How Bitcoin Works
Think about how you know your bank balance is correct. You trust your bank to keep an accurate ledger. But what if 10,000 independent computers all kept the same ledger, constantly checking each other, and any attempt to cheat would be immediately detected and rejected? You would not need to trust any single one of them. That is Bitcoin.
Imagine a shared Google spreadsheet that everyone can read, but no one can secretly edit. That's Bitcoin's blockchain - a public ledger where every transaction is recorded and verified by thousands of computers worldwide.
Key components:
1. Transactions: Digital transfers of Bitcoin between wallets 2. Blocks: Groups of transactions bundled together 3. Mining: The process of validating and adding blocks 4. Nodes: Computers that maintain copies of the blockchain
In 2013, the government of Cyprus seized up to 47.5% of bank deposits over 100,000 euros to bail out its banking system. Account holders woke up to find their savings had been confiscated. With Bitcoin, no government can reach into your wallet — because there is no central ledger they can edit.
Bitcoin replaces trust in institutions with verification by mathematics. You do not need to trust your bank, your government, or any company. You can verify everything yourself by running a node.
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