How is Bitcoin stored and secured?

Bitcoin is stored in digital wallets, which are often referred to as “addresses” or “accounts”. These wallets are created by the user and can be stored on the user’s computer, an online service, or a hardware device.

Wallets hold the cryptographic keys that let the user access and spend their Bitcoin. These keys are stored in a file or database on the user’s computer. A private key is a long string of randomly generated numbers and letters that allows the user to spend their Bitcoin. A public key is an address that anyone can use to send Bitcoin to the user’s wallet.

Bitcoin is secured by a public-key cryptography system. When someone wants to send Bitcoin to a user, they need to generate a digital signature using the user’s public key. This signature is then broadcast over the network and everyone can validate the authenticity of the transaction.

Bitcoin is secured by a consensus system known as proof-of-work. This system requires miners to do a lot of computational work in order to add new blocks of transactions to the blockchain. This makes it difficult for malicious users to add invalid transactions to the blockchain.

Bitcoin is also secured by a decentralized network of computers. This network prevents a single user from controlling the Bitcoin network or manipulating its transactions. The decentralized nature of the network makes it extremely difficult to hack or attack the Bitcoin network.