Basics for a new user
As a new user, you can start with Bitcoin without understanding the technical details. Once you install a bitcoin wallet on your computer or mobile phone, it will generate your first bitcoin address and you can create new ones whenever you need. You can disclose your addresses to your friends so they can pay you and vice versa. In fact, using Bitcoin is quite similar to exchanging emails, except that Bitcoin addresses should only be used once.
Balances – blockchain
The blockchain is a large shared and public ledger on which the entire Bitcoin network rests. All confirmed transactions are included in the blockchain. In this way, Bitcoin wallets can calculate their balances and it is possible to verify that new transactions spend bitcoins that actually belong to the issuer of the payment. The integrity and chronological order of the blockchain is ensured by cryptographic means.
Transactions – private keys
A transaction is a transfer of value between Bitcoin wallets that is included in the blockchain. Bitcoin wallets store secret information called a private key or seed that is used to sign transactions, providing mathematical proof that they came from the owner of each wallet. The signature also prevents any modification of the transaction after it has been issued. All transactions are broadcast between users and usually begin to be confirmed by the network within 10 minutes by a process called mining.
Processing – mining
Mining is a distributed consensus system that is used to confirm pending transactions by including them in the blockchain. It enforces a chronological order in the blockchain, protects network neutrality, and allows different computers to agree on the state of the system. To be confirmed, transactions must be included in a block which must correspond to very strict cryptographic rules which will be verified by the network. These rules prevent the modification of a previous block because it would invalidate all the following blocks. Mining also induces the equivalent of a competitive lottery that prevents any individual from easily adding blocks consecutively in the blockchain. In this way, no individual can control what is included in the blockchain or replace parts of it to cancel out their own expenses.