how bitcoin works #special for beginners
How does Bitcoin work?
This is a question that often causes confusion. Here's a brief explanation!
Basic for new users
As a new user, you can simply start using Bitcoin without having to understand the technical details. After you install the Bitcoin wallet on your computer or mobile phone, it automatically creates your first Bitcoin address and you can create more addresses whenever you need them. You can give your Bitcoin address to your friends so they can pay you or vice versa. Very similar to how email works, except that the Bitcoin address can only be use once
Balance - chain-block
The blocks are a common transactional note in which the Bitcoin network rests. All confirmed transactions are included in the chain-blocks. Thus, the Bitcoin wallet can calculate the remainder of the money that can be spent and the new transactions can be verified to spend with the bitcoins that the user owns. Integrity and chronological sequence of chain-blocks are applied with cryptography.
Transaction - private key
A transaction is a transfer of value between a Bitcoin wallet that is included in a chain-block. The Bitcoin wallet stores a secret section of data called a private key, used to sign transactions, providing mathematical proof that it is true that the owner of the wallet is transacting. Signatures also prevent transactions from being changed by anyone after they are published. All transactions are broadcasted between users and will usually begin to be confirmed by the network within 10 minutes, through a process called mining.
Processing - mining
Mining is a distributed agreement system used to confirm transaction queues by inserting them into chains. Mining arranges chronological sequences in chain-blocks, protects network neutrality, and allows different computers to agree on the state of the system. To be confirmed, the transaction must be wrapped in a block that fits the very strict cryptographic rules and will be verified by the network. The rule to prevent the previous block is modified because it will cancel all the next block. Mining is also like a competitive lottery to prevent individuals by simply adding new blocks successively into the chain-blocks. Thus, no individual can control what is put into chains or replace parts of the chain-blocks to reverse their transactions.
Go to the rabbit hole
This is a very short and concise summary of the Bitcoin system.