Bitcoin is another word for cryptocurrency. Nearly everyone must’ve heard this term whether they know much about cryptocurrency or just heard a little about it. Bitcoin is a virtual money. In layman language, Bitcoin is simply a computer programme that enables people to exchange the value of money with each other to make transactions.
If you want to know more about how Bitcoin works, continue reading.
Bitcoin was the first cryptocurrency that can be exchanged like cash but online. Many people prefer to make transactions using Bitcoins because it is quick and easy to set up. Bitcoin transactions are held on servers all across the world. It is a blockchain. The blockchain is where all the blocks are added. Blocks are a group of transactions that have been collected together after a specific period of time.
When people make transactions online, they are broadcasted publicly to the network and then shared from node to node. Nodes are where the servers for Bitcoin are set up.
Blockchains are a shared public ledger on which the whole network of Bitcoin relies on. It allows the Bitcoin wallets to calculate their balances so that when new transactions are made, they can be verified.
Transactions are a transfer of value between Bitcoin wallets that are included in the blockchain. They keep an undisclosed piece of data called a private key. This private key is used to sign transactions to provide proof that the transaction was made from the wallet of the owner. This also ensures that nobody can alter the transaction.
The transactions are then publicly listed and then confirmed within several minutes. This process is called mining. This mining process is a system used to confirm any pending transactions by including them in the block chain. In order for transactions to be confirmed, they are put in a block that fits the cryptographic rules that will then be verified by the network.
They prevent previous blocks from being modified. Nobody can control what is included in the blockchain or replace it to change the amount they’ve spent.
There are many Bitcoin dedicated servers that allow Bitcoin to be used as a mode of payment. These payments are irreversible and cannot be refunded once made and it is very hard to copy, make clones or even spend Bitcoins that don’t belong to you.
Bitcoins are a great concept and you should definitely learn more about it.