The digital currency could provide a secure and much needed way of more easily spending and moving money, especially in developing countries where spending and moving money isn’t difficult or totally secure.
So how does it work? This video from The Guardian breaks it down:
Quite possibly the most integral part of the Bitcoin functionality is the blockchain which acts as a ledger for all Bitcoin transactions, operated by miners’ who organise and secure transactions into the blockchain. Think of it as a traditional bought ledger that keeps a record of every currency transaction.
It’s shockingly uncontroversial and it allows total strangers to hold and exchange digital money in a completely transparent way – without having to trust each other or any central authority and without compromising privacy. It works in minutes and is estimated to save banks £20 million per year by 2020. To understand this, it is important to distinguish between money and cash.
“A blockchain is essentially just a record, or ledger, of digital events – one that’s ‘distributed’ or shared between many different parties. It can only be updated by consensus of a majority of the participants in the system,” says Mike Gault, the Founder and CEO of software security company Guardtime. “And, once entered, information can never be erased. The bitcoin blockchain contains a certain and verifiable record of every single bitcoin transaction ever made.”
Please note: We have mapped this to Japan, as we have no idea where to map it to. Satoshi Nakamoto is a pseudonym used by the unknown person or people who designed bitcoin.