Bitcoin transactions occur between electronic Bitcoin wallets, and are digitally verified and signed for security. Thanks to the massive public ledger called the blockchain, users are aware of all transactions, and its history and when Bitcoin were generated can be tracked.
If you send some bitcoins to, say, a friend, that transaction will have three pieces of information:
- The amount of Bitcoin you wish to send.
- The recipient’s wallet address, generated randomly and consisting of a sequence of letters and numbers – this is where you’ll be sending your funds.
- A private key, which is also a unique sequence of numbers and letters exclusively available to you. This key will allow you to access your wallet.
Once a transaction is set up, it makes its way into the Bitcoin network where it awaits verification. Through the process of mining, miners use software to solve mathematical problems. Once completed, the transaction successfully moves into a public digital ledger called Blockchain.
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.