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Just a heads up, why are you guys bumping a dead/old topic from 2011? 
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Topic: How do the wallet, private keys and bitcoins relate to each other? (Read 1460 times)
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January 01, 2023, 09:07:37 AM
I've always felt it makes more sense to call them "Keyrings" instead of "Wallets" (but it's clearly far too late to push for a re-brand by this point). Your wallet software effectively holds keys rather than money. The keys are what give you access to the money.
The money is recorded in terms of inputs and outputs. Inputs are amounts of Bitcoin which are already recorded in the blockchain. Outputs are where you want the spent funds to go. When you combine your private key with valid inputs and outputs, it makes a transaction, which you broadcast to the network. Miners then collate these transactions into a new block, which is appended to the blockchain. Miners also receive a reward or subsidy for doing this work.
The money is recorded in terms of inputs and outputs. Inputs are amounts of Bitcoin which are already recorded in the blockchain. Outputs are where you want the spent funds to go. When you combine your private key with valid inputs and outputs, it makes a transaction, which you broadcast to the network. Miners then collate these transactions into a new block, which is appended to the blockchain. Miners also receive a reward or subsidy for doing this work.
January 01, 2023, 08:19:03 AM
Without any big technical explanations, let's say that you are right about the first part of the post and that Bitcoin is always online (on the blockchain), and whoever owns the private key can make a transaction - that's why the private key is extremely important and sensitive information.
As for blocks, they are generated on average every 10 minutes (it can be 1 min or 1 hour), and the miner who finds and processes such a block will be rewarded with a certain amount of BTC + transaction fees. That reward was initially 50 BTC per block, and it decreases by 50% every approximately 4 years in a process called halving.
Blocks are not destroyed but form a blockchain, so today you can look at every block that was created in the past. See more here -> https://en.bitcoin.it/wiki/Genesis_block
As for blocks, they are generated on average every 10 minutes (it can be 1 min or 1 hour), and the miner who finds and processes such a block will be rewarded with a certain amount of BTC + transaction fees. That reward was initially 50 BTC per block, and it decreases by 50% every approximately 4 years in a process called halving.
Blocks are not destroyed but form a blockchain, so today you can look at every block that was created in the past. See more here -> https://en.bitcoin.it/wiki/Genesis_block
January 01, 2023, 07:41:46 AM
no. it does not scatter. its lock to the wallet.
June 11, 2011, 09:19:11 PM
From what I've read, the bitcoins are stored on the network and assigned a private key which is stored in your local wallet. When you want to spend your bitcoins, you use the private key in your wallet to communicate with the bitcoins on the network. If I got it wrong, let me know. But where do the blocks come in? I know 50 bitcoins are stored in random blocks but once the block is solved, does it get destroyed? Do the bitcoins scatter onto many computers so 5 over here, 10 over there etc etc?
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