Bitcoin and altcoins rely on blockchain technology to carry out their operations. Here are simple steps to understand how it works:
1. **Decentralized distribution and storage**: Bitcoin and other currencies use a decentralized network where records (transactions) are stored on multiple devices distributed around the world, without a single central entity.
2. **Blockchain**: It is a public ledger containing all transactions that have taken place since the beginning of the network. These transactions are grouped into "blocks" and linked together to form a chain of blocks (blockchain).
3. **Verification and mining: Transactions are verified and added to the blockchain through the process of mining, where miners solve a complex mathematical problem to add new blocks. Miners are rewarded with units of currency as a reward for their work.
4. **Digital wallets**: These are tools that allow individuals to store and manage digital currencies, as they hold the private keys that allow access to funds.
5. **Transfers and Transactions**: Individuals can make transfers and transactions quickly and at low cost without the need for a traditional financial intermediary.
This is the broad outline of how Bitcoin and altcoins work. More complex details include security, privacy, and the ongoing technological developments in this field.