You might have recently heard about the market value of Bitcoin skyrocketing and many people investing in Bitcoin. If you are unaware of what is Bitcoin and how Bitcoin works, then today we are here with a detailed article explaining Bitcoin and how it works to you.
What is Bitcoin?
First of all, we need to clear the confusion that revolves around Bitcoin.
Bitcoin is the first cryptocurrency in the world. Bitcoin is a type of digital currency, which means that there is no physical form of Bitcoin currency. The Bitcoin currency can be sent and received by making use of P2P (Peer-to-Peer) technology.
Bitcoin is also a decentralized virtual currency, which means that no central governments or nationalized banks have control over the generation, value, or transactions that are done using Bitcoin.
How Bitcoin Works?
Even though the technology behind Bitcoin is pretty new to most of us, anyone who wishes to get started with the bitcoin currency does not have to know the complete technical details about Bitcoin.
In order to get started with Bitcoin, all you need to do is to find a Bitcoin wallet application and install it on your mobile device or computer, whichever the application supports. After installing the Bitcoin wallet, an address will be generated for your wallet. This address can be made public in order to send or receive payments. A user can create any number of Bitcoin wallet addresses and each Bitcoin wallet address is recommended to be used only for a single transaction.
All transactions that are done using the Bitcoin currency are stored in a publicly maintained record called a “ledger”. The public ledger is shared and a single transaction can have multiple copies in different ledgers so as to main security. Every Bitcoin wallet makes use of this ledger in order to calculate and verify the balance in their account once a payment is made or received.
There are two keys that are used in a Bitcoin transaction: a public key and private key. The public key can be made public and is used to authenticate a Bitcoin wallet so as to make sure that a transaction is made with respect to the correct Bitcoin wallet. Whereas, the private key is supposed to be a secret and serves the purpose of authorizing a Bitcoin wallet owner to their wallet and is also used to sign a transaction.
We have tried to explain what is Bitcoin and how Bitcoin works in the easiest way possible. Hope you found this article informative and if you did, do share this article. Also, if you have any doubts related to Bitcoin or How to buy Bitcoin in India, then do leave a comment below and we will answer your questions.