Finance

An introduction to bitcoins

introduction to bitcoins

Bitcoin is the first ever decentralized cryptocurrency, it is electronic money that one can send and receive over the internet. They are generated by application called bitcoin miner in which people are used to solve mathematical problems. The earned crypto currencies are stored in digital wallets.

When bitcoins are transferred an electric signature is added and then the transaction is verified by a miner. There is a public ledger called blockchain in which all those transactions are recorded. The users involved in these transactions are kept anonymously in the network and their identity is partially revealed if only they wish.

Once you have installed wallet software on your device say laptop or mobile phone, your first bitcoin address will be generated. This address can be shared to your friends such that they can send and receive bitcoin to and from you. The only thing is you can use this address only once.

bitcoin network

Blockchain is a public ledger which is shared to all and the entire bitcoin network depends on this ledger. All completed transactions are recorded in this block chain. When you transfer electronic currency from one wallet to another then it is called bitcoin transaction. Private keys are used to sign transactions and public keys are known for all in order to transfer them.

Bitcoin mining is a process of adding new transaction records to the blockchain or public ledger of bitcoins. It is called blockchain since it is a chain of blocks. In this process, one can generate new bitcoins and the one who mine this digital money are called miners.