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Saivann 2013-04-19 02:07:15 -04:00
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@ -14,13 +14,13 @@ title: How does Bitcoin work? - Bitcoin
<p><br><img src="/en/img/bitcoin_at_a_glance.svg" alt="Bitcoin overview" /></p>
<h2>Block chain</h2>
<h2>Balances<a class="titlelight"> - block chain</a></h2>
<p>The block chain is a <b>shared public transaction log</b> on which the entire Bitcoin network relies. All confirmed transactions are included in the block chain with no exception. This way, new transactions can be verified to be spending bitcoins that are actually owned by the spender. The integrity and the chronological order of the block chain are enforced with <a href="/en/vocabulary#cryptography">cryptography</a>.</p>
<h2>Transaction</h2>
<h2>Transactions<a class="titlelight"> - private keys</a></h2>
<p>A transaction is <b>a transfer of value between Bitcoin addresses</b> that gets included in the block chain. Bitcoin wallets keep a secret piece of data called a <a href="/en/vocabulary#private-key"><i>private key</i></a> for each Bitcoin address. Private keys are used to sign transactions, providing a mathematical proof that they come from the owner of the addresses. The <a href="/en/vocabulary#signature"><i>signature</i></a> also prevents the transaction from being altered by anybody once it has been issued. All transactions are broadcast between users and confirmed by the network in the following minutes, through a process called <a href="/en/vocabulary#mining"><i>mining</i></a>.</p>
<h2>Mining</h2>
<h2>Processing<a class="titlelight"> - mining</a></h2>
<p>Mining is a <b>distributed consensus system</b> that is used to <a href="/en/vocabulary#confirmation"><i>confirm</i></a> waiting transactions by including them in the block chain. It enforces a chronological order in the block chain, protects the neutrality of the network, and allows different computers to agree on the state of the system. To be confirmed, transactions must be packed in a <a href="/en/vocabulary#block"><i>block</i></a> that fits very strict cryptographic rules that will be verified by the network. These rules prevent previous block from being modified because doing so would invalidate all following blocks. Mining also creates the equivalent of a competitive lottery that prevents any individual from easily adding new blocks consecutively in the block chain. This way, no individuals can control what is included in the block chain or replace parts of the block chain to roll back their own spends.</p>
<h2>Going down the rabbit hole</h2>