off of Bitcoin is through gegevens mining, the process of examining large databases te order to generate fresh information. Users are encouraged to create fresh pages te their ledger by making fresh transactions. To build up more Bitcoins they have to verify pending transactions and solve a math puzzle. Once a miner solves the puzzle, their block of transactions is added to the end of the chain and they’re able to receive fresh Bitcoins.
Nathan Crum, vice voorzitter of the Cryptocurrency Club, said the concept of Bitcoin is revolutionary. Spil more people become familiar with how the currency works, its relevance is likely to grow te years to come.