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Bitcoin Is A Ledger Not Cash
- Cryptocurrency is a shared digital record of transactions, not physical coins you hold.
- Ownership means transaction records terminating at your wallet address, so "having 7 BTC" is having ledger entries pointing to you.
How Blockchain Verifies Transactions
- Blockchain groups verified transactions into time-limited blocks and links them sequentially into a public chain.
- Miners solve difficult math problems (~10 minutes per block) to verify a block and earn newly generated bitcoins as a reward.
Require Confirmations To Avoid Double Spend
- Wait for transaction verification before accepting large Bitcoin payments to avoid double-spend risk.
- Merchants typically require block confirmation because unverified transactions can be spent again until a block confirms them.