Bitcoin, bitmonin - cryptocurrency introduced in 2009 by the person of Satoshi Nakamoto [2]. Peer-to-peer name that forms. Automatically translated by the user for personal use for such software purpose, in order to access the application on the smartphone, or in the so-called the hardware portfolio. In these cases, Bitcoin "went down immediately." Bitcoin is divided into 100,000,000 smaller units, called satoshi
Basic information
Unlike most currencies (so-called fiat or fiat), bitcoin is not based on trust towards the central issuer [3]. Bitcoin uses a decentralized database, distributed between peer-to-peer nodes to store transactions and cryptography to provide basic security functions, such as making sure that bitcoins can be issued only once by the person who owns them at any given time.
Peer-to-peer peer-to-peer network and lack of central administration make manipulation of Bitcoin values by producing more of them unmanageable for any government institution or other organization or unit, still possible is a speculative bubble . The construction of bitcoin allows for anonymous possession of property and its transfers.
Bitcoin is one of the first implementations of the concept called cryptocurrency, first described in 1998 by Wei Daia on the cypherpunki mailing list [6].
Bitcoin is based on the transfer of amounts between public accounts using public key cryptography. All transactions are public and stored in a distributed database. In order to prevent double publishing, the network implements a kind of distributed time server, using the concept of chain-based mathematical proof of performed actions (proof of work, abbreviated PoW). Therefore, the entire transaction history must be stored in the database, and the tree of the hash function is used to limit the size of the store.
Transactions
Bitcoins contain the public key (address) of the current holder. When user A transfers a quantity to user B, A resigns from having them, adding a public key (address) B to these coins and signing them with his own private key [13]. He then announces the transaction he has made in a message sent to the peer-to-peer network. The rest of the network checks the correctness of the digital signatures used in the transaction and the number of coins before it is accepted.
Generating bitcoins
The generation of new bitmonets is probabilistic in nature - any network user who actively verifies transactions after meeting a certain condition, statistically very unlikely, can hit it. Bitcoin generation is often called mining, by analogy to gold mining [2]. The probability that a given user will receive a batch of coins depends on the ratio of computing power brought to the network through it to the sum of the computing power provided by all nodes [16]. The number of Bitcoins created in the lot is never higher than 12.5 BTC (data for July 2016), and the rewards are programmed to decrease in time to zero, so that no more than 21 million coins can ever exist [10]. As the withdrawals decrease, it is expected that the collection of transaction fees will motivate users to start generating nodes.
All nodes generating networks compete to be the first to find a solution to the cryptographic problem for the trial and error candidate block being processed. When the node finds such a solution, it announces it to the rest of the network and declares itself to be the owner of a new bitmonet party. The nodes receiving the newly solved block check its correctness before accepting and adding to the chain. The nodes can use CPU, GPU, FPGA and ASIC [17]. In practice, since 2013, all significant "mines" use specialized ASICs. Users can also generate bitcoins in groups [18], this grouping is called "pool" [19].
Each block is generated on average every 10 minutes, each node separately every 2016 blocks (which in practice takes an average of 2 weeks) recalculates the difficulty of the problem, which tries to solve using a rolling average, targeting the average number of blocks per hour. If the blocks are generated too fast or too slow, which depends on the increasing or decreasing computing power of the entire network, the degree of difficulty increases or decreases accordingly
Transaction fees
Transactions may be free, but - in order to prioritize transactions - a fee may be paid to other nodes [2]. Since nodes are not required to enter into transactions in the blocks they generate, senders of bitcoin transfers can voluntarily pay a transaction fee. This accelerates the transaction and provides incentives for users to run generating software, because the degree of "extraction" difficulty increases, and rewards for the block decrease over time. The nodes collect transaction fees related to all transactions concluded in their candidate block [10]. Transactions that are very small or that use relatively new coins are of low priority and can be charged with transaction fees to reduce spam. In Bitcoin official version 0.3.23, the minimum transaction fee for low-priority transactions is 0.0001 BTC.
