Q. What is Bitcoin?
A. Bitcoin is a peer-to-peer digital currency. Peer-to-peer (P2P) means that there is no central authority to issue new money or keep track of transactions. Instead, these tasks are managed collectively by the nodes of the network.
Q. How does Bitcoin work?
A. Bitcoin utilizes public/private key digital signatures (ECDSA). 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. The coin is signed using his private key. B owns the coin and can transfer it further. To prevent A from transferring the already used coin to user C, a public list of all previous transactions is collectively maintained by the network of Bitcoin nodes. Before each transaction the coin’s unusedness will be checked.