What problem does bitcoin solve?

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Miracle Emmerich asked a question: What problem does bitcoin solve?
Asked By: Miracle Emmerich
Date created: Sat, Jun 5, 2021 1:40 PM
Date updated: Wed, Jul 27, 2022 10:43 PM

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Top best answers to the question «What problem does bitcoin solve»

The problem that Bitcoin solves is the reversibility of electronic payments. In the seminal Bitcoin whitepaper, Satoshi Nakamoto wrote, Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments…

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Still, while bitcoin could ultimately solve real problems in this area, there are more immediate use cases for bitcoin in emerging markets. Brian Gamido, whose company Palarin is focused squarely...

The problem that Bitcoin solves is the reversibility of electronic payments. In the seminal Bitcoin whitepaper, Satoshi Nakamoto wrote, Commerce on the Internet has come to rely almost exclusively...

Bitcoin’s solution to the trust and censorship problem was to create a mechanism whereby all the participants participating in this payment system could agree on the validity of transaction records, and all keep identical copies of those records.

Broadly speaking - Bitcoin solves the problem of verification. It allows getting verified answers from a group of untrusted individuals (See my answer here for details on How Bitcoin Mining Works ), instead of trusting a single authority to do the verification.

Bitcoin mining works by compiling the transactions, the value that depends on all previous blocks, and then finding a “nonce” that meets the criteria. The purpose of solving this problem is merely to show that work was done to get the answer. It comes from a problem called the “Byzantine General’s problem.”.

However, the majority of these newly created money are given to the banks and large corporations to solve their problems. While the public only receives a small portion of the new money. And this gain is shadowed by the the large depreciation of their savings.

Their computers bundle the last 10 minutes worth of bitcoin transactions into blocks, then work to solve cryptographic problems to help validate that block. The cryptographic problem involves producing a hash-based algorithm-generated set of data proof-of-work thats built on the solution to the previous transaction block.

The value of Bitcoins does not depend on the stock market and currency traders, it’s a free, decentralized market determined by supply and demand. Physical Loss One downside is that Bitcoin users have misplaced an estimated 20% of all existing tokens, and unlike fiat currency which can potentially be recovered, it is highly unlikely they will ever be recovered.

To understand what problem Bitcoin miners solve we have to first understand what SHA-256 is. SHA-256 stands for “Secure Hash Algorithm” which is a Cryptographic Hash Algorithm. A cryptographic hash (sometimes called ‘digest’) is a kind of ‘signature’ for a text or a data file. SHA-256 generates an almost-unique 256-bit (32-byte) signature for a ...

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