Where did the program come from that makes bitcoins? How can it just be answers to mathematical problems?
In: Technology
The program isn’t some secret: you can literally find the source code on google for the world to see.
So, One step at a time:
> What is bitcoin *really*?
A ledger. It is nothing more than a giant list of transactions: “Joe pays Sally 4btc. Sally pays Bill 1btc. Hally pays Joe 3btc”. By going trough the list and adding up every point where Joe sends away and receives bitcoin you can find out how much Joe has.
> Where is this ledger stored?
Whoever wants it can simply ask for a copy from someone else on the network. If you simply want to know how much Joe has find someone who has the ledger and just ask them to count for you.
> What if there are multiple ledgers because it takes time for them to travel?
The longest ledger (the one who has more work put in to it) is the correct one by default.
> How do you prevent me from saying “Joe sends me a million btc?”
Everyone has a secret key they can use to sign their transactions, like a password. If you don’t have Joe’s secret key you can’t sign transactions from him, and everyone will call you a fraud.
> “How can we prevent People from changing the ledger after the fact?”
That’s where miners come in. Miners are people who take transactions people are making, make sure they are valid and correct, and add them to the ledger. However before adding them to the ledger they group them together and try to find a verification code. This code is really hard to find, but easy to check afterwards. Because it’s really hard to find if you change the ledger you’ll have to find *new* verification numbers, and that’s really hard and generally not worth it when everyone else is just going to ignore your fake ledger for the longer one that everyone else is working on.
> Where do new bitcoins come from?
Miners, when finding the verification numbers, are allowed to add a special transaction to the top of the block they are verifying that says “The miner gets this specific amount of bitcoins from nowhere”.
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