How does Bitcoin work?
This is a question often surrounded by confusion, so here's a quick explanation!
The basics for a new user
As a new user, you can get started with Bitcoin without understanding the technical details. Once you've installed a Bitcoin wallet on your computer or mobile phone, it will generate your first Bitcoin address and you can create more whenever you need one. You can disclose your addresses to your friends so that they can pay you or vice versa. In fact, this is pretty similar to how email works, except that Bitcoin addresses should be used only once.
Balances - block chain
The block chain is a shared public ledger on which the entire Bitcoin network relies. All confirmed transactions are included in the block chain. It allows Bitcoin wallets to calculate their spendable balance so that new transactions can be verified thereby ensuring they're actually owned by the spender. The integrity and the chronological order of the block chain are enforced with cryptography.
Transactions - private keys
A transaction is a transfer of value between Bitcoin wallets that gets included in the block chain. Bitcoin wallets keep a secret piece of data called a private key or seed, which is used to sign transactions, providing a mathematical proof that they have come from the owner of the wallet. The signature also prevents the transaction from being altered by anybody once it has been issued. All transactions are broadcast to the network and usually begin to be confirmed within 10-20 minutes, through a process called mining.
Processing - mining
Mining is a distributed consensus system that is used to confirm pending transactions by including them in the block chain. It enforces a chronological order in the block chain, protects the neutrality of the network, and allows different computers to agree on the state of the system. To be confirmed, transactions must be packed in a block that fits very strict cryptographic rules that will be verified by the network. These rules prevent previous blocks from being modified because doing so would invalidate all the subsequent blocks. Mining also creates the equivalent of a competitive lottery that prevents any individual from easily adding new blocks consecutively to the block chain. In this way, no group or individuals can control what is included in the block chain or replace parts of the block chain to roll back their own spends.
Now that you understand what cryptocurrency mining is and how it works, let’s take a few moments to understand the attraction of cryptocurrencies and why someone would want to mine them. A Quick Look at the Different Types of Cryptocurrenciesproxy bitcoin bitcoin earnings bitcoin 2020 доходность ethereum balance bitcoin капитализация bitcoin ethereum mist автомат bitcoin monero новости With this in mind, bitcoin developers have pioneered coloured coins that can act as stock in a company. The ‘color’ of the coin represents information about what ownership rights the private cryptographic key provides.bitcoin electrum the ethereum bitcoin investing ethereum github gif bitcoin nicehash bitcoin шифрование bitcoin network bitcoin php bitcoin reklama bitcoin bitcoin mine bitcoin king bitcoin лопнет ethereum platform cryptocurrency gold bitcoin кредит mining cryptocurrency wei ethereum email bitcoin bitcoin настройка криптовалют ethereum компания bitcoin monero minergate monero transaction bitcoin vps simple bitcoin Ключевое слово bitcoin монеты bitcoin changer 60 bitcoin bitcoin gpu форк ethereum аналоги bitcoin rinkeby ethereum ethereum картинки сложность ethereum майн bitcoin bitcoin биржа bitcoin vip kong bitcoin bitcoin loans bitcoin bloomberg bitcoin icon bitcoin electrum tether coinmarketcap bitcoin information bitcoin instagram история ethereum bitcoin forums форекс bitcoin bitcoin news bitcoin capital банк bitcoin bitcoin oil