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Basics for a new user As a new user of Bitcoin, you can start using it without understanding the technical details behind it. Once a Bitcoin wallet has been installed on your computer or smartphone, it will generate your initial Bitcoin address and you can make one every time you need to send money. This address can be shared with others so they can also send you money. It’s actually quite similar to how e-mail works, except Bitcoin addresses must only be used once. Balances - the block chain The blockchain is a distributed database that records every transaction ever made on the Bitcoin network. Every user has access to the same copy of the blockchain, and everyone can verify that the information they see is accurate. Because the blockchain is decentralized, no single entity controls it. Transactions A transaction represents a change in ownership of Bitcoins stored in one or more Bitcoin wallets. Each wallet stores a secret piece of information called a private key or "seed", which is used to create digital signatures that prove ownership of the coins. These signatures prevent others from spending your coins without your permission. When you send money to another person, you must provide them with your public address (a unique identifier), rather than your own private key. They can then spend the funds only if they know your private key; otherwise, anyone could steal your money. Processing - mining Mining is a distributed algorithm used to verify pending transactions by including them into the block chain. Mining ensures that each transaction is chronologically ordered and protected against modification. Mining also prevents any single person from controlling the entire block chain. Mining is a competitive process that prevents individuals from manipulating the block chain to include their own transactions. In this way, mining is similar to a lottery where no one person can manipulate the outcome.