How does Bitcoin code work?

An attempt to explain the underlying concept for beginners to understand.


Unlike a traditional banking system or other online currencies such as eg. Paypal there is no central server, which plays a special role. At the technical level, all participants in the Bitcoin code network are organized in a peer-to-peer architecture and full equality.

Also known services such as or (there you can see transactions) play network for the actual Bitcoin code and its functioning is not important. These are nothing but services that have settled around to Bitcoin code. This is often confused. But even if all these would disappear related to Bitcoin code services and websites tomorrow from the Internet (or to be censored would), Bitcoin code would work as before.

In all previous banking and accounting systems, there is a central authority, a database that is stored in that account which has just balance. Now, when users will transfer A money from his bank account to the account of the user B, is reduced in this central dfatabase, the amount the account balance of A and B increased in.

But what is decentralized? If each user would store his account itself, which prevents him to manipulate their own bank balance? This leads us to the next point:

Transactions take account balances

There is no account balances.

Of course, I can use the wallet of my choice or websites like open and see there once the current „balance“ my Bitcoin code address. But not this number, but instead only all transactions between all Bitcoin code addresses that have ever taken place is actually stored in the Bitcoin code network (the so-called „block chain“). Namely public. Since the beginning of Bitcoin code (on 03.01.2009).

Thus, everyone can understand the world, when the amount of money moved by what address to what address. Now if you go through all the transactions from the beginning to this day, you know at the end must be exactly the amount that landed at what address. That’s it. It is determined which address at this moment is what balance. This is what makes each Bitcoin code client. And after all make the world, an individual can not cheat and simply omit some transaction on his own account, or to cheat. Everyone else would see that he cheats. Therefore, the security.

TODO : Possibly Install here is a graph with various account balances of different addresses for multiple transactions.

By comparison, from a purely technical, it would be no problem at a traditional bank to exchange a number to the central booking server and easy to halve the balance in your account. However, trust us that the banks do not. Here is the difference in Bitcoin code you do not trust. You have the security through control.

How to get a Bitcoin code „account number“?

Ok, how do you come because of a Bitcoin code „account“. If there is no central bank or website where I can open me an account, how does that work then?

The answer is quite simple and sounds so simple that it’s the listen for some the first time, sounds too simple in the beginning just to believe:

You just comes up with one.

Ok, so simple is not, but basically it boils down to. To explain but you have to examine this, what because Bitcoin code addresses are actually exactly:

Bitcoin code addresses:

Behind Bitcoin code addresses so as you know, is in reality a pair consisting of two keys:

  • a secret key (the private key ) to only the owner (or its Wallet software) knows. This is required if you want wegüberweisen out Bitcoin codes from an address starting elsewhere. Which one should never tell someone else (such as the watchword of the old passbook).
  • and mathematically to belong to this private key, a public key (the so-called. public key ). So the rest of the world can understand mathematically certain that the author of a transaction in possession of the corresponding private key and thus is entitled.

Two of these keys (secret and public key) belong together always inseparable. So a couple has this ingenious feature is that it can be proved mathematically using the public key that you have the corresponding private key, without having to ever original and the secret key (as opposed to: the watchword of the passbook earlier, you had the / the bank employees say then knew it – that’s just not in Bitcoin code above).

And what is the Bitcoin code address? A Bitcoin code address (for example: 19bLDxjsV63oF14P38LhDZmfKUApNeqFi6 ) is now a specific derivation from the public key. So in principle: one takes the public key forth, converts the a little bit, it is characterized slightly shorter, and Read real reviews from users as a result we obtain the Bitcoin code address (simplified terms).

To summarize, there are also:

  • private key ( which only I know myself )
  • to belong: a public key ( with this I can prove to the world that I possess the secret key )
  • and, in turn belonging to: a public Bitcoin code address ( a shortened / simplified representation of the public key )

If one knows the private key, can it (mathematically) calculate the public key and from the public key, in turn, can calculate the Bitcoin code address.

Private Key Public Key >>> >>> Bitcoin code address

However, only in this direction . The other way you can not. You can not calculate the public key of a Bitcoin code address. And a public key can not the private key can be calculated. This is essential for the security of the entire system.

What is a Private Key?

What exactly, then, this private key from which, ultimately, results in the Bitcoin code address?

It’s simple: a random number from 1 to 115792089237316195423570985008687907853269984665640564039457584007908834671663
(this is the result of 2 256 – 2 32 – 977 and is a prime number)

Just in case you wonder: usually the private key is in Bitcoin code shown in another, slightly shorter notation, this then usually begins with the number „5“ or the letter „K“ or „L“. For example: 5KJvsngHeMpm884wtkJNzQGaCErckhHJBGFsvd3VyK5qMZXj3hS)

The human imagination is doing something difficult english page of the german site with very large numbers. But these numbers are so large that even if since the beginning of the universe one would try try out all the numbers, every second about 269000000000000000000000000000000000000000000000000000000000 numbers (this number is 60 digits long) would have to try to collect all the be today once by , (Again, as many numbers you would have to try out EVERY second since the big bang It is therefore really! Very very very very unlikely – in practical terms, virtually impossible – that two people, if they really randomly select a number from this area, the same secret key choose.)

What does that mean in everyday life?

Do not worry, it all sounds terribly complicated, but as a user of Bitcoin code has just not much to do, even with these details. Once done, the wallet software for one. In the Wallet your Bitcoin code addresses and the corresponding private keys are stored.

So if you already own Bitcoin code and wants to transfer to someone else, you need the recipient only Bitcoin code address (for example: 19bLDxjsV63oF14P38LhDZmfKUApNeqFi6 ). So you do not have to enter this long sausage of numbers and letters manually, mostly QR codes in use today, you can simply scanning with the camera of a smartphone. For example:


Currently being implemented and has other assistive technologies (keyword: Payment Protocol ) which will facilitate a handling this complicated addresses even further.

In addition Bitcoin code addresses include a checksum. This can immediately recognize the wallet software, if you have mistyped one or more characters.

Finally, you click in your own wallet only to “ Send “ and the receiver ( strictly speaking, the entire world ) is within a few seconds that this transaction in the Bitcoin code network is underway. (Order as pizza) for smaller amounts everyday shopping ranges that usually already made to trust that payment has been made.

That’s it! :-)

Additional information:

Ok, granted, of course, that’s not quite everything.

In order for a transaction is also anchored truly irreversible worldwide in the block chain (in particular to ensure that no two conflicting transactions sends to the network, the 2x the same money sent to different destinations – so Bitcoin codes spends twice -. So-called „double spending“ ) are it in the block chain other mechanisms that ensure this security, without having to rely on central control instances.

The basic question like new scooped Bitcoin code be circulated is regulated there. Learn more in the following article: Mining & Co: How does the block chain?