Topic: How does Bitcoin work? - page 2. (Read 620 times)

Bitcoin is not only used in that way, it is also typically used as an asset where you can make and earn profits depending on the market situation. Bitcoin can undergo exchanges with fees if you want to make it into a fiat currency. The only necessary thing for you to have a successful transaction with the use of bitcoin is with the proper use of BTC addresses. The good thing here in btc transactions is that some have the record or you have history of your past transactions so it is not a problem for you. In using bitcoin, you need to improve the security and safety of your wallet or account to prevent losses and prevent sending btc in a wrong addresses.

There are many people who are using bitcoin for some online transactions, maybe online transaction is one of the main purposes of having cryptocurrency, I always see whenever we are talking about the purpose of cryptocurrency, there are many posts saying that this is good for online transaction, well there's no wrong with that because I am also doing that way, an online transaction using bitcoin is much faster and secured compared to fiat currency.

Cryptocurrency is also good for earning money, we have here trading and investing which are so profitable once we are good at it but it doesn't mean that experts for both things are always winning, it is still risky, some experts are just making less the probability of losing your money.

Well, I will not say that I am that so knowledgeable in Cryptoworld...but, I disagree some of your lines about how Bitcoin works, because i did some research. It has a lot of great features that can help us in much easier ways. As I've read all those different opinions here in the thread, I must say that some people here below explained it so well. Perhaps, you got confused about how Bitcoin works, so I suggest, you must read a lot and research more about it.

OP, take a look here: http://learnmeabitcoin.com
I've completed my questions there.

https://en.wikipedia.org/wiki/Virtual_currency

Legally speaking, a virtual currency is a currency not backed by a government, but still used as an actual currency by people. So technically in-game currency isn't a virtual currency in this sense because it's not used outside of a game. But on practice the terms "virtual currency" and "digital currency" are used interchangeably by everyone, including bloggers, government officials and academics, so I wouldn't be too bothered if someone calls Bitcoin a virtual currency.

there is a big difference between "digital" and "virtual".
bitcoin is a "digital" currency or also known as "crypto" currency due to its usage of cryptography.
a virtual currency is virtual, like the currency that you use inside a game for instance.

there are lots of physical stores (aka offline) that also accept bitcoin payments.

no it is not.

you must not create topics like this when you have almost zero understanding of how bitcoin works!

Bitcoin is not only used for transferring money. There are something more about the use of this cryptocurrency in the market. We all know that bitcoin is the most popular and highest price cryptocurrency in the market as of now, there are people who are investing in this coins tom make this as their asset.

This bitcoin can really give you huge profit due to its volatility in the market. You should always monitor its price just by observing the market movement, by that you will not have a hard time manipulating your asset. I know that it is not that easy to hold bitcoin, but it depends on your self if you are disciplined enough and make a transaction depending on your decision making. Bitcoin is not that hard to manipulate, you just need patience to earn profit from it.

I am unsure if PayPal is treated as a bank too, but there are ways you can do transfers with it without fees and instantly. It is pretty common for banks to allow free and instant transfers under specific conditions too, such as the destination account being registered at the same bank.

If by exchange rate savings you mean the rates you get when exchanging fiat to fiat through a bank versus when you buy or sell cryptocurrencies, it is a hit or miss. In order to get a good rate for cryptocurrencies, you generally have to use centralized platforms so this sends us back to what I said in my last reply: Bitcoin is incomparable to centralized ways we currently have.

Peer to peer options exist, but it looks like the market still does not meet enough demand for decentralized options to be viable.


Then I am interested to see what happens to cryptocurrencies when national currencies on blockchain technology that allow free and instant transfers start arriving on the markets.

Bitcoin is used in digital currencies and transactions Digital currencies are in high demand, but Bitcoin is decentralized If centralized controlled by the government no one will be able to use Bitcoin as they wish. Under the control of the government he will set the price as he wishes Bitcoin decentralized prices are not stable so bitcoin investment is able to give us more profit.

It's quite rare to have banks doing international bank transfers without fees in terms of the exchange rate and stuff. Bitcoin does offer a lot more advantage for it's fees and the exchange rate savings. It's pretty uncommon to see those transfers being done in 10-30 minutes either.

I agree that it's not the best for cryptos in general to be promoted this way but its really the main thing the general public cares about.

My bank allows me to transfer to other accounts instantly with zero fees. Many other banks offer you similar features.

Bitcoin is incomparable to centralized ways we currently have and one can assume that any new national digital currency will take Bitcoin over when it comes to aspects centralization can improve.

Might not be the wisest idea to keep promoting Bitcoin for fees and speed when national digital currencies show up in the market. Would be a little dead end for Bitcoin at the time and fewer people truly care about decentralized aspects of some cryptocurrencies than many think.

It is a cryptocurrency. Take note that fiat currency can transform into virtual currency with the help of an intermediary such as Paypal or any other cash app.

Err.. nope, they are stored on a public database called blockchain. Your bitcoin wallet only stores the key pair that the wallet generates which is then used to sign your transactions and published it to the bitcoin network.

You may want to review your understanding here -- https://en.bitcoin.it/wiki/Main_Page to avoid misconceptions  

@OP I think that you should end your post here:


And let others answer your question. @TheArchaeologist good job with pointing 3 mistakes in 5 lines of text.


I love this one. Where you take it form?

The poit of this thread is also interresting. @OP do you think that during 11 years of bitcointalk existance no one explained what bitcoin is?

No they are not, transactions are stored on the blockchain. All transactions curretly unspent for which you can produce a valid unlocking script are yours to spend. A wallet keeps a collection of keys you need to unlock those unspent transcations, so no bitcoins themself are stored in a wallet.

You are almost describing a wallet like it is a bank account, where one acccount holder has one account number. This is not the case in bitcoin. See my previous comment about a wallet. One wallet is usually made up by a lot of "addresses". Addresses are not "encrypted", they are an encoded version of the public key (To not further complicate things I'm not talking about addresses which are the representation of the hash of an unlocking script.)

What??? Do you have any idea how many transactions there are in a block in general? This would also mean I could sent you 1 satoshi in a transaction and 1 btc would be genrated out of thin air for the miner :S Anyway, mining is done on a block basis, miners get the block award (currently 6.25 btc) plus all the transaction fees.

There is a lot more of wrong information in your post. It doesn't matter that you don't know these things at the moment but you made it look like you were answering the question of your topic in a way that contains a lot of bogus.

How does Bitcoin work?

Bitcoin is a completely virtual currency. It does not require a bank to transact or save. Although it cannot be touched or touched, its use is similar to that of ordinary coins. Bitcoins are used to purchase products and services online. Many people keep depositing bitcoin in the hope of future price increases. Bitcoin transactions are done through peer-to-peer system. Bitcoins are stored in the user's wallet. Wallets can be both online and offline. Wallet is a kind of personal small database. This database can be stored on computer drives, smartphones, tablets or cloud storage. Various applications have also been created for use as wallets.

Each wallet has a specific address. This address is encrypted. Bitcoin transactions are made by transferring bitcoins from one address to another. Each transaction is recorded in an open ledger called Blockchain. One bitcoin is added to the network after each transaction is completed. This is called bitcoin mining. Blockchain and bitcoin mining are two important issues in the Bitcoin transaction system.