Bitcoin is the name given to the units of money or currency used on the Bitcoin protocol. Its abbreviation is "BTC" i.e 1BTC, like 1USD for United states Dollar. unlike analogue currency Bitcoins do not exist in physical form, rather only as numbers associated with a Bitcoin address that identify their value. This number can be replicated in physical tokens such as physical coins, paper print outs or card like objects but are only identifiable as genuine currency on the Bitcoin peer-to-peer distributed network by the authenticity of their numbers. This form of currency coding, unlike serial numbers on paper currency, is highly secure due to its unique identification on the Bitcoin registry that validates the coin instantly for online transfers.
Bitcoins are created on the Bitcoin network through the act of "mining". The term "mining" refers to the act of discovering Bitcoins through applied effort(computational) on the Bitcoin network similar to the act of mining for gold on other precious commodities. The computational effort taken by "miners" on the network is reflected by the solving of complex mathematical problems which requires brute force processing power and therefore is an investment of time and energy.
The mathematical problem is a "proof of work" solution that result in the awarding of bitcoins to the miner and the creation of new blocks. The difficulty of these problems can vary based on the strength of the network as well as the proportionate reward of Bitcoins. The network is based on an open source peer distributed software that has rigid parameters that govern the pay-off. The system is designed to be easier during the start of the process, resulting in large pay-offs , and reduces by half by every four years that the Bitcoin network is active. So a solution in 2010 would have yielded twice as many Bitcoins as it does in 2014 and will yield half as many Bitcoins in 2018 and so on.
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