Bitcoin Mining and Security, Part 1
A major concern now is to make sure that our files are secure and that no one can change said file and claim that their address has more Cryptocurrencies (Bitcoin, Ethereum, Litecoin, etc.) than in reality, they own.
This is where “mining” comes into effect as one solution.
We have a network that sends the file to tens of thousands of “rubber stampers” that can sign off on the authenticity of the transaction, therefore, checking that everything is genuine and validating the transfer. Resulting in the sender being able to spend his Bitcoin and ultimately you being able to receive it without concern.
Now, here is where human nature kicks in, we have to compensate people (or miners) for their time and effort in verifying all these transactions (there is also an energy cost to take into account) After all why not share amongst us all, and this leads us to “Bitcoin miners”.
Did you see my comment above, “After all why not share amongst us all”, welcome to the 21st century and the world of cryptocurrencies! After all, we are cutting out the middleman (bankers and ultimately the government) So the “miners” get compensated with Bitcoins through the blockchain to make sure that all the transactions are genuine, therefore no middleman is manipulating the currency in between the transaction, how’s that for an amazing deal?
So now you have a decentralized currency (no government manipulation or interference and this is what is important) being watched over by thousands of miners, who admittedly do receive a small fee but are checking the validity and honesty of all these transactions.
That is money for the 21st century and beyond.
Now, transactions are covered, but where do I store my Bitcoins?
This is where the wallet comes in.
Simply put, you have a unique Bitcoin code, this code can be used to send bitcoins to you, therefore, can be seen by anyone and is visible for you to transact across the Bitcoin environment.
So where do I keep my bitcoins?
The same place where you keep your money (if you use a wallet) only this is a Bitcoin (cryptocurrency) wallet.
All you do is set up a unique address where you will store your bitcoins (cryptocurrency) and you would go to this address to access how many bitcoins you currently hold. This program is accessed online with an email and password.
OK, that is a simple explanation, I need to go into greater detail which I will deal with in the next article.
