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Bitcoin Network Write for Us

The Bitcoin network is a peer-to-peer expense network that functions on a cryptographic protocol. Users send and receive units of currency, bitcoins, by sending digitally signed messages to the network using bitcoin cryptocurrency wallet software. Transactions are recorded in a publicly distributed and replicated database called a blockchain, consensus is achieved through a proof-of-work system called mining. Bitcoin’s designer, Satoshi Nakamoto, said that the design and coding of Bitcoin began in 2007. The project was launched in 2009 as an open source software.

The network requires minimal setup to share transactions. A decentralized ad hoc network of volunteers is sufficient. Messages are sent on a best-effort basis, and nodes can join and leave the network at will. Once reconnected, a node downloads and verifies new blocks from other nodes to complete a local copy of the blockchain.

Transactions

Bitcoin is defined by a series of digitally signed transactions that began with Bitcoin’s creation, such as Block Reward. Just like endorsing a traditional bank check, the owner of a bitcoin transfers it to the next owner by digitally signing it using a bitcoin transaction. The payee can examine each preceding transaction to verify the chain of ownership. Unlike traditional check authorizations, Bitcoin transactions are irreversible, eliminating the risk of chargeback fraud.

Although it is likely to handle bitcoins individually, it is difficult to require a separate transaction for each bitcoin in a transaction. Transactions can therefore have multiple inputs and outputs, allowing bitcoins to be split and merged. Common transactions consist of an entry or multiple entries connecting smaller amounts from a larger previous transaction and one or two exits: one for payment and one for transfer, if any, to the sender. Any change between the total input and output amounts of a transaction goes to the miners as a transaction fee.

Mining

Bitcoin uses a proof-of-work system to create a distributed timestamp server as a peer-to-peer network. This work is often called Bitcoin mining.

During mining, all the computing power of the Bitcoin network is used to solve proof-of-work cryptographic tasks. The aim is to ensure that the generation of valid blocks involves a certain amount of effort, so that subsequent changes to the blockchain can be practically discarded, similar to a 51% attack scenario. Because of the difficulty, miners create “mining pools” to get paid despite these high power requirements, expensive hardware deployments, and/or hardware they own. The largest proportion of mining pools are based in China, where the majority of miners – or about 75% of the computing power – of the cryptocurrency are based.