i looked at different questions in this forum but cannot still clearly figure out. i am not a developer. ok, we have currently 6,25 bitcoin as reward for miners. how to understand in 1-2 non-technical sentences what do these 6,25 bitcoins (or millions of satoshis) represent? is this just a line of code (just numbers) which was programmed at the beginning? i understand principle of bitcoin monetary policy, mining main principles, etc... i just do not understand WHAT is this 'coin' exactly... imagine me as child, how would you tell me what do these 6,25 numbers represent itself, what are they made of, are they just numbers we send to each other in transaction? any comparison to any currently mainstream store of values like numbers on banknote, gold ounce, etc... thanks in advance
The 'coin' is an unspent transaction output (UTXO). It's a long number which specifies a location and some code to allow the UTXO to be accessed by a further transaction which supplies the right key. So ...
- it's not a coin really
- you never get sent the 'coin'. It remains on the blockchain.
- you specified the utxo location before the block was mined, back when you put it in the block you mined. At that time you also created the right key to access the utxo value later.
- if you have trouble with the idea that a number can have value, I suggest you consider what value your bank password has.
- the value is on the blockchain, visible to all. You have control of it with the right key in your wallet.
how to understand in 1-2 non-technical sentences what do these 6,25 bitcoins (or millions of satoshis) represent? is this just a line of code (just numbers) which was programmed at the beginning?
Reward miners get right now for mining a block as subsidy apart from fees. This reward is reduced to half after every 210,000 blocks.
imagine me as child, how would you tell me what do these 6,25 numbers represent itself, what are they made of, are they just numbers we send to each other in transaction?
Money. Yes bitcoin is digital so numbers on a decentralized and censorship resistant network.
The other answers are correct, but maybe more technical than what you would explain to a young child. Perhaps something like this is what you're looking for:
A bitcoin is a digital thing, but it is a special type of digital thing. Most digital things are not scarce, since you can just copy them infinitely without any issue. If you have a picture file on your computer, you can send it to your friends, and they can send it to their friends, and eventually everyone can have a copy of the picture.
But a bitcoin is different! While it is a digital object, it is scarce, meaning we can't just copy/paste it to create more. The way this scarcity is created is simple enough: everybody that uses bitcoin keeps track of every transaction that happens. If you send a bitcoin to your friend, you cannot then send that coin to someone else after, since everyone else will already know you no longer are the owner of it! This means that everyone keeps track of who owns each and every bitcoin, and they also keep track of changes to this record of ownership. The network uses some fancy math and cryptography to make sure that only the rightful owner of a bitcoin can spend it, but this all happens 'under the hood'.
So what is a bitcoin? Where does it exist? The answer is: on the computer of each and every person that runs a bitcoin node! In order to watch all transactions, users will run some code that keeps track of where each and every bit of a bitcoin resides. Each time someone spends some bitcoin, each of those computer nodes will update their record of who owns that bitcoin (and this is what is called the 'blockchain record').
So a bitcoin is a digital thing (some numbers/bits stored on hard drives of bitcoin nodes around the world), but because of the way the network works, it is a scarce digital thing (which makes it more like a physical object, such as gold). Really though, a bitcoin is a novel thing, so while we can compare it to other things we are familiar with, it really is a new type of thing altogether, which is part of what makes it so interesting in the first place!