![]() Bitcoin is connected by design, and all the data is in the public realm. We can see the value of network visualization. In fact, every Bitcoin wallet contains a record of every single transaction in the history of data, which allows validation of future transactions.īroadcasting those transactions globally can result in disagreement across the network which could undermine the whole currency, so Bitcoin uses a blockchain solution to maintain and protect the correct order of transactions. To maintain trust within a global financial network of anonymous strangers, every transaction is broadcast to every node in the network. A user can have many wallets, and wallets can have many addresses, and addresses can be generated on demand. Transactions are contained within blocks. Instead, its value is based on its users’ trust in the system.īitcoin coins are mined and can be sent between users’ wallets as transactions that have input addresses and output addresses. Unlike traditional currencies, Bitcoin is not backed by an institution, like a government or bank. For this post, we’ll keep it simple.īitcoin is a digital currency that uses the blockchain to manage and secure transactions. There are whole websites devoted to the inner workings of Bitcoin. They’re widely regarded as the future of finance, so it’s no wonder people want to learn more. Compared to traditional fiat currencies, decentralized cryptocurrencies offer a secure, low-cost way to transfer funds anywhere in the world. ![]() ![]() While governments and banks still dislike the concept of digital currencies, there’s a huge business opportunity. Whether it’s Bitcoin’s value fluctuations, million-dollar hacks, the launch of new currencies or stories of regulators grappling with a brave new world, barely a week passes without cryptocurrencies hitting the headlines. We’ll use Bitcoin data throughout, but the concepts of visual Bitcoin analysis could also be applied to other cryptocurrencies. This blog is the first of two posts looking at how our network visualization toolkits can help you make sense of Bitcoin transactions.
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