To help you understand how Bitcoin works, I have developed a simple Bitcoin Simulator that lets you simulate trading Bitcoins. With Bitcoin, there is no central bank or clearing house for transactions. Instead transactions are recorded to a ledger called the Blockchain.
(Note: Please wait a couple of seconds while the server starts) A transaction consists of one person sending coins ("From") to another person ("To"). Instead of actual names, a string of letters and numbers is used called a public key. To determine your balance of bitcoins, you add up all the bitcoins that you have received and subtract the bitcoins that you have spent. As long as everyone is looking at the same ledger (blockchain), there is no disagreement on how many bitcoins each person has.
(Note: Please wait a couple of seconds while the server starts) A transaction consists of one person sending coins ("From") to another person ("To"). Instead of actual names, a string of letters and numbers is used called a public key. To determine your balance of bitcoins, you add up all the bitcoins that you have received and subtract the bitcoins that you have spent. As long as everyone is looking at the same ledger (blockchain), there is no disagreement on how many bitcoins each person has.
You can try it out for yourself now. Pretend that you are Alice or Bob and enter the amount of bitcoins that you want to send and then click "Send Bitcoins Now!"
You may have noticed that you can spend more bitcoins than have been sent to you. In a future article, I will show how miners detect this type of activity as well as explain how the ledger (blockchain) works.
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