Bitcoin is attracting people from all walks of life, from small entrepreneurs to global investors. But what is it really? And perhaps the most important question of all – is it reliable?
Bitcoin, unlike traditional currencies, is highly decentralised and functions without government regulation or central banks, underpinned by a peer-to-peer computer network made up of its users’ machines. Bitcoins are mathematically generated as computers in the network crunch numbers to find solutions to an algorithm, a procedure known as “mining”. The algorithm works in such a way that it becomes progressively harder to “mine” bitcoins over time1 . A useful analogy would be the search for prime numbers: it is fairly easy to find small prime numbers, but finding large prime numbers becomes progressively harder
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