Bitcoin Explained: How Thousands of Computers Verify Transactions

Bitcoin is a digital currency that allows users to send money directly to another person without involving a bank or payment company. Instead, thousands of computers around the world work together to verify and record transactions on a shared ledger called the blockchain.

The creator of Bitcoin, known as Satoshi Nakamoto, released it in 2009 after the 2008 financial crisis exposed weaknesses in traditional banking systems. The goal was to provide an alternative way for people to move value across the internet without relying on a central authority.

Transactions are verified through mining, where specialized computers compete to solve complex mathematical puzzles. The first successful miner earns the right to add the next block of verified transactions to the blockchain, which requires substantial computing power and electricity.