4. How Bitcoin Works

Now that you know a little bit about the history of Bitcoin, it’s time to delve into the nuts and bolts of the thing and learn how Bitcoin works. We’re talking how Bitcoins are created, traded, stored, kept safe, and so forth.

You might think that sounds like a lot to absorb, and you’re right. Fortunately, you don’t need to understand all the technical details to use Bitcoin. We’ll get into all those technical details in later chapters, but right now let’s take a quick look at what you need to know to get started with Bitcoin—the Bitcoin basics, if you will.

Understanding Bitcoins

Because Bitcoin is a virtual currency, there are no physical Bitcoins—no Bitcoin bills or Bitcoin coins or anything. There aren’t even digital ...

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