Every Bitcoin user is connected to others through a network, and the users are known as Blocks. Together, they form a chain of Blocks and every user’s Bitcoin software is equipped with a Ledger that updates every Bitcoin coinbase login activity in real time. Priority of transactions is based on a lucky draw that is the immediate outcome of solving mathematical problems.
So how does someone obtain a Bitcoin?
It is done through a process known as ‘mining’. It’s analogous to mining gold so to speak. A computer with a highly sophisticated hardware is used in mining Bitcoins. The computer must solve a mathematical problem by guesswork and on getting the answer, 12.5 Bitcoins are rewarded to the person who wins or earns them. The cost of electricity that is generated due to the computer’s hardware is very high (a few hundreds to few thousands of Dollars), not to mention the high cost of the hardware itself that users must incur. But, the upside of it is that all you need is a powerful computer and the right software to begin ‘mining’.
What is bitcoin essentially replacing in the real world?
This is the million-dollar question. Bitcoin aims at eradicating paper-based money across the globe and establishing a single monetary system for payments and storage of money. Banks will cease to exist. The troublesome and tiring process of depositing money and falling prey to bank frauds will stop. This system will operate under complete anonymity and only be moderated by the users themselves. This reduces any foul play by any government body or malevolent hackers. As Bitcoin is programmable, it can be used to arrive at the value of any commodity on our planet. This has created an incredibly vast and diverse market for Bitcoin.