#NewsTrade Introduction
Bitcoin is a decentralized cryptocurrency that allows secure digital transfers without the need for an intermediary like a bank. Its operation is based on a set of algorithms and technologies that guarantee the integrity, security, and veracity of transactions. In this article, we will explain how the algorithm that makes Bitcoin possible works.
1. The foundation: blockchain technology
Bitcoin uses a distributed database called blockchain. This chain stores all transactions made since the creation of Bitcoin. Each block contains a set of transactions, a timestamp, and a link to the previous block through a code called hash. This structure ensures that data cannot be modified without affecting the entire chain.
2. Hashing and SHA-256
The main algorithm that secures the Bitcoin network is called SHA-256 (Secure Hash Algorithm 256 bits). This algorithm takes any amount of data and generates a unique 64-character string (256 bits). It is practically impossible to predict what data will produce a given hash, ensuring security and resistance to manipulation.
3. Proof of Work
To add a new block to the chain, "miners" must compete to solve a difficult mathematical problem: finding a nonce (a random number) that generates a block hash with certain characteristics (for example, starting with a specific number of zeros). This process is called proof of work and requires a large amount of computational power. The first miner to succeed transmits the block to the network and receives a reward in bitcoins.
4. Mining and decentralized consensus
Mining not only creates new bitcoins but also ensures that all transactions are legitimate. The nodes of the network validate new blocks, ensuring that transactions are not fraudulent (for example, spending the same bitcoin twice). Consensus is reached when the majority of nodes accept the new block as valid.
5. Security and resistance to attacks
Thanks to decentralization, the Bitcoin algorithm is extremely resistant to attacks. To modify the blockchain, an attacker would need to control more than 50% of the total computing power of the network, which is practically unfeasible today.
Conclusion
The Bitcoin algorithm combines advanced cryptography, efficient data structures, and a decentralized consensus mechanism to create a secure and reliable digital currency. Although complex in its implementation, the system is designed to offer transparency, resistance to censorship, and trust without the need for intermediaries.