Introduction to Bitcoin
Bitcoin is a digital currency that has no control over people; Bitcoins are not printed like euros or dollars but are created by people across businesses to simplify the mode of payments. Bitcoin concept is easy to understand, all you need to do is to open your Bitcoin wallet on your system just like any other email account and share the details with your family and friends for money transactions.
Tracking your Bitcoin network
All the transactions can be tracked on your Bitcoin network along with tracking the pending transactions in the block chain. Cryptography enforces the integrity and chronological order of the blockchain to provide you with an ease of using the platform.
Transactions and the private keys for a secured network
A mathematical proof procedure is adopted during transactions between Bitcoin wallets that are fetched into the blockchain known as a private key. The transactions are kept confidential in the interest of the user. Through a process called mining, the system is kept confidential and is available at the fingertips of the user. The mining process follows a strict chronological order rule to protect the network and transaction system. A miner is also called as an umpire to judge all legality and transaction issues to benefit your transactions to be safe and genuine.
The Bitcoin process follows three important functions, they are:
- Transaction input i.e. the account money has been sent
- Transaction output i.e. the account money has been sent to and;
- The note of actual amount that was sent to the account
An address is generated automatically when you send money to the recipient and that address can be used as a reference for the proof purpose. Users can keep a track of all transactions from start and can view the history of their Bitcoin transactions that make it a transparent system.
You can also send a small amount of Bitcoin to an account, and that is called as Satoshi. The smallest transaction value is 5,340 satoshis and is very small.
These Bitcoin transactions have a fee to it, if the fee is not paid then the transaction is not guaranteed.Government agencies are of a fear that Bitcoin can be used as an instrument to fuel money laundering which is a threat to the entire ecosystem.
There several regulators who govern the Bitcoin system - In the US, the Financial Crimes Enforcement Network (FinCEN), The US Commodity Futures Trading Commission (CTFC), The US Securities and Exchange Commission (SEC), each U.S. state its own financial laws to regulate the Bitcoin transactions.
To summarize a Bitcoin transaction is just like another financial transaction made through debit or credit card or even through PayPal account that keeps a track of your fund movements that keeps updating your blockchain to record all your transactions.