Ownership of Bitcoin is determined by the degree to which it has a cryptographic key that controls access to a particular Bitcoin in the blockchain. Their duties are as follows:
1. **Private Key**:
Each Bitcoin address on the blockchain is associated with a unique encryption key. These private keys are actually a long string of alphanumeric characters that allow access to Bitcoins stored at that address.
**Wallets**:
Bitcoin holders use digital wallets to store and manage their private keys. Wallets can be used in many ways, including software wallets (desktop or mobile applications), hardware wallets (physical devices), paper wallets (copy of private keys), or custodial wallet (managed by a third-party service). >
3. ** Identity Management **:
The person who has the private key associated with a Bitcoin address actually owns the Bitcoins stored at that address. This membership is determined by cryptographic evidence, not by a central authority or registry.
** Transfers and Transactions **:
When Bitcoins are transferred from one address to another, the transaction is recorded on the blockchain, a transparent ledger. To initiate a transaction, the sender uses their personal account to digitally sign the transaction, provide proof of ownership, and authorize the transaction. The recipient manages Bitcoin by having a private key associated with the recipient’s address.
**Anonymous**:
When Bitcoin transactions are recorded on a public ledger, participants’ identities are not directly tied to their Bitcoin addresses. This pseudonymous nature of the blockchain provides users with a degree of privacy, although transactions can be tracked and analyzed to some degree.
**Member Verification**
: Anyone can use the block explorer (an online tool) to view the balance and transaction history of all Bitcoin addresses on the blockchain. However, knowing the address does not necessarily mean revealing the owner’s identity unless he or she chooses to have it disclosed. A great and secure way to transfer and store value without the need for intermediaries.
