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how does bitcoin work

how does bitcoin work

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Best answer


Bitcoin uses cryptographyin the same way. Instead of converting radio messages,Bitcoin uses cryptography to convert transaction data. That is why Bitcoin is called a cryptocurrency. Knowing that takes you one step closer to understanding how does Bitcoin work. Bitcoin does this using the blockchain.

People also ask


  • What is a bitcoin transaction and how does it work?

  • A Bitcoin transaction is simply a transfer of value between two wallets, which is recorded on the blockchain. To send money from a Bitcoin wallet, the sender must sign the transaction with his or her private key, as proof of ownership of the funds.

  • What is a bitcoin wallet and how does it work?

  • Bitcoin wallets keep a secret piece of data called a private key or seed, which is used to sign transactions, providing a mathematical proof that they have come from the owner of the wallet. The signature also prevents the transaction from being altered by anybody once it has been issued.

  • How do bitcoin miners make transactions?

  • Bitcoin miners select transactions from these pools, and form them into a 鈥榖lock,鈥?which is a collection of transactions sent out to the network. Before a transaction is included in a block, the miner has to ensure that the transaction is valid. It does this by checking if the sender鈥檚 wallet has sufficient funds to execute the transaction.

  • What are the benefits of using bitcoin?

  • Designed to be a viable payment alternative, Bitcoin offers a wide variety of benefits, including the following: Fast Transactions – Using a peer-to-peer network that spans across all the populated continents, it can process and verify transactions in a matter of minutes, regardless of the amount.

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