Bitcoin explained: How do cryptocurrencies work? - BBC News

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when you want to buy something normally using your normal bank card this is what happens I give my card details to the shop the shop asks the bank if I'm good for the money the bank checks its records to see if I've got enough in my account if I do it lets the shop know it updates its records to show the movement of money from my account to the shops and it takes a little bit longer for this trouble now if you wanted to remove the bank from that system who else would you trust to keep those records and not alter them or or cheat in any way I wouldn't trust you trust you in fact I wouldn't trust any single person but I might trust everyone the idea is you don't have a central record of transactions instead you distribute many many copies of this ledger around the world each owner of each copy records every transaction so to buy something using cryptocurrency I give the shop my details the shop asks all the bookkeepers if I'm good for the money the bookkeepers all check their records to see if I have enough if I do they tell the shop and then all update their records to show the movement of money so there's no way that a forged transaction can make it in if I try to alter a ledger it won't match all of the other copies and it gets rejected oh and one of them at random will be given a reward of some newly created cryptocurrency this is how cryptocurrencies work and remember all of these bookkeepers all of these Ledger's they're not actually people they're computers lots of computers
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Channel: BBC News
Views: 501,378
Rating: undefined out of 5
Keywords: bbc, bbc news, news, Bitcoin, Bitcoin explained, cryptocurrencies, How do cryptocurrencies work, bitcoin price, cryptocurrency, bitcoin rates, money, bbc money, bbc business, business news, bbc click
Id: SzAuB2FG79A
Channel Id: undefined
Length: 2min 23sec (143 seconds)
Published: Mon Feb 12 2018
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