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1  Bitcoin / Development & Technical Discussion / How does the Bitcoin system work? on: July 15, 2015, 05:40:45 AM
I was considering making an altcoin as a for fun project to play around with in the skype call I'm usually in, but I figured I should learn more about how bitcoin works.

My understanding is that there is a block chain which is a collection of blocks in order. Each block acts as a record of all transfers of bitcoins and the address of those bitcoins. The blocks are then maintained by "miners" and in return, when each block is finished and added to the block chain, miners receive 50 bitcoins (might be less by now).

Assuming this is right so far, then it kind of makes sense. Miners get paid to help maintain records of bitcoin transactions and in return get bitcoins, which then adds to the bitcoin circulation.

What doesn't make sense to me, however, is how people refer to mining pools working on different blocks. If my understanding is correct (which I'm sure it isn't even close), then wouldn't everyone have to work on one block at a time?

Also I was looking at an altcoin generator site that said it would host your coin's node for 4 days, then cut off service.
"After the hosting period is over we shut down the node to which the other nodes tries to connect by default. Hopefully your coin has now enough users so our 'hosting' is not needed anymore."

Does this mean that the way bitcoins work that there is no "central computer" that actually stores this information? I read on the bitcoin.org website that the Bitcoin Core wallet is a "full node" and full nodes are essential to the network.

Is there no main server that people connect through when sending and receiving bitcoins I guess is the simple question.

Also, how does "mining" work? I've read that nowadays mining without dedicated rigs is pointless due to the number of hashes required to finish a block, so I haven't tried it yet (I also wasn't sure where or how to even start mining).

I'm dumb.

 
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