You’ve heard of Bitcoin, but what is it and how does it actually work? Our Lucidchart video explains the basics of Bitcoin, cryptocurrency, blockchain, and mining.
Bitcoin is a type of cryptocurrency, aka digital money that’s decentralized. That means no single person or government controls it. There are lots of cryptocurrencies besides Bitcoin, like Ripple, Ethereum, and Dogecoin.
Bitcoin was created by Satoshi Nakamoto. Nobody knows who that is. Maybe it’s Al Gore? He already invented the internet. 😉 Whoever they are, they own almost a million bitcoin, worth billions of dollars. The first Bitcoin purchase was for two large pepperoni pizzas for 10,000 Bitcoin, which is now worth about $75 million.
Bitcoin is a transaction recorded on the blockchain, a digital ledger. The blockchain uses super complex math to keep things secure and prevent counterfeiting. The blockchain is updated by miners. Miners race to validate every transaction by solving super complex math with their mining computers. The first miner to solve the equation updates the blockchain and is awarded 12.5 new bitcoin, worth about $90,000!
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