The developers of Bitcoin designed it to serve as a means of payment and a store of value. However, it is intangible and works on a peer-to-peer network with no third parties.
While the cryptocurrency market includes more than 1000 virtual currencies, Bitcoin is still the largest and most popular. It is increasingly used by many companies and individuals to invest, trade, and pay for goods and services, as Bitcoin guarantees faster, safer, and cheaper payments.
However, the Bank of Thailand said that the central bank does not support the use of digital currencies to make payments, due to their high price volatility and the risk of cyber theft.
Although Bitcoin is still in the early adoption phase, its use has grown exponentially around the world. Several major economic sectors, including real estate, banking, manufacturing, travel, and retail, have embraced it as an asset and method of payment.
Several Thai companies, such as real estate developer SC Assets Plc or retail giant Mall Group, have already announced a partnership with digital asset exchange platforms, such as Zipmex or Bitkub, to allow clients to buy goods using digital assets.
Cryptocurrency exchanges like bitcoinrevolution-fr.com allow investors and individuals to exchange Bitcoins with other currencies and digital assets.
The future looks bright for cryptocurrencies in Thailand after Siam Commercial Bank Pcl, Thailand’s oldest private bank, invested 17.85 billion baht ($ 525 million) to buy 51% of Thailand’s leading digital asset exchange Bitkub. Online Co.
However, most of the people do not understand how Bitcoin transactions work. The following article describes how Bitcoin payments work.
Bitcoin transactions overview
A transaction involves the transfer of the value of Bitcoins from one person to another on the blockchain. This is the process of giving a specific amount of Bitcoins to another user. Transactions appear in messages or emails, digitally signed with cryptographic keys and transmitted over the network for verification and confirmation.
Bitcoin transactions are public and are recorded in a digital ledger, called a blockchain. Transaction history dates back to the time each token was created. Each Bitcoin user has public and private keys, which control their funds. A public key contains a series of letters and numbers that a user must share to receive funds. On the other hand, a private key must remain confidential as it authorizes funds in the user’s wallet.
Users can sign transactions and transfer Bitcoins from their wallets to a new owner using the private key. Anyone with access to a Bitcoin user’s private key has the right to transact through their wallet, including the transfer of all funds. The network then transmits the transaction to minors for confirmation and validation on the blockchain.
The basics of a Bitcoin transaction
A valid Bitcoin transaction has three essential elements: inputs, outputs, and amounts. We will use an example where John sends 0.05 bitcoins to Mary to illustrate how the transactions work.
The entries refer to the Bitcoin address, along with the Bitcoin funds that Jean intends to send to Marie. This is John’s digital wallet from which he will transfer the funds to Mary.
Points of sale are the addresses of recipients to whom users transfer funds. It is the address or public key of Mary that will receive the funds from John.
The amounts refer to the number of Bitcoin tokens that John wants to transfer to Mary.
A Bitcoin transaction can contain multiple inputs and outputs. However, each Bitcoin output must have a designated amount and the total of input amounts must exceed that of Bitcoin’s outputs for a transaction to be considered valid.
John will sign a message containing the details of the transaction to send 0.05 Bitcoin to Mary using her private key. The message contains the three components described above. This broadcasts the transaction over the Bitcoin network so that miners can verify that John’s private key can access the entries. They do this by verifying John’s private key against the given public key.
The miners then organize the transaction in a block model, creating a plan of the block to add to the blockchain. Each block has a limited space that can only hold 1MB of data. The next step is to extract the model to validate it as part of the blockchain. The nodes on the network will finally confirm the transaction and include the data in their copy of the ledger.
Bitcoin miners receive grants to verify and validate transactions. These grants are the transaction fees that users pay when they send money. This is why they often prioritize higher cost transactions.
Although Thailand recently ranked 11th among the countries and economies with the highest interest in cryptocurrencies in 2021, in the crypto interest index led by Coinformant, the Thai central bank remains cautious about using digital assets as a means of payment for goods. and services.
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