Bitcoin Course Online, Cryptocurrency Technologies - 2 : How does Bitcoin work ?

Well, I've grabbed some information & images regarding topic, "how do bitcoin work?". I've tried to make it clear on a very simple way. I want readers to understand this part clearly. So, there are no any edits from my side in this article. I've just collected most of the information and various source and finally given some links too. So, that you can find out more info on this topic.
img src - https://goo.gl/RGuFqo
- User installs Bitcoin Wallet in PC or Smartphones.
- User will get First Bitcoin Address (Later on, can be created more).
- These address can be shared with friends or any required circle of your own to send money and vice versa.

img src - https://goo.gl/UWcVSc


Balances - block chain
The block chain is a shared public ledger on which the entire Bitcoin network relies. All confirmed transactions are included in the block chain. This way, Bitcoin wallets can calculate their spendable balance and new transactions can be verified to be spending bitcoins that are actually owned by the spender. The integrity and the chronological order of the block chain are enforced with cryptography.
"via : https://bitcoin.org/en/how-it-works"

Transactions - private keys
A transaction is a transfer of value between Bitcoin wallets that gets included in the block chain. Bitcoin wallets keep a secret piece of data called a private key or seed, which is used to sign transactions, providing a mathematical proof that they have come from the owner of the wallet. The signature also prevents the transaction from being altered by anybody once it has been issued. All transactions are broadcast between users and usually begin to be confirmed by the network in the following 10 minutes, through a process called mining.
"via : https://bitcoin.org/en/how-it-works"

Processing - mining
Mining is a distributed consensus system that is used to confirm waiting transactions by including them in the block chain. It enforces a chronological order in the block chain, protects the neutrality of the network, and allows different computers to agree on the state of the system. To be confirmed, transactions must be packed in a block that fits very strict cryptographic rules that will be verified by the network. These rules prevent previous blocks from being modified because doing so would invalidate all following blocks. Mining also creates the equivalent of a competitive lottery that prevents any individual from easily adding new blocks consecutively in the block chain. This way, no individuals can control what is included in the block chain or replace parts of the block chain to roll back their own spends.
"via : https://bitcoin.org/en/how-it-works"



Read original paper for this section here

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