Understanding bitcoin transactions
Download as ODP, PDF0 likes623 views
Bitcoin transactions involve digital exchanges secured by public and private keys, with the public key facilitating transfers and the private key unlocking them. Transactions require multiple verifications, currently set at six, before a new block is formed in the blockchain. This process includes hash creation and the continual addition of data to ensure the authenticity of each block, which becomes timestamped and permanently recorded in the blockchain.
Understanding bitcoin transactions
- 2. Bitcoins are exchanged and transferred digitally through a computer generated code. To ensure that these transactions are completed safely and securely users use keys.
- 3. Two keys are always required for any transaction: 1. Public Key 2. Private Key
- 4. The public key is the one that is used for the actual transfer of the Bitcoin. This first verification step prevents anyone from trying to send the same transaction to two different people at the same time.
- 5. The end user then uses their private key to unlock the transaction, once it has been verified. The Bitcoin then gets deposited into their Wallet. A wallet is simply an online bank account.
- 6. Because the system uses two keys all activity in the network can be easily traced. The process of verification often occurs multiple times before the receiver deposits the Bitcoin.
- 7. How the Blockchain isHow the Blockchain is CreatedCreated It takes several verifications for each transaction to proceed. At this time the current number of verifications required is six. Before a transaction enters into the Blockchain a new block is formed first.
- 8. How the Blockchain isHow the Blockchain is CreatedCreated To create a block a process known as hash creation has to occur. Think of this as small nodes that are attached to a block each time it is verified. The original block gets a little longer.
- 9. How the Blockchain isHow the Blockchain is CreatedCreated As this is all done on via a mathematical software program zeros are added at the beginning of the block. As each new block, verification, is completed more zeros are added on. The largest block is always taken to be the authenticated block.
- 10. How the Blockchain isHow the Blockchain is CreatedCreated Once this verification process has occurred six times this block enters into the BlockChain. As it enters a timestamp is associated with it.
- 11. How the Blockchain isHow the Blockchain is CreatedCreated No records are ever removed from the Blockchain and it will continue to grow in size
- 12. Discover MoreDiscover More Boutthatbitcoin.com