Bitcoin – The Basics

As a new user, you can get started with Bitcoin without understanding the technical details. As soon as you have installed a wallet on your computer or smartphone, it generates your first Bitcoin address and you can create more as soon as you need them. You can share your Bitcoin addresses with your friends so that they can send money to you, or vice versa. In fact, this is similar to how email works, except that Bitcoin addresses should only be used once.

Account balances – blockchain

The blockchain is a shared public booking system on which the entire Bitcoin network is based. All confirmed transactions are stored in the blockchain. In this way, Bitcoin wallets can calculate the account balance and new transactions can only be carried out if the Bitcoins actually belong to the sender. The integrity and the chronological order of the blockchain are ensured by cryptography.

Processing – mining

Mining is a distributed consensus system that is used to confirm pending transactions by adding them to the blockchain. Mining enforces a chronological order of the blockchain, protects the neutrality of the network and ensures that the various computers agree on the status of the system. In order to be confirmed, transactions must be placed in a block. This must meet very strict cryptographic rules that are verified by the network. These rules prevent previous blocks from being modified, since a change would invalidate all subsequent blocks. Mining is also a kind of lottery with strong competition that prevents anyone from simply adding new consecutive blocks to the blockchain. In this way, nobody can control what is added to the blockchain or modify parts of the blockchain in such a way that their own expenses are reversed.