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How do Bitcoin wallets work? Explained with examples

By Admin | Bitcoin News

Feb 08

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How do bitcoin wallets work? This is the question which is asked by people who are new to the world of crypto currencies. Before going into the bitcoin wallet let us first understand the need of crypto currencies and its advantage. Carrying cash in the wallet and making payment through cash is becoming neglected necessity and distant past after the introduction of digital payments. People these day showcase to make payments through online money transfers, credit and debit card. The latest addition in digital payment is crypto currencies. Crypto currencies are not new to this world since it is already popular in developing and developed countries. Several countries including US have made crypto currencies as legal tender.

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Even though there are lots of digital currencies which are gaining momentum nothing is as popular as Bitcoin which was supposed to be the first digital currency in the world. How do bitcoin wallets work? Anyone who has internet connection in his home or office can register on the reputed merchant website which buy and sell bitcoin and start their bitcoin transactions immediately after the registration process is complete. The moment the registration concludes successfully the wallet will be created for the member and all the transactions will be stored in this wallet as block chain which is nothing but a public ledger. Unlike banks or other financial institutions the receipts and payments are not stored in the passbook but it is stored as block chain in cryptographic format. Let us assume: A who has bitcoin in his wallet makes a payment to B using bitcoin. The moment A makes payment the transaction will be encrypted in block chain which cannot be erased by anyone. This is a validated payment and no one can alter the algorithm used.

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People can transact safely using bitcoin

People often think that bitcoin blockchain technology was introduced recently which is only a wild imagination. The reality it is a combination of various technologies like the internet, private key cryptography and protocol. In bitcoin blockchain technology the recordings of all transaction takes place in blockchain format which is written in cryptographic language. There are videos, tutorials and other tools on this site which explains the concept of blockchain wonderfully and visitors will get updated info when they explore them. Even though bitcoin comes with lots of advantage there are also many disadvantages.

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People who open an account in mobile platforms or in desktop PCs should show caution while using these coins since hackers may swipe the money without any warning signs. Several people including corporate houses have lost millions of money when they made payment using bitcoins and other crypto currencies which are popular in the online market. Visitors should explore the terms and conditions and risk involved in online digital transactons before buying or selling crypto currencies. But all said and done crypto currencies have become international hit and thousands of online traders are showcasing interest to use crypto currencies which are popular everywhere. Millions of online traders in Japan and other eastern countries are buying bitcoins from the customers.

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