Bitcoin is everywhere, and you can’t ignore the fact that everybody knows very little about it. It almost sounds like an alien that has already taken over the world. Yeah, we agree that bitcoin is a completely different concept, and it might seem hard to understand, but it’s not impossible to grab the concept.
When bitcoin started, everybody was confused, and they didn’t really know anything about it. But if you look today, then lots of people are making a fortune by investing in bitcoin. So, in this post, we are going to break down the concept of bitcoin by comparing it with the betting game. This will help you to understand bitcoin in a better way.
Just imagine a scenario where you are playing a betting game with your friends, but none of you have any real money to play. So, in order to keep playing you create a system of keeping ledgers where you record all the wins and loss. But to make sure that everything is fair, you don’t just appoint a single friend to keep the records. So, everyone keeps a record to ensure that everything tallies up at the end. In this scenario, there is no way to cheat, since everybody keeps a record.
In this particular system, everybody can tally up the records with others to make sure that everything is fair. So, cheating is not possible since everybody will have their own ledger that records everybody’s wins and losses. The only way to cheat is when everybody in this system agrees to cheat, which practically contradicts the meaning of cheating.
The ledgers are not hidden from anyone, hence you can see ledgers created by others and keep a record of it too. You can add money whenever you want, and the ledger keepers will update the transactions record. You can also update your ledger to keep yourself updated. This is a fair game that allows you to have trust in the system in total transparency.
Now, since your friend is updating the ledger and he is working hard on ledger keeping, he will need some payment, hence he gets paid for his hard work and efforts. The payment is done with real money that is provided by an external source. Let’s assume that this external money comes from a vault that has limited money. The money in the vault is not a part of the betting game, but as soon as your friend gets paid for the work it becomes a part of the game.
This pretty simple analysis of betting game showcase the entire structure of bitcoins. But bitcoin is much bigger than just a simple game of betting. Now imagine that bitcoin is operated on a global computer. Each transaction made by a user is treated as a block that gets connected with the last block through blockchain technology. Ledger keepers in this system are known as bitcoin miners who work pretty hard to ensure that they are recording all the transaction. They are also responsible to mine bitcoins.