Bitcoin’s ledger uses a model called UTXO, which stands for Unspent Transaction Output. What that means is that every transaction on the Bitcoin blockchain is a reference to one that came before, and anything unspent from the previous transaction (not sent to a new recipient) is sent back to the sender as change. The Bitcoin blockchain doesn’t track the balance of an account, it just tracks transactions, and builds new transactions from old ones.
Now that you have a wallet setup you’re going to need to actually get some bitcoins into it. There are many ways to purchase bitcoins, but none are as easy as could be hoped. There is no website you can go to and use your credit card and immediately get some bitcoins in return at market value (which is whatever Bitcoin is selling for on the exchanges). If you want to buy bitcoins cheaply (or at least, at the fair market value), you’ll have to use one of the currency exchanges.
Bitcoin is an incredibly well thought out system, but understanding it all can feel overwhelming at first. This post covers what’s going on under the hood every step of the way, from creating a wallet to sending bitcoins. Creating a Wallet When you create a wallet, a new Bitcoin address and key pair are created automatically for you. Every Bitcoin wallet has one or more Bitcoin addresses associated with it, and every address has a set of cryptographic keys that allow a user to create transactions related to that address.
Bitcoin Desktop Wallets Your first step to getting into Bitcoin is to create a wallet. In Bitcoin terms, a wallet is comprised of a Bitcoin address and a set of cryptographic keys that allows the holder to create transactions for that address. As a reminder, a Bitcoin address looks something like this: 19QhXjxBytWXQEaqvu7GRR7JhnfTG9UWiY When you want to receive bitcoins you’ll need to provide your unique address to the sender, just like you’d provide your address to someone sending your mail.
A Man Named Satoshi On Halloween night, 2008, a short message was posted to a small cryptography e-mail list announcing a paper describing a new form of digital currency that the author, Satoshi Nakamoto, dubbed Bitcoin. Nakamoto had never posted to the list before and was unknown to the rest of the group. If you’re interested in the technical details of Bitcoin, the paper that was released is concise and relatively clear.
Introduction In April of 1933, at the height of the Great Depression and in order to induce economic growth by increasing the amount of money available for lending, the U.S. President Franklin D. Roosevelt issued Executive Order 6102, “forbidding the Hoarding of Gold Coin, Gold Bullion, and Gold Certificates within the continental United States”. This Order stated, essentially, that no one person could own more than $100 worth of gold.
Introduction Bitcoin Beginner started in 2013, which is pre-historic in the world of cryptocurrencies. Originally published as a book meant to introduce the world to Bitcoin, it discussed both the technical aspects of Bitcoin, such as what a blockchain is and how cryptocurrencies allow for private and secure transactions, along with practical aspects, such as how to buy Bitcoin. While the core technology that powers Bitcoin hasn’t changed, almost everything in the practical section has.