Next, we should familiarize ourselves with the basic concepts underlying cryptocurrencies. We use Internet data for this.
The blockchain was invented by a person (or group of people) using the name Satoshi Nakamoto in 2008 to serve as a public register of bitcoin cryptocurrency transactions. The identity of Satoshi Nakamoto remains unknown to this day.
Blockchain (from English — block chain) is a distributed registry consisting of a chain of blocks, inside each of which transactions are recorded. Each subsequent block is linked to the previous one. This sequence cannot be broken or modified, otherwise the data in the cryptocurrency network will become invalid. Wallet is an application for storing cryptocurrency.
Blockchain (English blockchain, originally block chain — a chain of blocks) is a continuous sequential chain of blocks (a connected list) containing information built according to certain rules. The connection between the blocks is provided not only by numbering, but also by the fact that each block contains its own hash sum and the hash sum of the previous block. Changing any information in a block will change its hash amount.
The basic principles of blockchain are:
distribution and decentralization
high level of security
absolute transparency
impossibility of changing already recorded data.
Blockchain allows you to automate the process of data assurance and event confirmation due to the distributed nature of storing information that is not controlled by a specific regulator. Since the distributed registry of information block chains is stored on different computers, any user who has access to them can check the availability and integrity of this data.
Nodes (from the English node – “node”) are computers connected to the network and ensuring its functioning. To be precise, nodes are software that allows you to interact with the network. Nodes play an important role in the blockchain, namely, confirmation of transactions and blocks, verification of blocks and, thus, ensure the security and trouble–free operation of the network.
Stablecoin (from the English stablecoin) is a common name for cryptocurrencies, the exchange rate of which is being tried to stabilize, for example, by linking quotes to conventional currencies or exchange-traded commodities (gold, oil). Cryptocurrency rates are characterized by extremely high fluctuations. So, bitcoin shows instability at a level higher than gold, index funds on exchanges and most other financial assets. This sharply limits the applicability of cryptocurrencies outside of a narrow circle of users.
Blockchain is pure programming, and different blockchains and coins are built in different languages. Bitcoin works in C++, and Ethereum works in both C++ and Python. Some blockchains try to help their spread by using several programming languages (for example, Dragonchain supports Java, Python, NodeJS and C#).
The bitcoin blockchain uses the SHA-256 hashing function.
But, the most common (in particular, used in the bitcoin blockchain protocol) is a hash function called SHA-256 (from Secure Hash Algorithm — a secure hashing algorithm). This hash function generates a hash in the form of a string of 64 characters (length — 256 bits or 32 bytes).
How transactions work in the Blockchain on the example of Bitcoin. The participant sends Bitcoins from his wallet to the wallet of another participant. Then the miners check and include this and other transactions in the block. After that, it is confirmed. Miners charge a certain commission for checking and confirming transactions. The amount of the commission and the time of receiving Bitcoins directly depends on the network load.
An unspent transaction is the amount of cryptocurrency not spent during the transaction. This unspent amount is the result of the transaction, which is sent back to the user.
The main advantage of blockchain is its transparency, because everyone can get acquainted with the information inside the blocks, but no one can change or destroy it.
Validators are node operators. Their task is to check the blocks added to the network for validity, thereby ensuring the operation of the blockchain. Validators are rewarded for this. Validators need to reserve a certain amount of tokens to participate in voting for the blocks being added.
You can find your bitcoins and check the status of the transaction using the resource Blockchain.info . To do this, go to the official website and enter the wallet address, the hash of the transaction or block, or the IPv4 address in the search bar. Blockchain.info it will give details about the address: The total number of transactions; How many bitcoins are transferred to this wallet; The final balance.
Transaction hash (txid) is an identifier used to uniquely identify a particular blockchain transaction.
The hash of a transaction usually looks like a random set of letters and/or numbers. This is an example of a Bitcoin transaction hash: f5c35d081cc958f0999cf0f7a5e5e9f465f18c346640626555f1129f02f5ce60.
The bitcoin hashrate is the full capacity of all mining equipment that is connected to the network. In another way, this is the rate of cryptocurrency mining. Professionals also called it hashing speed. The parameter shows the amount of resources spent on maintaining the network in working order and mining bitcoins.
In the bitcoin blockchain, each block holds about 3,000 transactions. In addition to transactions, there is a header in the block. It records the hash of all transactions, the hash of the previous block, the time of block creation and other service information. A transaction block is a special structure for recording a group of transactions.
The platform is capable of processing 1500 transactions per second. For comparison: bitcoin has this indicator equal to seven, ether has 15, and Visa and MasterCard have about 20,000.
To verify a bitcoin transaction, go to the page https://www.blockchain.com/BTC/tx / and enter the wallet address or transaction hash. You will see all the information about the operations (incoming and outgoing), the amounts and the number of confirmations. As you can see, it’s easy to find the transaction you need by dates and see how it’s doing. Please note that there is a filter with which you can quickly display only unconfirmed operations.
There are three main ways to withdraw money from bitcoin:
direct sale of cryptocurrency (you need a buyer you trust)
exchange with the help of special services (the rate is usually low)
exchange or sale on the stock exchange (you can play on the course, but it’s quite difficult to figure out)
Blockchain is also called distributed ledger technology, because the entire chain of transactions and the current list of owners are stored on their computers by many independent users.
A decentralized cryptocurrency is a currency that does not have a single center. Almost all systems that ensure the turnover of virtual funds use the computer resources of individuals around the world. These people are called miners.
At the moment, the blockchain weighs 145 gigabytes and grows by about 4 gigabytes per month. Doubling the block size will mean that the network will start producing 8 gigabytes of data per month.
Hash operations are available in the history of the Bitcoin wallet. On Binance it looks like this:
Log in to your personal account
Go to the “Wallet” section
In the menu, select “Overview”
and click on “Wallet History”
In the opened list of deposits and withdrawals, select the desired transaction.
The identifier is in the TxID field
A transaction identifier (TxID), or transaction hash, is a unique string of characters assigned to each transaction that is validated and added to the block chain. In other words, the TxID is an identification number that marks each transaction in the block chain.
Hashrate is an indicator of mining performance, the speed at which a miner finds a hash function. Performance is measured in the number of hashes per second (H/s). The higher the hashrate, the higher the expected mining efficiency, the amount of remuneration received. There is a close connection between the three key concepts of mining: – hashrate – complexity – profitability.
Terahash is the prefix Tera and the word Hash. Tera is a prefix used in the International System of Units (SI) meaning one trillion (1,000,000,000,000). That is, 1TH/s is the speed of 1 trillion hash function calculations in 1 second of time. Modern mining machines have a hashrate of about 100 TH/s and consume about 3-4 kWh of electricity, heating up and emitting a lot of heat and noise (about 80 decibels).
The number of bitcoins is limited — there can be a maximum of 21,000,000. In the summer of 2020, miners mined about 90% of the coins.
The execution time of the transfer depends on its place in the queue, however, as a rule, the transfer is performed within 1-3 minutes. After the transfer is sent, the speed of its processing and confirmation depends on the cryptocurrency protocols and networks. The transfer you sent will be available to the recipient after several network confirmations (from 2 to 10).
How to withdraw cryptocurrency in the Binance application
Go to the Binance application and select “Wallet” – “Withdrawal”
Select the cryptocurrency that you plan to withdraw, for example, BNB. Then click “Send via crypto network”
Insert the address to which you want to withdraw funds and select the network.
A decentralized exchange is a platform that allows users to fully control their own funds. In addition, there are no intermediaries on such an exchange. Decentralized peer-to-peer exchanges have emerged to solve the problems associated with centralized platforms. Cryptocurrency is a digital virtual currency that is put into circulation without the participation of a Central bank, built on an open and distributed encryption and data storage technology (blockchain), which has some functions and properties of fiat money, such as: a medium of exchange, a means of saving, a unit of account.