Bitcoin is one of the strangest things that happened to mankind in the last two decades. People witnessed huge changes in the world of politics or economy, but we think that cryptocurrencies, or more exactly this one is going to have much more impact on our future than 99% of things that happened throughout that time. Also, this cryptocurrency is probably the thing that is most unclear about all these things. Naturally, when we are talking about this, we mean for a majority of Earth’s population. But it doesn’t have to be like that. We are going to give our best to explain to you, our dear reader, how Bitcoin works.
What is Bitcoin?
It is a cryptocurrency, or digital currency, which is not dependent on any country, region, or any geographical entity. It can be used by anyone who is connected to the Internet. They are stored in apps called Bitcoin wallets. It is important to point out that there is not any money or currency involved with Bitcoin because everything is done electronically. The wallets are your base from which you can receive or spend your cryptocurrency. Naturally, you can use more than one Bitcoin wallet. You can have those kinds of apps on your phone or your PC. The important thing is that you can use it from anywhere where you have internet.
How Does Bitcoin Work?
Now we got to the most important part. Bitcoin is working on blockchain technology. This is a shared public ledger which is crucial because the entire Bitcoin network is relying on. Every confirmed transaction is always going to be added to blockchains. Whenever users are initiating transactions, they need to be verified by blockchains. To learn more about the transaction part, which is the “mining”, you could expand your knowledge on Techslang platform. You should think about blockchain as a physical ledger that could be maintained by banks. However, this is public and anyone can use this ledger in order to complete their transactions. This cryptocurrency is using public-key cryptography.
How Can Bitcoin Help You and Me?
Now, we are going to talk about practical stuff. There are no banks or individuals who maintain that transaction ledger. This ledger is available for anyone who wants to use it. Users can even become a part of communities like BitcoinAussieSystem.com, in order to get a better insight into the world of Bitcoin. Different from usual transactions where we are required to enter our personal details, transactions only need the address of your wallet. They don’t need your name or address where you live. The only thing that you need for your transactions is your private key located in your wallet.
Important Terms in the World of Bitcoin
– Altcoins – Cryptocurrencies who are seen as an alternative to Bitcoin
– Bit – The sub-unit of bitcoin
– Bitcoin – Overall bitcoin concept
– bitcoin – Unit of the currency itself
– XBT and BTC – Abbreviations for bitcoin cryptocurrency
– Confirmation – Confirmation of transaction or better said, successful selling of the bitcoin on the bitcoin market
– Mining – While this cryptocurrency was still in the production process, that process was called mining and people who mined Bitcoin were called miners