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August 13, 2012, 07:50:25 PM |
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Transactions are gathered into groups, then they are added as "blocks" to the "blockchain", the database which contains the record of all bitcoin transactions. Any fees associated with any transactions included in the block go to the "miner" who solves the mathematical problem which puts the block into the blockchain. These fees are what keep all the people running computers keeping the system going. Currently there is also a 50 btc reward to solve a block, but that will decrease over time. Essentially, once the transactions are put into a block they become permanent.
Currently bitcoins can be split down to 8 decimals. This unit is unofficially know as a satoshi, thus 1 satoshi = 0.00000001 bitcoin. If nescesarry, in the future the code can be changed to include more decimals.
To mine bitcoins, you have a computer running a program to solve the blocks, thus extending the bitcoin record. Currently there are so many people using such large hardware, and the difficulty adjusts accordingly as established by the program, that it is unprofitable to mine bitcoins unless you have speciallized high powered computing equipment.
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