This is now a very common term to hear, isn’t it? Especially in the business domain. Virtual currency has begun growing its influence around the world. And so far, there is still a question filled with curiosity as it is confusing to understand how bitcoin works. Do you know? Well, may be or may be not. Even I get a bit confused with its technicalities.
And that’s where I start with the discussion and together, we will try to understand how does bitcoin work.
So, bitcoin is digital cash. But what sort of? They are comprised of a set of computer file. A digital file stored in a digital wallet like quantumai login.
In simple words, like physically you own cash and keep it in your wallet or other storage spaces as well. Similarly, the bitcoin is stored in digital wallets on apps or platforms or hardware storages on smartphones and PCs.
Now, did you get that? The bitcoins are digital savings that you can use only digitally and not physically. So, the working of bitcoin payments is like the traditional payment methods.
Ever done digital transactions through bank accounts or other payment methods such as GPay, Paytm, Amazon Pay, etc. The same bitcoins can be paid or received digitally but there isn’t any mediator such as a bank.
This is direct payment made to people or organizations that has no interference from the banks. That defines the working of bitcoin payments.
Now, let us understand the transactional features and the bitcoin transaction procedure.
Do you know that there are two types of transactions? – the input and the output! That is categorised by the information regarding all the bitcoin transactions made by you or someone else. And it is stored and registered in a register.
What sort of register? A physical notebook sort of? Oh, not at all. It is a completely digital mode of payments and transactions that is physically contactless.
The input transaction i.e., the address from where bitcoin was sent is registered on the blockchain. This blockchain register of the input transaction is highly confidential, encrypted, and inaccessible.
The other one is the bitcoin network where all the addresses and the output transaction details are registered.
That is, if someone has sent you bitcoins then the sender’s details: address and transactions will be registered in the blockchain while the receiver’s address and the output transaction detail i.e., you, will be registered in the bitcoin network.
So ,overall what we got to know is that when you send the bitcoin to someone, transaction output will be generated by your wallet which comprises the address of the person you are sending the coins to. While the transaction input becomes your address that now gets registered on the bitcoin network.
Hey there, now that we have learnt and understood how bitcoin works, the working of bitcoin payments and the bitcoin transaction procedure, it’s time for you to start with the bitcoin business and experience it yourself.
Hope you liked this discussion and understood a good part of things by reading this. If yes, then share this with as many people as you can.