– [Narrator] Bitcoin is a digital ledger that records a history of transactions. Like all money it tracks
how value transfers from one party to another. This ledger is not that
different from the one you'll find in your bank statements but instead of this
record being kept by banks it's kept by every single
person who uses Bitcoin. To use Bitcoin you have
to connect your computer to someone else's who's using Bitcoin and download the full
ledger on your hard drive.
This ledger includes a full
history of every Bitcoin that has ever been created or spent. Transactions are grouped
together in blocks that are linked in chronological order. This linking process uses cryptography which ensures that records
can not be changed or deleted once they are added to the ledger. What makes Bitcoin's ledger
different from your bank's is that it's not controlled
by a single entity.
To make a Bitcoin transaction
you just have to add that record to your ledger and
send it to other computers with the ledger. If all the computers add your
transaction to their ledger it becomes valid..
