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How Does Bitcoin Work?
Bitcoin is built on a distributed digital record called a blockchain. As the name implies, blockchain is a linked body of data, made up of units called blocks that contain information about each and every transaction, including date and time, total value, buyer and seller, and a unique identifying code for each exchange. Entries are strung together in chronological order, creating a digital chain of blocks. тАЬOnce a block is added to the blockchain, it becomes accessible to anyone who wishes to view it, acting as a public ledger of cryptocurrency transactions,тАЭ says Stacey Harris, consultant for Pelicoin, a network of cryptocurrency ATMs. Blockchain is decentralized, which means itтАЩs not controlled by any one organization. тАЬItтАЩs like a Google Doc that anyone can work on,тАЭ says Buchi Okoro, CEO and co-founder of African cryptocurrency exchange Quidax. тАЬNobody owns it, but anyone who has a link can contribute to it. And as different people update it, your copy also gets updated.тАЭ
How Does Bitcoin Mining Work?
Bitcoin mining is the process of adding new transactions to the Bitcoin blockchain. ItтАЩs a tough job. People who choose to mine Bitcoin use a process called proof of work, deploying computers in a race to solve mathematical puzzles that verify transactions.To entice miners to keep racing to solve the puzzles and support the overall system, the Bitcoin code rewards miners with new Bitcoins. тАЬThis is how new coins are createdтАЭ and new transactions are added to the blockchain, says Okoro.
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