While transactions and credit for a Bitcoin account are recorded in the block chain, the private key for signing new transactions is stored in the Ledger wallet. When you try to create a new transaction, dogecoin your computer prompts the wallet to sign it and then transfers it to the block chain. Since the private key never leaves the hardware wallet, your bitcoins are safe, even if your computer is hacked.
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The algorithm determines how transactions work and how new currencies are created. Users create peer transactions with software called wallets. Transactions are recorded in a digital public book.
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