Bitcoin in a nutshell.
How does bitcoin work?
Let’s take a look at the simple process flow below.
Bitcoin- each coin is unique with it’s own form of identification. A bitcoin to it’s owner needs to be stored in a wallet. Therefore you would need a wallet.
A wallet- is unique in security to ensure your bitcoin is safe.
Miners- play a crucial role in the integrity of the bitcoin. Apart from miners doing mining of bitcoin by solving mathematical equations. They also have visibility in all sequential bitcoin transactions. To describe it is like having a ledger at hand. Now imagine thousands of miners spread across the globe. Miners can be you or me if you choose to one.
Blockchain-it has been mentioned above uses ledger and this common ledger is called the blockchain. The block chain has 2 main interests for the miners.
- It stores the sequential transactions and awards the bitcoins for miners.
- It governs the set of rules to keep the integrity of the bitcoin.