The account book
Cryptocurrencies combine highly effective encryption techniques already known from electronic cash with the functions of a decentralized, distributed database. The so-called BlockChain. Wikipedia explains it quite well: "The Block Chain is the journal (the electronic cash book as a database) in which all Bitcoin transactions are recorded. It consists of a series of data blocks, each of which combines one or more transactions and provides them with a checksum. New blocks are created in a computationally intensive process called mining and then disseminated to participants over the network."
Distributed or better decentralized is the key word here. Because bitcoins do not exist as physical objects but are the result of an arithmetic operation, the digital certificate can be stored in a distributed manner on the network, thus preventing manipulation. Bitcoins and cryptocurrencies are by no means stored on local memories of smartphones, PCs or on servers on the Internet. They are distributed, in the form of an electronic account book better known as the blockchain.
Encryption techniques are used to carry out a transaction, i.e. the transfer of a bitcoin amount from the old holder to the new holder. A public and a private key guarantee the proper execution of a transaction.
The mining
In crypto jargon, "mining" refers to the new issuance of Bitcoins. With a standard PC, it currently takes a year to generate a bitcoin because the complexity of the tasks to be solved increases over time. Based on the currency idea, this is intended. The computing power currently used to create Bitcoins is estimated to be 6 to 8 times higher than that of the 500 fastest mainframe computers in the world. The computing power is transmitted throughout the network of Bitcoin participants, and each can either create individual Bitcoins or contribute to a partial solution in a group; whereby the interconnected group computing power leads to the "mining" of digital currency units. You need a cost-benefit calculation and put the effort in relation to the return. A particular difficulty of "mining" (German: schöpfen) bitcoin currency units, the process of "mining", is adjusted every 4 weeks to the current network performance. At BitMinter alone, one of the oldest mining companies on the network, the average computer speed is currently around 3,700 terahashes per second. This corresponds to 3,700 trillion calculation operations per second.
The long Bitcoin addresses are a sign of their security and uniqueness. For example, a Bitcoin address looks like this: 3MXxfLZoifLYdS8wJTpvfeDNPt9ZWuMAaN. This complicated structure guarantees that there will never be two addresses with identical combinations. In the meantime, to facilitate payment in retail and catering, it is possible to work with the QR code. This allows automatic scanning into the wallet used, thus enabling payment without further verification.
