How bitcoin transactions work | Learn all about BTC | Get Started with Bitcoin.com (2024)

FAQs

How bitcoin transactions work | Learn all about BTC | Get Started with Bitcoin.com? ›

We define a bitcoin as a chain of digital signatures. Each owner transfers bitcoin to the next by digitally signing a hash of the previous transaction and the public key of the next owner and adding these to the end of the coin. A payee can verify the signatures to verify the chain of ownership.

A bitcoin, at its core, is a token representing value. The token is digital (or virtual), and your public key is used to assign it to you. Ownership is transferred when transactions are made to another person's public key. You use your wallet, the mobile application, to send or receive bitcoin.

On 22 May 2010, Laszlo Hanyecz made the first real-world transaction by buying two pizzas in Jacksonville, Florida, for 10,000 BTC, an amount that would surpass $600 million if held in April 2021. Bitcoin takes parity with US dollar.

Based on a free market ideology, bitcoin was invented in 2008 by Satoshi Nakamoto, an unknown person. Use of bitcoin as a currency began in 2009, with the release of its open-source implementation. In 2021, El Salvador adopted it as legal tender.

You can buy Bitcoin in the Bitcoin.com Wallet app in a few taps. Pay with credit card, bank transfer, or payment app and receive Bitcoin directly in your self-custody wallet. Bitcoin can also be purchased directly on this page and sent to the Bitcoin wallet of your choice.

We define a bitcoin as a chain of digital signatures. Each owner transfers bitcoin to the next by digitally signing a hash of the previous transaction and the public key of the next owner and adding these to the end of the coin. A payee can verify the signatures to verify the chain of ownership.

Most cryptocurrency exchanges charge between 0% and 1.5% per trade, depending on whether you're a maker (buyer) or taker (seller). That means that if you've dedicated $1,000 to invest in crypto, the fee you'll pay for that transaction, on average, could be anywhere from $0 to $15.

Bitcoin runs on a decentralized computer network or distributed ledger that tracks transactions in the cryptocurrency. When computers on the network verify and process transactions, new bitcoins are created, or mined. These networked computers, or miners, process the transaction in exchange for a payment in Bitcoin.

Who controls Bitcoin? ›

Bitcoin is not controlled by any single group or person. Instead, it is governed by multiple stakeholders — including developers, miners, and users. Developers write the code that makes Bitcoin run; miners validate transactions; and users put the software to work by trading, transacting, holding, and more.

Satoshi Nakamoto is the name used by the presumed pseudonymous person or persons who developed Bitcoin, authored the Bitcoin white paper, and created and deployed Bitcoin's original reference implementation. As part of the implementation, Nakamoto also devised the first blockchain database.

Selling Bitcoin Cash with the Bitcoin.com Wallet app

With this method, if you're in a supported region, you can sell any amount of Bitcoin Cash (BCH) in your Wallet directly to cash. The cash will then be deposited in your bank account. Here's how it works: On the app's home screen, tap the "SELL" button.

Open the wallet app and, after importing your cryptocurrency, select the 'sell' option. Choose the amount of cryptocurrency to sell. Confirm the transaction and transfer funds to your linked bank account.

Open your Bitcoin.com wallet app and tap the 'Receive' button at the top of the Home screen. Choose which wallet you want to receive Bitcoin. Make sure you select a (BCH) wallet if you are receiving Bitcoin Cash or a (BTC) wallet if you are receiving Bitcoin.

However, it's still possible to make money with Bitcoin. You can trade it, lend it, hold it or earn it. Returns aren't guaranteed on this volatile asset; just as you can make money as the price goes up, it's also possible you could lose money if the price goes down.