First, what exactly is Bitcoin? Wikipedia describes it as a electronic currency that is managed and issued via the Internet. In simple terms, it’s “virtual money” that is transferred via the Internet between users. In the terms of a layman, it is “online currency”. It is best to explain it by saying that you don’t need to deal with a government or financial institution when you make an internet transaction. Instead of dealing directly with them, you can exchange money online and there is no third party.

To begin , let us take a look at how a typical “real world” wallet works. You transfer money from your “real life” account to your bitcoin wallet. This is essentially transferring money from your wallet to the wallet of the recipient. You don’t have to go through any intermediaries, which makes the process easier and quicker. An example transaction would be: You give me my email address, I send you your number, and you give me your email address. So, what’s happening is that we are exchanging something (your email address) for a thing (your phone number).

Let’s look at how something like the real world currency functions. Let’s say that I’m looking to purchase a cup of coffee because I am in town for a meeting. To make the purchase I’d first need to open an account at the local coffee shop. At that point I could put off my coffee until I reach my appointment and then I would pay for my coffee using my bank account in the real world.

Let’s say I’m going to a location that is not connected to a traditional banking system like London. What should I do? Simple, because the bitcoin network acts as an electronic currency, I can purchase my fuel using any digital currency I prefer. If I wish to travel to London using the pound I can do so using the Euro or the USD. This is the great thing about it. While it could have a higher rate of exchange, there is no central government that can regulate these currencies. It acts as a solid currency since there aren’t any threats to it.

What happens between all these transactions? The transaction is actually performed between all the entities involved in the transaction, also known as “miners”. These entities are the ones that keep everything running smoothly. The “mining” process is what makes transactions go through and also what ensures the security of the entire network. This is achieved by inviting individuals to join the bitcoin mining pool. They pool their resources and improve the speed at the that new blocks are mined.

Now that we know what happens behind the scenes, how can one determine if one is being “minted” or whether their transactions are tracked? There’s a brand new technology being developed known as “blockchain technology” that aims to make the entire mining process transparent. It works this way when someone creates a block, they add it to the existing ledger, referred to as the “blockchain” along with any other transactions performed during that period of time. Each transaction is tracked and recorded to the computer system for the specific ledger. This lets you be able to see in a glance the amount of money that someone has been minting and the amount they’ve spent.

While this may sound fantastic in theory, there is one issue that everyone must be aware of. Since there’s no physical product, there is no way for anyone to actually look into a person’s transaction history. They may report suspicious transactions, however, it’s impossible to verify whether the transaction is legitimate or not. The only way users can protect their transactions is by performing their transactions using an offline computer, similar to an offline paper wallet. There are even some online websites that will do this for you, in case you don’t wish to make your transaction via the internet.

The new bitcoin transaction system enables people to trace their transactions using the protocol. This makes it nearly impossible for anyone to duplicate spend or alter someone else’s transactions without being noticed. This new technology is not compatible with all computers, which means that some of the biggest names in the field aren’t getting the opportunity to make the leap to the next era of computing power. However, there are a lot of developers developing software that will allow even the most basic computers access the network. When the protocols are accessible to the general public it will be simpler for people to transfer their cash from one wallet to another and also utilize their computing power to drive around the globe using bitcoins instead of traditional currencies.

know more about bitcoin pro here.