Since the current value of a bit-coin is $ 1,000, the question arises as to how to use a bit-coin for small purchases. To understand how this works, it is important to understand that bit-coin corresponds to the address that appears in a bit-coin block-chain. In the simplest form, consider a large balance database for each bit-coin address. In turn, your wallet holds a private key for each address, which can be treated as the required password to consume the balance of the corresponding address for authentication. When you spend some bit-coin, you can send from one address to another. Only people with private keys corresponding to these addresses can spend bit-coin on their balances.
Now, this still cannot explain how bit-coin is divided into smaller scores. So to make things clear, the bit-coin protocol does not really work with the unit bit-coin, but a smaller unit called Satoshi (yes, obviously mentioned the creator of bit-coin). In fact a bit-coin equals 100 million intellects. So, a Satoshi is the smallest amount you send - so you can trade a fraction of bit-coin. And the currency trading market is somewhat similar, every ten minutes or so, the coins through the process of lottery-like distribution. Allegedly, bit-coin software in the next two decades will release a total of 21 million bit-coin.
