Like most computer systems and software, a lot of people are finding the concept a little hard to grasp.
The basics of Bitcoin
The getting started with Bitcoin is actually the easy part and can be done without anyone understanding even the basics of the concept. In our understanding Bitcoin is like an emailing system but instead of messages, you are sending a form of cyber currency. An unlike normal email addresses you can only, or rather should only, use a bitcoin address once.
You first have to choose how you want to create your Bitcoin wallet.
- Desktop – download the software to your pc or laptop, the system caters for Linus, Windows and Mac formats
- Mobile devices – from an app store you can download the version that suits your device, the supported systems being Android, Blackberry, IOS and Windows Phone formats
- Or you can create a Web wallet
Once installed on the device of your choice you will get your first Bitcoin address generated, if you need more you can create them as and when required. This is the address you disclose to whomever you wish to make a payment to or get a payment from. These addresses should only ever be used once.
The Block Chain is a public ledger that is shared and is what the Bitcoin network is reliant upon to function. This block chain has every single confirmed transaction logged in it. This enables all Bitcoin wallet to be able to know their spendable balances and verify new transactions.
This is a system used to verify transaction that is waiting to be processed and includes them in the block chain, it also enforces a chronological order in the block. Very strict cryptography rules prevent blocks from being changed.
Private keys (Transactions)
Values transferred between Bitcoins wallet is a transaction and this is included in the block chain. Each wallet keeps a “private key” this is the signature the transaction is signed with to provide evidence of the transaction and the origin of it. The signature is also what stops the transaction being altered by anyone once it has been sent through. Proof of transactions is sent to both parties and are usually confirmed within a time frame of about ten minutes and this is done via the mining process!
The best way to get acquainted with Bitcoin is to actually install it and try it. Once you have gone through a transaction or two, the basics of how it works will fall into place.