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If there’s anything I hope to communicate with this post, it’s that design features of Bitcoin that appear odd, ugly, or broken tend to have good justifications beneath the surface. This doesn’t make them unimpeachable: there is certainly a case to be made for the alternatives, and that design space is being actively explored by thousands of projects.paypal bitcoin trezor bitcoin bitcoin trade bitcoin mmgp bitcoin club bitcoin обменник алгоритм bitcoin метрополис ethereum bitcoin начало bitcoin word ethereum упал space bitcoin форк ethereum bloomberg bitcoin bitcoin автоматический бесплатный bitcoin payoneer bitcoin 'Bitcoin 2'

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Bitcoin gains more legitimacy among lawmakers and legacy financial companies. For example, Japan passed a law to accept bitcoin as a legal payment method, and Russia has announced that it will legalize the use of cryptocurrencies such as bitcoin.proof of workBitcoin can also be a store of value, some have said it is a 'swiss bank account in your pocket'.sender hopes it will be too late.

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To assess Bitcoin's value as a currency, we'll compare it against fiat currencies in each of the above categories.

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Where Bitcoins generate from?
While coins are minted, paper money are printed, digital money are mined.

The rules of how Bitcoin mining works are defined by the Bitcoin protocol and implemented in its software. Bitcoin cryptocurrency uses POW (proof-of-work) algorithm to create supply of bitcoins and verify transactions. Also it is claimed to be the one of possible defenses against DoS attack. To prevent it the network demands from miners to prove that some work has been done by them (hence, the name, proof-of-work).

The network gives to miners a mathematical puzzle that is difficult to solve but easy to verify computationally. The miner uses computational power to solve the stated math problem in order to produce the valid block. After the challenge is completed, miner submits his work to other nodes’ for validation. In return the miner who found a block first gets a block reward and transaction fees included to this block.

Note: The difficulty of such mathematical puzzle increases with the growing number of miners. With the increased difficulty it becomes impossible to mine individually, thus, miners have to join mining pools.


About the puzzle that miners need to solve
The Bitcoin cryptocurrency has a cryptographic proof-of-work hash function - SHA 256d. It is a standard mathematical algorithm that converts inputs into outputs. Usually, it is really computationally-easy to get the output by putting the input into the function. E.g. from 1+2+3+4 we get 10. But if we set the challenge vice versa knowing only the output we will have a number of different variants of inputs: 9+1, 8+2, 7+3, 6+4, 5+5, etc. The challenge in a mathematical puzzle is that miner needs to find such input that will satisfy the specific output.

Note: The specific output is a digital value of a block header’s hash - an identifier of a block that has to start with a certain number of zeros.

For solving the puzzle, a miner searches a block nonce. The one who finds it first is a winner. The efficiency of miner depends on its speed in searching the right nonce.



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