How Does Bitcoin Work?. Bitcoin operates on a decentralized… | by Muhammadyayat | The Capital | Jan, 2025

Bitcoin operates on a decentralized system powered by blockchain technology. Here’s a step-by-step explanation of how it works:

At the heart of Bitcoin is a technology called the blockchain, a public ledger that records all Bitcoin transactions. It is:

Decentralized: Stored and maintained across a network of computers (nodes) worldwide.

Transparent: Anyone can view the transaction history.

Immutable: Once a transaction is recorded, it cannot be altered or deleted.

When someone sends Bitcoin, the transaction involves:

Sender’s Private Key: The sender signs the transaction with their private key to prove ownership of the Bitcoin being sent.

Recipient’s Address: Bitcoin is sent to the recipient’s public address, a unique identifier on the blockchain.

Verification: The transaction is broadcast to the Bitcoin network for verification.

Bitcoin transactions are validated and added to the blockchain through a process called mining: