Bitcoin, it is a cryptocurrency that has gained much importance in the world today. You might have been familiar with the term and you might know how great opportunities it offers in terms of investment due to the recent surge in its prices.
But have you ever stopped to think how does this marvelous creation work? Well, let me tell you!
As we already know, Bitcoin works on a decentralised network and it uses a public digital ledger called blockchain to keep the record of all the transactions that are taking place in its system.
But how does a transaction takes place? Well, the transactions in Bitcoin take place with the help of some mathematical formulas. As you already know, Bitcoin, unlike the government-controlled currencies, is completely decentralised. So, the network makes use of some cryptographic mathematical formulas to complete a transaction.
Explore Abdul Vasi's Books on Amazon
Entrepreneurship Secrets for Beginners
Gain insights into launching and running a successful business from scratch.
The Social Media Book
Explore the benefits, challenges, and impact of social media on today’s world.
Tranquility
Discover pathways to inner peace and resilience in a chaotic world.
Bitcoinpreneur
A beginner's guide to understanding and investing in Bitcoin and cryptocurrencies.
Actually, when you get your Bitcoin wallet, you are provided with two cryptographic keys called the private and the public keys. When you are transacting money from one Bitcoin wallet to another, the system checks your private key against the public key of the recipient.
As soon as the cryptographic signatures match and the system approves, the transaction takes place. Once the transaction is completed, a block is created containing the information on the transaction and it becomes a part of the blockchain ledger.
Though it may sound very confusing and complicated, it is actually pretty simple. Bitcoin is the future of currency and its robust working mechanism protects your bitcoins from laundering as well as any threat.
