Everything you ever wanted to know about bitcoin (but were afraid to ask) 2/5

BY DARREN WALL

What is a peer-to-peer network?

You might have used a file-sharing application at some point. Remember Vuze, Napster, and Pirate Bay? If so, you’ve used a peer-to-peer (P2P) network to share files.

P2P is an online network of computers where users open up a part of their computer. With file sharing, it’s usually just a partition of your hard-drive. But in this case, users donate processing power as well as hard-drive space. And the processing power borrowed from the P2P contributes to the overall processing power of the blockchain.

Woah, right?

Colossal processing power is required to create new bitcoin, which is why they need a network of users’ computers. And generating that processing power has a huge electricity demand.

A blockchain host on this p2p network searches the web using dedicated software so that they can find and bid for new bitcoin as they’re created. They’re rewarded in bitcoin for hosting the blockchain. This is known as mining.

Isn’t P2P illegal?

P2P got a bad rap when Napster was shuttered because people were using it to illegally share copyrighted material, such as music, video, and application files. But there’s nothing illegal about P2P networks, per se, as long as the activity they operate is legal.

The P2P facilitates the blockchain, which records transactions with a date stamp, preventing double-spending, and we transfer bitcoin from our wallets to buy things. So, it’s a bit like… well, a bank.

So bitcoin is a like a bank, but it isn’t a bank?

Nakamoto described Bitcoin as a “peer-to-peer version of electronic cash,” facilitating online payments that don’t go through a financial institution.

The P2P creates, maintains, and updates the blockchain, recording payment transactions. And the blockchain records and facilitates two willing parties where they wish to trade directly.

All without regulation. All without governments and corporations. And all anonymously.

Wow. Doesn’t this sound a little illegal?

https://en.softonic.com/articles/everything-you-ever-wanted-to-know-about-bitcoin-but-were-afraid-to-ask?utm_medium=push&utm_source=softonic&utm_campaign=705efced-c40b-47ca-a25a-a681104c16fa&utm_content=

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I will delve into the legalities of crypto's and blockchain.......

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