How Does Bitcoin Work? Are thinking of investing in Bitcoin and you want to know how does Bitcoin works?  Exactly the question this article is set to answer. Upon till now it is not everyone still understands what Bitcoin is all about talk less if how Bitcoin works.

Bitcoin is not just the first crypto currency but it’s the popular and best among over 5,000 cryptocurrencies globally today. This is a digital currency that was developed in January 2009. Bitcoin is still striving and increasing in value as the year passes. However, when you know all the intricacies of Bitcoin investment as it can be tricky. Well, let’s see how does Bitcoin works.

How Does Bitcoin Works

How Does Bitcoin Works

What is Bitcoin? like I mentioned previously, Bitcoin is a digital currency that is in exchange for buying and selling without an intermediate bank. Every Bitcoin transaction that has been done since its creation is still intact on a public ledger that anyone may access making it hard for transactions to be reversed and to be fake.

Bitcoin is not supported by any government or any issuing institution and there is no guarantee of its value besides the one in the heart of the system.

Since it came into existence Bitcoin has risen dramatically in value. Although in 2021 March 1, precisely, Bitcoin sold below $150 for each coin, now one Bitcoin sells for about $50,000. Of course, its supply is now limited to 21 million coins. A lot of people expect the price to just continue rising daily as time goes on. Especially, now has giant industry has started showing interest and investors are now seeing it as digital gold to secure themselves against market volatility and inflation.

 How Does Bitcoin Work

Bitcoin is established on a digital record that is distributed known as Blockchain. Blockchain is made up of units known as blocks, it is a linked body of data. The block in the units of Blockchain has vital information about all the transactions including time and date, buyer and seller, total value. Also, it has a unique identifying code for each exchange. All the entries are fixed together in chronological order.

Blockchain is a decentralized system that is not controlled by any organization, it is not owned by anyone but everyone that has a link can contribute to it. As it been updated by different people your copy gets updated too. Although it sounds risky and unsafe that anyone can update the Blockchain, but this makes Bitcoin secure and trustworthy.

However, for a transaction block to be added to the Bitcoin Blockchain, it has to be verified by a lot of Bitcoin holders. Also, the unique codes of users’ wallets and transactions must correspond to the right encryption pattern.

The encryption pattern codes are not simple codes but long, random numbers. This makes it hard for fraudulent activities, they can even guess the private keys of your Bitcoin wallet.

Bitcoin Mining – How Does Bitcoin Works

What is Bitcoin mining? Bitcoin mining is part of how does Bitcoin works. When you mine a Bitcoin it goes into circulation. Ming a Bitcoin is a process of adding a new transaction to the Bitcoin blockchain. It is a tough one though. Those that mine Bitcoin are using a method known as Proof of paper.

It is mathematical, solving of mathematical puzzles by deploying computers into a race. To keep miners racing in solving the puzzle and support the entire system, Bitcoin code rewards miners new Bitcoin. And this is the way new coins are often created and new transactions added to the blockchain.

Before now, it was easy for a normal person to mine bitcoin but now is not that easy. The Bitcoin code is written to make the solving process more difficult and requiring the use of computers. Today, mining Bitcoin you must have computers and access to huge electricity.

Mining Bitcoin before now was more lucrative for miners than now. It is difficult to even regain the cost of expenditures on computers and electricity. According to Flori Marquez, co-founder of BlockFi, a Crypto Wealth Management Company, “In 2009, when Bitcoin first came out every time you mine you get a large amount of Bitcoin than today”.

Now there are more Bitcoin transactions, and this has affected the amount of Bitcoin miners received which is less than previous. It is estimated that in the year 2140, a Bitcoin will be in circulation, which means that mining will release new coins, and then miners will be relying on transaction fees.

How To Use Bitcoin

Generally, people invest in Bitcoin as an alternative investment like in the US. This encourages diversity from stocks and bonds. Also, Bitcoin can be used to buy anything but not all stores or vendors accept cryptocurrency as a form of payment. And the ones that accept it are still small.

However, there are still companies that accept Bitcoin stores like Overstock, AT&T, Twitch, and many others. You need to go on research for those stores and sites that accept Bitcoin as a form of payment. Or services that enable you to use your debit card connect it to your Crypto account. By this, you can use a credit card just like you use a credit card. This means your financial provider instantly should convert your Bitcoin into dollars.

Bitcoin Job Opportunities – How Does Bitcoin Work

Bitcoin job opportunities are for those that are self-employed, they can get a job that pays in Bitcoin. You can create any Internet-related service and add your Bitcoin wallet address to such a site as a form of payment. Online there are various websites and jobs that are digital currencies related.

Coinality (  this site features jobs on a freelance, part-time and full time the offered payment in Bitcoins as well as other cryptocurrencies like Dogecoin, Litecoin.

Bitwage ( They have means of choosing one percentage of your work paycheck, converting it into Bitcoin, and send to your Bitcoin address

Job4Bitcoin ( is part of

Cryptogrind ( This is a site that you see job seekers and prospective employers together.

Types of Bitcoin Investment Risks – How Does Bitcoin Work

A lot of people invest in Bitcoins because of their value and not really as a medium of exchange. Since there is not assured value and that digital nature makes investment in Bitcoins have inherent risk. There are risk alerts by the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), the Consumer Financial Protection Bureau (CFPB), and other agencies. Here are likely risk of investing in Bitcoin:

These are a few risks that are inherent in Bitcoins investment. For further reading visit


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