What is a Bitcoin and how does it work?

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Bitcoin, digital currency, cryptocurrency, how does Bitcoin work, what is Bitcoin, how to buy Bitcoin, Bitcoin price, Bitcoin value, Bitcoin news

What is a Bitcoin?

Satoshi Nakamoto.

Bitcoin is a digital asset and a payment system invented by Satoshi Nakamoto. Transactions are verified by network nodes through cryptography and recorded in a public dispersed ledger called a blockchain. Bitcoin is unique in that there are a finite number of them: 21 million. Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services. As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment. Bitcoin is decentralized: it is not subject to government or financial institution control.

How does Bitcoin work?


How does Bitcoin work?

Bitcoin is transferred between users through bitcoin addresses, which are randomly generated strings of letters and numbers. Bitcoin addresses are also public keys, which are used to verify transactions. Transactions are verified by network nodes through cryptography and recorded in a public dispersed ledger called a blockchain. Bitcoin nodes use the blockchain to differentiate legitimate Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere.

What is Bitcoin mining?

What is bitcoin mining?

Bitcoin mining is the process of adding transaction records to Bitcoin's public ledger of past transactions. This ledger of past transactions is called the blockchain as it is a chain of blocks. The blockchain serves to confirm transactions to the rest of the network as having taken place. Bitcoin nodes use the blockchain to differentiate legitimate Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere. Bitcoin miners are rewarded with transaction fees and newly created bitcoins. This provides an incentive for people to mine bitcoins and keeps the Bitcoin network secure.

What are Bitcoin wallets?

Bitcoin wallets are applications that allow users to store, send, and receive bitcoins. Bitcoin wallets can be desktop, mobile, or web applications. Desktop wallets are applications that are installed on a computer and allow users to send and receive bitcoins with them. Mobile wallets are applications that are installed on a mobile device and allow users to send and receive bitcoins with them. Web wallets are applications that are accessed through a web browser and allow users to send and receive bitcoins with them.

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