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Bitcoin Internals : A Thorough explanation of bitcoin and how it works from a technical perspective

Bitcoin is the world’s first decentralized digital currency. Unlike most existing payment systems, it does not rely on trusted authorities such as governments and banks to mediate transactions or issue currency. With Bitcoin, Transaction costs can be reduced to pennies (in contrast to typical credit card fees of 2%). Electronic payments can be confirmed in about an hour without expensive wire transfer fees, even internationally. There is a low risk of monetary inflation1 since the production rate of bitcoins is algorithmically limited and there can never be more than 21 million bitcoins produced. Payments are irreversible (there are no chargebacks), so there is a reduced risk of payment fraud. Payments can be made without identification, though some extra effort is needed to ensure that one’s identity cannot be exposed (See Section 2.1). Responsibility is shifted to the consumers, who can permanently lose all of their bitcoins if they lose their encryption keys.

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