What is bitcoin and how does it work?

What is Bitcoin? Bitcoin is the first and most widely recognized cryptocurrency. It enables peer-to-peer exchange of value in the digital realm through the use of a decentralized protocol, cryptography, and a mechanism to achieve global consensus on the state of a periodically updated public transaction ledger called a 'blockchain.'

How does a bitcoin wallet work?

Transactions - private keys. 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.

What is bitcoin mining?

Bitcoin mining is the process of adding new transactions to the Bitcoin blockchain. It’s a tough job. People who choose to mine Bitcoin use proof of work, deploying computers in a race to solve mathematical puzzles that verify transactions.

What is a block on the bitcoin blockchain?

A "block" on the Bitcoin blockchain is a file storing 1 MB worth of Bitcoin transaction records. "Miners" compete to add the next block using specialized hardware to solve a hard mathematical problem, producing a random 64-character output called a "hash," completing the task and locking the block so it can't be changed.