The idea originally came from Satoshi Nakamoto, who produced the original Bitcoin white paper, describing the principles behind a currency that was entirely electronic and independent from any banks, governments or any other central authority. The first mined block, also known as the Genesis Block, contained a reference to the fractional reserve banking system which Bitcoin was designed to be an alternative to.
Mining and how the Bitcoin network works:
The Bitcoin network’s purpose is to enable users to send Bitcoins to one another . Mining keeps the Bitcoin process secure by chronologically adding new blocks (each block containing several transactions) to the chain. Bitcoin relies on “proof-of-work” as a consensus algorithm: The miners help verify every transaction by solving a cryptographic puzzle, and then add the verified block of transactions to the distributed ledger. Bitcoin’s built-in reward system compensates successful miners with a few Bitcoins. Bitcoin is the first blockchain ever created relying on proof-of-work. It has since spread to become widely used in many cryptocurrencies.
Transactions are connected to a user’s Bitcoin address, which is derived from the user’s private key. A transaction on the Bitcoin blockchain can be seen as a transfer of value between Bitcoin wallets. In reality it’s more similar to a transfer of ownership, a Bitcoin recipient being assigned the right to use the newly acquired Bitcoins using his own private key . Private keys are required to sign transaction and assign new ownership. The signature also prevents the transaction from being altered by anybody once it has been issued. All Bitcoin transactions are forever publicly kept in the network, which means the balance and the transactions of any Bitcoin addresses can be consulted by everyone.
A node on the Bitcoin network is simply a computer running the Bitcoin software. The Bitcoin network counts several thousands of active nodes around the world, with the highest concentration in the United States.The total supply of bitcoins is limited to 21 millions, and between 4 and 6 millions are already considered unusable due to probable loss of the corresponding private keys.