Bitcoin trading principles

Bitcoin transactions follow the following six steps: initiate transaction, broadcast transaction, verify transaction, block packaging, confirm transaction, and bookkeeping. These transactions are built on decentralized blockchain technology, ensuring that transactions are anonymous, secure, global, and not controlled by any central agency.

Bitcoin trading principle

Bitcoin is a decentralized digital currency whose trading principle is based on Blockchain technology.

1. Initiate a transaction
When a user initiates a Bitcoin transaction, a transaction record is created containing the following information:

• Sender Bitcoin address
• Receiver’s Bitcoin address
• Transfer amount
• Transaction fee

2. Broadcast transaction
Transaction records will be broadcast to all nodes on the Bitcoin network. Nodes verify transactions to ensure they are legitimate and that there are no double-spend issues (the same Bitcoin is reused in different transactions).

3. Verify transaction
The node will verify the transaction according to the following rules:

• The sender has sufficient Bitcoin balance
• The transaction fee meets the network requirements
• The transaction signature is valid

4. Block packaging
Transactions that pass verification will be packaged into a block. When a block is created, it is broadcast to the network.

5. Confirm the transaction
After the block is verified and accepted by the nodes in the network, the transaction will be confirmed. Generally, 6 confirmations are considered irreversible.

6. Accounting
Confirmed transactions will be added to the blockchain for permanent accounting. The blockchain is a public and immutable record of all Bitcoin transactions.

Features:

• Decentralization: Bitcoin transactions are not controlled by any central agency or bank.
• Anonymity: Users can transact via Bitcoin addresses without providing personally identifiable information.
• Security: Blockchain technology ensures that Bitcoin transactions cannot be tampered with and cannot be double spent.
• Global: Bitcoin transactions are not restricted by geographical location and can be conducted anywhere in the world.

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