How Bitcoin Works

Wed Apr 04 16:03:57 CST 2018

This is a question that often causes confusion. The following is a concise explanation! New users need to understand the basics As a new user, you can start using Bitcoin without having to understand the technical details. Once you install a Bitcoin wallet on your computer or mobile phone, it will generate your first Bitcoin address and generate more addresses whenever you need it. You can tell your friends your address and they will be able to pay you Bitcoin through this address and vice versa. In fact, this is very similar to how e-mail works, except that bitcoin addresses should only be used once.

Balance - The blockchain bitcoin blockchain is the public shared ledger to which the entire Bitcoin network relies. All confirmed transactions are included in the block chain. In this way, the Bitcoin wallet can calculate the available balance and verify that the consumer spending in the new transaction is indeed his own Bitcoin. The integrity of the chain of blocks and the chronological order are ensured by cryptography. Transaction - A private key transaction refers to the transfer of value between Bitcoin wallets contained in the blockchain. Bitcoin wallets keep a secret data called private key or seed used to sign transactions, that is, to provide mathematical evidence that these transactions come from the wallet's owner. This signature also ensures that no one will modify it after the transaction has taken place. All transactions are broadcast between users and are usually confirmed by the Bitcoin network in the next 10 minutes through a process known as mining. Treatment - Mining is a distributed consensus system that confirms these transactions by including pending transaction data into the block chain. Mining can ensure that the data in the blockchain is stored in chronological order, maintains the neutrality of the Bitcoin network, and allows different computers on the Bitcoin network to agree on the system state. To be confirmed, the transaction must be packaged into a block that complies with very strict cryptographic rules and verified through the Bitcoin network. These rules can prevent modifications to existing blocks because once there are changes, all subsequent blocks will fail. The difficulty of mining is comparable to winning a lottery ticket. No one can easily and continuously add new blocks to the block chain. Therefore, no one can control what content is contained in the block chain or replace part of the content of the block chain to achieve the purpose of reducing their cost.