The Basics of Bitcoin Transactions

Dealing with cryptocurrency, few people understand how transactions between the wallets are actually done. Some are surprised to discover that there is no actually bitcoin in your wallet. It just includes the bitcoin address that records the transactions and balance of the wallet. The address of the bitcoin wallet is a public key. It consists of 34 characters and can be known to any person. There is also a private key that includes 64 characters in length and it is mathematically related to the public key. It is of utmost importance to keep it secret as it is used to sign the transactions. Once it becomes known to somebody else, your wallet is no longer safe. The details of the deal (the agreed amount and the recipient) are placed into the special software on the device. In the course of this procedure the software generates a digital signature for you. You need to enter the figures of the private key to confirm the deal but the transaction requires network to become valid.

The network verifies the signature and other details of transaction with help of bitcoin program and then confirms it. This procedure is the essence of the crypto technology that makes it so successful. The software is able to check the details without seeing the private key. In this way it is able to validate the transaction safely. The software looks through the address history to determine if the bitcoin haven’t been sent already to some person. The address of bitcoin wallet (public key) allows others to do it. All transactions are available on the ledger and can easily be tracked.