Bitcoin
Bitcoin is a decentralized digital currency that allows peer-to-peer transactions without banks or governments. Created in 2009 by the anonymous Satoshi Nakamoto, it operates on blockchain technology, a secure, transparent, and immutable ledger. Instead of a central authority, Bitcoin relies on a global network of computers (nodes) to validate transactions. These transactions are grouped into blocks and added to the blockchain through mining, a process that ensures security and prevents fraud.
Miners however, play a crucial role in securing the network by using powerful computers to solve complex mathematical problems, verifying transactions, and preventing double-spending. In return for their efforts, miners are rewarded with newly minted Bitcoins (BTC). Bitcoin transactions occur when users send BTC from one wallet to another, with each transaction being verified by miners and permanently recorded on the blockchain. One of Bitcoin’s most defining features is its limited supply—only 21 million BTC will ever exist. This scarcity contributes to Bitcoin’s value, as demand increases while supply remains fixed.
How Bitcoin Transaction is Done?
When initiating a Bitcoin transaction, the sender must first enter the recipient’s Bitcoin address, which is a unique alphanumeric string that functions like a bank account number. They then specify the amount of Bitcoin (BTC) they wish to send and may also choose a transaction fee. Transaction fees are optional but play a crucial role in determining the transaction speed—higher fees incentivize miners to prioritize processing, leading to faster confirmations. Once all details are entered and confirmed, the transaction is signed using the sender’s private key, ensuring authenticity and preventing fraud.H
After the transaction is initiated, it is broadcasted to the Bitcoin network, where it is received by multiple nodes for validation. The transaction then enters the mempool, a waiting area for unconfirmed transactions. Miners—specialized participants in the network—select transactions from the mempool and compete to solve complex cryptographic puzzles through a process called Proof of Work (PoW). Once a miner successfully solves the puzzle, the transaction is included in a new block and added to the blockchain. This marks the official confirmation of the transaction.
Each subsequent block added to the chain strengthens the security of the transaction, making it increasingly irreversible. Typically, six confirmations are considered sufficient to ensure absolute security. Once confirmed, the transaction is permanent, the sender’s balance decreases, and the recipient’s wallet reflects the new Bitcoin balance.
Over the years, Bitcoin continues to grow as a popular investment and digital payment system, revolutionizing the financial world. From January 2009 to March 2010, Bitcoin had no market value. In May 2010, Laszlo Hanyecz bought two pizzas for 10,000 BTC (Bitcoin Pizza Day), valuing BTC at less than $0.01. By February 2011, Bitcoin hit $1.00, gaining attention. In November 2013, it surged to $350–$1,242, driven by adoption and media coverage, marking its rise as a mainstream digital asset. As of today, the current price of 1 bitcoin is 96,044.30.
