Comment: Try this

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In reply to comment: I just understand Bitcoins. (see in situ)

Try this


To answer your question directly, every bitcoin ever created and every transaction involving the coins is recorded in a distributed database called the block chain.

The block chain is completely public. Anyone can view it all. Counterfeit coins are immediately detected and rejected by the network. Bitcoin works by using cryptography. Computers can check for valid transactions by using math, but without knowing the person's private key. The cryptography is explained in depth in this video.