I will explain where the $BTC is physically stored, its structure and security.
Bitcoin Physical Storage:
Bitcoin is not physically stored in a specific location, such as a vault or central server. Instead, it exists as decentralized digital data on a network called the blockchain.
The blockchain is a distributed database that records all Bitcoin transactions. Each transaction is grouped into a block and added to the blockchain through a consensus process called mining. Miners use computing power to verify and validate transactions, ensuring the integrity of the network. These blocks are chained sequentially, forming the blockchain.
Bitcoin Structure:
Bitcoin is based on a technology called public key cryptography.
Each user has a key pair:
a public key (used to receive funds) and a private key (used to sign transactions and spend funds).
Transactions are recorded on the blockchain and include information about the sender, recipient, and amount transferred. These transactions are protected by cryptography.
Bitcoin Security:
The security of Bitcoin is guaranteed by encryption and decentralization. Because each transaction is verified by many nodes on the network, it is difficult to falsify or tamper with records.
Private keys are essential for security. If someone gains access to your private key, they can move your funds. Therefore, it is crucial to store it safely away from prying eyes.
There are different types of wallets for storing Bitcoin:
Hot Wallets:
Connected to the internet, such as mobile and desktop wallets. They are convenient for frequent transactions, but less secure.
Cold Wallets: They are not connected to the internet, like hardware and paper wallets. They are safer, but less practical for daily use.
In short, Bitcoin is not physically stored in a single place, but rather on thousands of computers around the world, protected by encryption and decentralization.
