How does bitcoin work?

This question often causes confusion. This is also a clever explanation!

Basics for a new user

As a new user, you can start working with bitcoin without knowing the technical details. Once you have installed a Bitcoin wallet on your computer or mobile phone, your first bitcoin address will be generated and you can create more addresses if needed. You can reveal your addresses to your friends so they can pay you, or vice versa. In fact, it is much like emailing, except that bitcoin addresses should only be used once.

Levels - Block Chain

The Block Chain is a general office shared by the entire Bitcoin network. All confirmed transactions are included in the block chain. In this way, bitcoins can be used to calculate cost-effective levels, and new transactions are validated in the form of costly bitcoins that are actually owned. Integration and timing of the block chain are applied through cryptography.

Transactions - Private keys

A value transfer transaction between Bitcoin bags is included in the block chain. The Bitcoin Money Bags hold a piece of confidential data called the Private Key or Seed that is used to sign transactions, and provides a mathscript that indicates that these transactions have come from the owner of Kiel. This signature also prevents anyone from changing the transaction after it has been issued. All transactions are published among users, and usually within 10 minutes afterwards, the network begins the transaction verification work in a process called extraction.

Processing - Extraction

Extracting a distributed consensus system that is used to validate pending transactions through their inclusion in the block chain. Extraction applies a time sequence to a block chain, protects the neutrality of the network, and allows different computers to agree on the status of the system. Transactions must be categorized into a block that is highly encrypted according to strict rules, to be verified by the network in order to be verified. These rules prevent the blocking of previous blocks, because with this, the subsequent blocks will be invalidated. Extraction also creates something like a competitive lottery so that no one can simply add blocks to the block chain. In this way, nobody will be able to control what is entered into the block chain or to change segments of the block chain to return their spent money.

@haji