Where did the program come from that makes bitcoins? How can it just be answers to mathematical problems?
In: Technology
Someone who went by the name Satoshi Nakamoto created Bitcoin. That name is known to be a fake name. We don’t for sure who he really is.
When we say that you answer math problems to create Bitcoin, that’s simplifying something very complicated. It isn’t just any old math problems. Your computer must solve very specific math problems that help to keep the Bitcoin system alive.
When you send dollars to someone using your bank, your bank and the US government verify that you really have that money to send. What they are sending isn’t physical dollar bills of course. It’s just the digital version of dollars. If no one checked, it would be easy to create new digital dollars whenever you like! You could send all your friends millions of dollars because no one is verifying that the US government created them instead of you counterfeiting them.
Bitcoin doesn’t have a government to check on things, so it uses the “miners” instead. Miners are people who run a program on their computer to “solve math problems” and they get Bitcoin. But those math problems are actually tracking everyone’s Bitcoin to verify that they really have the Bitcoin they claim to have and they didn’t counterfeit any of it. It’s kind of like being a part of the Bitcoin government. And just like a real government, you’ll get paid for your work! For helping keep the system safe from counterfeit Bitcoin, you will be awarded some Bitcoin.
Note: Mining is actually far more complicated than this, and some of my explanation is still simplifying things heavily. But I wanted to keep it as ELI5 as possible. I hope this helps you get an idea of what’s going on.
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