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Transition to Web3 - Course 2 | Transactions and Bitcoin

🤯 That was a lot of new information! Let’s sum up the key points.

Satoshi Nakamoto introduced the bitcoin blockchain system in 2008 as a way to facilitate a distributed ledger that maintains a record of transactions in a decentralized system.

Just as with any data, transactions can also be stored on the blockchain.

However, to ensure the validity of these transactions, we need to make sure that the sender of the transaction really authorized the transaction.

Each person creates a wallet that includes a private key and a public key. The public key serves as your unique identifier (similar to your bank account username) and the private key needs to stay private (similar to your bank account password).

The blockchain asks each transaction to include a unique signature that only the sender can produce with the sender's own private key. Others in the network can verify that a signature is valid for a transaction by only using the sender's public key.

Before a transaction is added to a block, it is validated using this mechanism. 

Such a system ensures a reliable financial transaction ecosystem, which can support its own digital currency. Bitcoin is the digital currency for Satoshi's blockchain system. 

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