Basics of Bitcoins for Beginners: How Bitcoin Process Works

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Basics of Bitcoins for Beginners How Bitcoin
Process Works
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Index

• Bitcoins for Beginners
• How Bitcoin Process Works?
• 1. Blockchain- Balance
• 2. Private Keys- Transactions
• 3. Mining- Processing

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Basics of Bitcoins For Beginners
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Bitcoins for Beginners

• As a new user, you can get started with the
  bitcoin without understanding the technical
  details.
• Once you installed a bitcoin wallet on your
  mobile or computer, it will generate your bitcoin
  address then you can create more whenever you
  need one.

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• You can disclose your bitcoin addresses to your
  friends so that they can pay you or vice versa.
• In fact, this is somewhat similar to how email
  works, except that Bitcoin addresses should only
  be used once.

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How Bitcoin Process Works?
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1. Blockchain - Balance

• The blockchain is a shared the public ledge on
  which the complete bitcoin network relies.
• All confirmed transactions are included in the
  blockchain.

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• In this way, Bitcoin wallets can calculate their
  spendable balance, and new transactions can be
  verified to be spending bitcoins that are owned
  by the spender.
• The integrity and the chronological order of the
  blockchain are enforced with cryptography.

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2. Private Keys - Transactions

• A transaction is a transfer of value between the
  Bitcoin wallets then gets included in the
  blockchain.
• Bitcoins wallets keep a secret piece of data
  called a private key which is used to sign
  transactions, providing a mathematical proof that
  they have come from the owner wallet.

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• Also, the signature prevents the transaction from
  being altered by anybody once it has been issued.
  
• All transactions are broadcast between users and
  usually begin to be confirmed by the network in
  the following 10 minutes, through a process
  called mining.

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3. Mining - Processing

• Mining is a distributed consensus system that is
  used to confirm waiting transactions by adding
  them in the blockchain.
• It enforces a chronological order in the
  blockchain, protects the neutrality of network
  and allows various computers to agree on the
  state of the system.

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• To be Confirmed, the transaction must be packed
  in a block that fits strict cryptographic rules
  that will be verified by the network.
• These rules prevent previous blocks from being
  modified because doing so would invalidate all
  the following blocks.

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• Mining creates the equivalent of a competitive
  lottery that prevents any individual from easily
  adding new blocks consecutively in the
  blockchain.
• This way, no individuals can control what is
  included in the blockchain or replace parts of
  the blockchain to roll back their spends.

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Thank You