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Proclaimer: I'm not an advanced crypto guy, so sorry for any misunderstood concepts which may have happened during writing this article. I am more than happy to know more references and your knowledge so I can get a better understanding about this concept.
So as an apprentice in crypto space, today I had to do a report about Satoshi's beautiful creation: Bitcoin
So I directly went for the whitepaper which can be found in here. I downloaded it and started reading it. I literally read the article 6 times and went to youtube for someone to actually read it out loud and explain it just so I can comprehend it.
So it is said that BTC is a peer to peer electronic cash system. but what does it mean ?
I'm not that history-reading type of guy so I don't know any theories about why bitcoin came and why Satoshi created it but It is clear that He/She had something against institutions like banks and the one's dealing with money. I mean let's face it, trusting corporations is not expected from a sound mind! People hardly ever trust each other in financial transactions let alone big institutions far from empathy for man-kind.
So Satoshi created this magical spark to revolutionize financial transactions and cutting out middle men which benefits the economy by reducing minimum amount of a transaction ( so you can use much smaller money ) and saving money by cutting out transaction fees.
So let's dive into the technology (as far as I can comprehend)
Imagine 2 users are willing to do a transaction between each other. Transactions are used to process with something called "hash". hash is an encrypted code that reveals user 0's (last user that transacted to user 1) digital signature which comes from something called private key that only user 0 is aware of and completely encrypted so no one can hack it or use it or even guess it. user 1 by using his/her private key "confirms" the following transaction (to avoid double-spending or creating money out of thin-air) and then the transaction can be completed and the money will go to user 2. public key in here is used to understand users private keys in the network (because of privacy).
as an another layer of privacy and making sure that double-spending is omitted from the network, it uses "Time stamped Servers". it simply means that the date and detail of every transaction is recorded within and is visible to everyone on the network.
here is where the Proof-of-work comes in. it is said that every block has a hash (encrypted code) and it has to be processed using CPU power (nowadays ASIC and GPUs are used) and electricity. every Node( responsible for breaking hash cryptographies and adding blocks to the chain) has 10 minutes to do it. so everyone has to "work" to "proof" that they have broke the hash.
the first transaction on the new blocks added to the chain is a special one. because it rewards the Node responsible for adding it to the chain. this reward is in the form of Coin ( that governs the chain and the system ). this coin is what we call "Bitcoin".
