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I just downloaded Bitcoin on ubuntu and started as per the instructions in the README file. But, cannot understand the terms "Label", "Address" or any other for adding a new address or sending bitcoins or anything.

Can anyone help ??

Thank You !!!

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1 Answer 1

Bitcoin transaction has three important parts:

  1. from address A
  2. to address B
  3. amount of bitcoins

If Bitcoin client broadcasts correctly formed transaction then the network knows that certain amount of bitcoins were sent from address A to address B.

If the owner of address B wants to send bitcoins to someone else he formes transaction that looks like this:

  1. from address B
  2. to address C
  3. amount of bitcoins

You can have as many addresses as you want, but newly created address has zero bitcoins. You can buy bitcoins from someone e.g. Bitinstant or MtGox, and ask to send them to the newly created address. Once you have the bitcoins you can sell them or exchange for goods and services.

Label is just a description of an address that you can enter to help you remember, it won't be broadcasted to the network. For example, if you plan to receive bitcoins from MtGox and created a new address for that, then in label field you can enter "Bitcoins from MtGox".

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