Bitcoin: How Does It Work?

By Mahima December 19, 2023

Bitcoin is a decentralized digital currency that is exchanged between two parties without involving intermediaries.

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As defined in a whitepaper released by Bitcoin's secret inventor, Satoshi Nakamoto, Bitcoin is a purely peer-to-peer version of electronic cash.

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It allows online payments to be made directly from one party to another without going through a financial institution.

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To understand Bitcoin, one needs to understand the underlying structure, the way the Bitcoin ecosystem operates and the extent of its use in India.

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How does Bitcoin work?

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Currently if you need to transfer money to someone, one of the possible methods is to give cash or alternatively use a trusted intermediary.

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Both mechanisms, be it physical cash or electronic transfers, involve an intermediary. When intermediaries are involved, there are transaction costs.

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This cryptographic trust program is built into Bitcoin through a wallet, a public key, and a private key.

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Who Can Create

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