Bitcoin wallet operates on a peer-to-peer network. The software was first designed in the year 2008 and 2009 by Satoshi Nakamoto. Prior to the invention of bit coins, satoshi nakamoto had no identity. His work was influenced by politics, people claim. It is also known as crypto currency. It is stored in a digitalized wallet and is protected by password. The network needs minimal structure to share the transactions. Nodes can join and leave at their will. After reconnecting, a node downloads and verifies new blocks from other node/nodes so that it could complete the local copy of its block chain.
The first bit coin wallet transaction that is made in a particular block which produces new coins is generally owned by the creator with bitcoin exchange. The nodes support the network thus, and help to distribute the coins and circulate them since there is no government or authority issuing them. When the output value is less than input value, the negative difference is added to the incentive value of the block. A user having Bitcoin wallet should always keep a copy of the block headers which are available by the queering networks. So that he could verify whenever required. The protection provided is high. The procedure followed
- New transactions get broadcasted to various nodes.
- Nodes collect transactions to a block.
- Node broadcasts the block to nodes.
- Nodes accept block after judging the transactions.
- Nodes go to the next block chain and repeats.
This technology is fresh and will gain acceptance worldwide very soon.