the Bitcoin buy system operates as a peer-to-peer network without centralised servers. The obvious advantage of it is that it’s difficult to shut down. Supply and demand creates a market for Bitcoins as per a traditional financial system. There is no central authority issuing money, and there are no financial regulations offering any sort of protection to those using or trading Bitcoins. The system is designed to ’drip in’ new currency on regular intervals to mimic the normal action of economic growth within a traditional monetary system. The Bitcoin network does is indeed made up of a peer-to-peer network of ’mining’ servers, but what this ’mining’ software is doing is actually running the network itself. Each Bitcoin transaction gets recorded in a decentralised transaction log. For example, if I give you 1 BTC (’BTC’ being a non-official, but commonly used quasi-ISO 4217 code) that transaction gets recorded in this log file. This recording process is not like a giant distributed SQL database. There is no ’INSERT INTO TRANSACTIONS’ and ’UPDATE ACCOUNT SET BALANCE=...’ in this arrangement 14895
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