Template:MainPage FAQ: Difference between revisions
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link to wikipedia 'public-key cryptography' page; clarify which private key is used |
link to Network article |
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'''Q. What is Bitcoin?''' | '''Q. What is Bitcoin?''' | ||
A. Bitcoin is a peer-to-peer currency. Peer-to-peer means that no central authority issues new money or tracks transactions. These tasks are managed collectively by the network. | A. Bitcoin is a peer-to-peer currency. Peer-to-peer means that no central authority issues new money or tracks transactions. These tasks are managed collectively by the [[network]]. | ||
'''Q. How does Bitcoin work?''' | '''Q. How does Bitcoin work?''' | ||
Revision as of 23:28, 2 March 2011
Q. What is Bitcoin?
A. Bitcoin is a peer-to-peer currency. Peer-to-peer means that no central authority issues new money or tracks transactions. These tasks are managed collectively by the network.
Q. How does Bitcoin work?
A. Bitcoin utilises public-key cryptography. A coin contains the owner's public key. When a coin is transferred from user A to user B, A adds B’s public key to the coin, and the coin is signed using A's private key. B now owns the coin and can transfer it further. A is prevented from transferring the already spent coin to other users because a public list of all previous transactions is collectively maintained by the network. Before each transaction the coin’s validity will be checked.