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Bitcoin turns10: what is and how does the largest cryptocurrency in history work?

Bitcoin turns 10.

Dragged like a pendulum, the largest cryptocurrency in history has risen and fallen steeply in recent years, at a fast pace that is not recommended for those at risk of heart attack. In December 2017, it peaked at US $ 19,783, then it began to drop sharply and is now worth close to US $ 6,300.This is a basic guide to understanding what Bitcoin is and how it works.

What is Bitcoin?

It is a completely virtual type of money. As if it were an online version of traditional coins or bills, it can be used to buy products and services.10 years of Bitcoin: how this cryptocurrency works and what risks it has. The problem is that not many stores accept it and some countries have banned it.Why does South Korea want to ban the use of Bitcoin (and in which 8 other countries it cannot be used)Why Bill Gates Says Cryptocurrencies “Are Dangerous And Killed”The physical Bitcoins seen in photos do not actually exist as a bargaining chip, they are more of a way of representing digital currency.If you had a physical Bitcoin in hand, it would be worthless if it is not backed by private codes printed inside.

How does it work

Each Bitcoin is basically a virtual file that is stored in a “digital wallet” , either on a cell phone or on a computer. This is what a Bitcoin digital wallet looks like.People can send bitcoin (or a part of a Bitcoin) to your digital wallet and you can do the same.Each transaction is recorded in a public list called the blockchain .This allows to investigate the history of a Bitcoin, in order to avoid theft, false copies or undo transactions.

How can a person acquire Bitcoin?

There are three main ways to get Bitcoin:you can buy them using real money

you can sell things and receive Bitcoins in exchange.

you can create (or “mine”, as they say in the jargon of the market) on a computer. You can also learn how to get free Bitcoin here on SmilesBitcoin

How are the new Bitcoins made?

People who get Bitcoins do so on high-powered computers through a process called “mining \”

These computer equipment mines Bitcoin through extremely complex computational calculations.

New Bitcoins are generated on ultra-powerful computers.

When the computer finds the right code, it receives Bitcoin as compensation.

The “digital miners” receive a new math problem every ten minutes, and the one who solves it the fastest gets a Bitcoin.

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Why Iceland became the place with the most cryptocurrency “mines” in the worldThis math problem is based on random calculations for miners to find the solution to the puzzle.

The winner gets the Bitcoin when the rest of the members of the network confirm that the answer is correct.

Bitcoin transactions are publicly registered on the “blockchain” network.

The transaction recognized as valid becomes part of the “great ledger” that the blockchain network represents , where everything is recorded.

As the process is not easy, if you started mining today, it could be years before you get a Bitcoin.

And it may happen that you spend more money on electricity and cooling systems for these powerful computers than the Bitcoin you can get is worth.

Why are they valuable?

There are many things that are valuable in this world, such as gold or diamonds.

In the case of Bitcoins, they are valuable because people are willing to exchange them for real goods and services, and even real money.

Why are there people who prefer to have Bitcoins?

Some people like the fact that virtual currency is not controlled by any government or any bank .

If you lose your digital wallet or delete the code of a Bitcoin, you have no way to get it back.

On the other hand, people can spend their Bitcoins quite anonymously .

Although all transactions are recorded, nobody knows who owns an account number.

Is it safe?

As each transaction is publicly recorded, it is very difficult to copy Bitcoins, make fake or spend those that are not yours.

What can happen is that you lose your digital wallet where you keep your Bitcoins or that you delete them.

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There are also cases of theft of Bitcoins from people who stored them on websites.

And because the value of Bitcoin has seen ups and downs since it was created a decade ago, some critics are of the opinion that it is not safe to convert your real money into Bitcoins because the risk is too high.