Counterfeit money looks like real money, but has no value. Fraudsters falsified the first money introduced. Satoshi Nakamoto expected criminal energy to develop his new electronic currency. Therefore, with Bitcoin, he created an electronic payment system that quickly becomes so complex that it is difficult, if not impossible, to counterfeit Bitcoins. Bitcoin is based on a peer-to-peer network. The entire network calculates new blocks during mining, which guarantee the security of Bitcoin transactions. A block is created after solving a complex mathematical problem. The network regulates the level of difficulty of the task so that a new block is created every ten minutes. The computer or computers that guess the correct hash value of the new block will receive newly generated Bitcoins as a reward.
Transactions are public in the Bitcoin network. Members accept correct transactions authorized by the account holder and link them to a new block and distribute it over the network. All users sort out invalid blocks and accept valid blocks. An accepted block is chained to the block chain that contains the Bitcoin transaction database. It contains all previously accepted transactions. So that the databases of all users remain identical, they only continue the longest block chain if there are several valid block chains.
The blocks of the block chain are interdependent, making manipulation extremely difficult.Deleting or changing parts of the block chain means changing all subsequent blocks as well. A new block extends the chain every ten minutes. Hence, it is impossible to create a wrong, longer block chain. In order for the attacker to provide the top of the block chain with his own blocks, he would have to create a correct block faster during mining than the entire Bitcoin network. High effort with no guarantee of success. The complexity of the block chain behind every Bitcoin therefore effectively prevents manipulation. The control of all participants reveals fraud.
