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Warren Buffett: Why You Should NEVER Invest In Bitcoin (UNBELIEVABLE)This is the best video out there by far that is easily understandable but also very thoroughly explains how BTC works. Upvote. The Bitcoin blockchain is a database of transactions secured by encryption and validated by peers. Here's how it works. The blockchain is not stored in one. How does Bitcoin work? Each Bitcoin is basically a computer file which is stored in a 'digital wallet' app on a smartphone or computer. People.