Author: Angel

What makes mining so important?

The word ‘mining’ derives from Satoshi Nakamoto’s comparison between program developers and miners. He compared the one who resolves hashes will be rewarded with newly-minted bitcoins and the gold-miners. This simile figure makes Bitcoin monetary system vivid to the nonprofessionals. However it misleads many of them to believe that the purpose of mining is adding newly-minted bitcoins into the network. This is very wrong. To the bitcoin system as a whole, to get new bitcoins through mining is a relatively minor function. The real object lies in the computering process. Through calculation, bitcoin transactions are validated and thus prevent...

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Public key and Private key

Before we look into private key and public key in Bitcoin network, two encryption systems should be distinguished. Symmetric and Asymmetric Encryption The traditional encryption system consists of only one key. It uses the same key for enciphering and deciphering the message to be transmitted. In other words you need to share your password with the parties concerned, for example your safe deposit box is so familiar with your passwords. For asymmetric encryption, the recipient generates two keys together, a public encryption key and a private decryption key. The message is encrypted with the public key, and can only be...

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Will central governments strike down Bitcoin

Since its invention, some have already declared their standpoints and claimed that sooner or later, Bitcoin will be suppressed by the governments as illegal currency, because Bitcoin is destined to post threats to the traditional fiat currencies. The central banks of the world are not going to sit back and do nothing while their monopoly over money creation is being threatened. The governments of the world are not going to allow a digital currency that they have no control over to become “the future of money”.   The problem of whether or not Bitcoin will be canceled one day...

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Bitcoin Vocab

Address Bitcoin address is like a physical address or email address. It is the only thing you need to show to peoples when you are receiving bitcoins. To ensure your account’s safety, preferably each address should be exclusive to only one transaction.   Bitcoin ‘bitcoin’ with a capital B – Bitcoin refers to the concept of bitcoin. E.g. ‘Today I learned something about Bitcoin protocol.’ ‘ bitcoin’ with a small b – refers to the currency unit of bitcoin.  E.g ‘Today I transferred 10 bitcoins to Tom.’ Bitcoin is also abbreviated into BTC or XBT.   Peer-to-peer payment network It is suggested...

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