- Mar 4, 2011
I think there are plenty of articles that explain well.I still don't understand how bitcoin works and how people just "mine" them and can use them.
I kind of get it at high level.
1. There are blocks or some crap that you can mine. And they yield bit coins. In order to mine them, they require tremendous CPU/GPU.
2. The blocks and/or bitcoins all have a unique serial # to them. And everything is in full transparency. Everyone can look at which coins are owned by whom, came from which blocks etc.
3. Also every transaction of bitcoins are in full transparency as well. So the supposedly entire integrity of bitcoin 'system' stays intact.
That's it. The bitcoin themselves have no value inherently. But people assign value to them because of its integrity & rarity- just like how we decided to assign value to gold, diamonds, etc.