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What Is Bitcoin and How Does It Work?

What Is Bitcoin and How Does It Work?


Basically, Bitcoin is just like any other currency like the United States Dollar, Euro, Pound or New Zealand Dollar. However, there is one big difference, it’s completely decentralized. What is decentralized? Decentralized means nothing is controlled or managed in one place.

Difference Between Bitcoin and other Currency

Suppose you want to transfer money from person A to person B and your money is stored in the bank. if the bank is closed you cannot transfer money but in bitcoin, you can transfer money whenever you want. In traditional currencies, all data is managed by a central ledger system in which all transactions must go through the exchanged. The difference with Bitcoin, however, is instead of being processed by a central system the money will go straight to the person or business you’re trying to give money.

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History of BITCOIN

Bitcoin was invented by an unknown person or group of people using the name Satoshi Nakamoto and was released as open-source software in 2009. The reason behind creating bitcoin is to remove the concept of the bank it means there is no middle man involved in it.

How Does Bitcoin Work?

Now you’ve probably learned what is a digital currency but you don’t know how does this mysterious revolutionary currency actually work we’re giving you an exclusive behind-the-scenes peek into the inner workings of cryptocurrency so you too can become an expert in this field and impress everyone with your newfound knowledge

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Suppose you already make a Bitcoin payment to a company you use four bitcoins from your digital wallet here’s how the transaction would work. We’ll start with creating a new Bitcoin address where it’ll send your payment this will generate a private key which will only be visible two-bit cool, and a public key visible only to you.

Next you tell your Bitcoin software which is either on your computer or mobile device to transfer bitcoins from your wallet to another bitcoin address this will serve as the transaction message all that’s left is for your Bitcoin client to provide a digital signature of the transaction request with the private key of the address from where you’re transferring your Bitcoin

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Finally, your transaction will be verified shortly through mining this doesn’t take long at all usually only a couple of minutes for those of you who don’t know what Bitcoin mining? A system run by people called Bitcoin miners that solves mathematical equations to issue Bitcoin your transaction will then be uploaded to the Bitcoin network or a ledger called the blockchain.

If you’re interested in the more technical or theoretical side of Bitcoin especially if you’ve always wanted to know about how Bitcoin is actually minted make sure to bookmark our website so you can stay in the loop.Regard ABDUL REHMAN


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