How a Bitcoin Transaction Actually Works

Illustration for article titled How a Bitcoin Transaction Actually Works

At this point, you probably have a working understanding of what bitcoins are (at the very least your handle of bitcoins is like how you can kinda, sorta explain why the sky is blue to a kid). But how does an actual transaction with bitcoins work? That's a bit more complicated. It's not exactly pulling crumpled cash out your pocket and dropping it off at the bodega counter for a soda now is it?

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There are a lot of steps in a bitcoin transactions that involves wallets, addresses, verification, cryptography, a whole lotta computer brain power and a bunch of other terms you don't always equate to spending moolah.

Here's how it works (and you should click Expand to get all the nitty gritty):

Illustration for article titled How a Bitcoin Transaction Actually Works

[ZeroHedge]

DISCUSSION

swingerofbirches
swingerofbirches

Re:

"at the very least your handle of bitcoins is like how you can kinda, sorta explain why the sky is blue to a kid"

Should I be flattered that you think so highly of me or embarrassed that I know nothing about bitcoins (except that some guy I kind of know on Facebook writes a post every day about how they are changing the world and that they are a way to get rich quick) and that when I stopped to think about why the sky is blue I can only take a guess: Something about light refraction? Wavelengths? Water? Reflection?