genesis mining bitcoin 101

8/20/2019 Genesis Mining Bitcoin 101

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BitcoinALL YOU NEED TO KNOW


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bit·coin ‘bit,koin/ noun

a type of digital currency in which encryptiontechniques are used to regulate the generation of unitsof currency and verify the transfer of funds, operating

independently of a central bank.


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Bitcoin is a currency that only exists electronically, meaning it is not

printed in paper form like we typically imagine money to be. Instead, they

are produced all over the world by computers that are equipped with

special software designed to solve complex mathematical problems.

These computers are owned by individuals and companies, and togetherthey form a totally decentralized network. The Bitcoin currency is not

held or regulated by any single entity.

What is Bitcoin?


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The original idea and much of Bitcoin’s foundation is attributed to an

elusive software developer named Satoshi Nakamoto. There are many

theories about his identity, or if it is really just one individual, but there is

no certainty on that issue to this day.

Who Invented It?


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Bitcoin is a digital currency that allows purchases to be madeelectronically. But it’s not like using a credit card or PayPal. Bitcoin

allows you to make totally anonymous purchases without transaction

fees or transaction delays. When you swipe your credit card, your bank

can spend as many as two to three days processing that money and can

decide not to approve payments that they don’t want to. One of the mostimportant aspects of the currency is the freedom it provides for people to

use their money without oversight. It is your money, you should be

allowed to spend it where and when you want to.

Why is Bitcoin Unique?


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These are a few of the things that make Bitcoin different than standard

regulated currencies:

1- It's decentralized

2- It's easy to set up3- It's anonymous

4- It's completely transparent

5- Transaction fees are small

6- Bitcoin is rapid7- No take-backs

What are the most important

aspects of Bitcoin?


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Unlike normal currencies, there is no sole agency regulating Bitcoin. That means that

there are no mints that produce units of the currency or financial institutions that

hold it. There are no regulating bodies that make rules about how it can be used,

where it can be spent, and how much of it you are allowed to have.

This is important because governments do occasionally tamper with people’s

finances without their permission. Without warning, governments and international

monetary organizations have the power to reach into your regular bank account and

rob you, like the Central European Bank did in Cyprus just a couple of years ago.

1st Aspect:

It's Decentralized


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The normal banking system is fraught with obstacles, including fees just to keep

your money there. They also want to know everything about you and try to get you to

sign up for their various mutual funds all the time.

Bitcoin is different. You simply go to the app store, find a Bitcoin wallet that you like,

and download it. You are now able to send and receive Bitcoins to anyone else in the

world.

2nd Aspect:

It's Easy to Set Up


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You don’t need to provide your Social Security number, fingerprint, or pay stub to

open your Bitcoin account. And any transactions you make are totally anonymous.For the most part...

3rd Aspect:

It's Anonymous


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Your information is private, but Bitcoin operates on a ledger called the Blockchain,

which is a publicly accessible record of every wallet and every Bitcoin in existence.

So all of your transactions will cross the network, but they will be encrypted and no

one will know that it is you.

You can cover your tracks on the network if you want a really high degree of

anonymity. For example, you can use multiple Bitcoin addresses and avoid sending

large sums of money to any single account.

4th Aspect:

It's Completely Transparent


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Sending conventional money can be expensive, especially internationally. Your

bank can charge huge percentages just so you can access your money overseas.Transaction fees with Bitcoin are exponentially smaller.

5th Aspect:

Transaction Fees are Small


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Money doesn’t take weeks to make its way from one account to another. Typically

you only have to wait a few minutes for money to show up anywhere in the world.

6th Aspect:

Bitcoin is Rapid


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If someone sends you Bitcoin (as payment or because they owed you), they can’t

change their mind and reverse the transaction. Likewise, once you’ve sent Bitcoin,

it is gone unless the recipient agrees to return it.

All of this is the concept of how Bitcoin is supposed to operate, but how does it

really work? Read more to find out how bitcoins are mined, what happens when a

bitcoin transaction occurs, and how the network keeps track of everything.

7th Aspect:

No Take-Backs


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An Intro for New Users

Bitcoin is not just a pastime for individuals who thoroughly understand thetechnology. In fact, it is remarkably easy to use. To get started, just

download a wallet from any number of the options in your app store. This

wallet will come with a unique Bitcoin address that you can share with your

friends or business associates. Whenever someone needs to send you

money they will use this address.

HOW DOES BITCOIN WORK?


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Ledger - Blockchain

The block chain is crucial to Bitcoin. It verifies that money was sent, your

spendable balance, and that Bitcoins are actually owned by the spender.

These are important for verifying the integrity of the network.



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Transactions - Private Keys

Any exchange of Bitcoins between wallets is a transaction that will appear

on the blockchain. Your wallet will come with a private key that only you

know and you will use it to sign transactions. This is to prove that you, theowner of the Bitcoin, authorizes them to be sent to another wallet. Without

those keys, your Bitcoins cannot leave your wallet or be tampered with

during a transaction.

Transactions are processed by miners who validate each one and post it tothe ledger.



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Processing - Mining


Mining is a distributed consensus system confirms waiting transactions by

including them in the block chain. It also establishes a chronological order in

the block chain, prevents bias on the network, and unifies different

computers to agree on the state of the system. Transactions must be packedin a block that is designed following specific cryptographic rules and will be

posted to the network. These rules prevent previous blocks from being

modified because doing so would invalidate all following blocks. Mining also

creates the equivalent of a competitive lottery that prevents any individual

from easily adding new blocks consecutively in the block chain. This way, no

individuals can control what is included in the block chain or replace parts of

the block chain to roll back their own spends.


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If you want to dig further

This is only cursory description of the system. If youwant to get into the details, you can read the original

paper that describes the system's design, read thedeveloper documentation, and explore the Bitcoin wiki.


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BitcoinALL YOU NEED TO KNOW

Thank you.

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genesis mining bitcoin 101

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