How it works At Bit Index Capital, we are committed to ensuring our clients are kept up-to-date on the latest products, state-of-the-art investment tools, platforms and accounts. Bitcoin is one of the first digital currencies to use peer-to-peer technology to facilitate instant payments.Bitcoin offers the promise of lower transaction fees than traditional online payment mechanisms and is operated by a decentralized authority, unlike government-issued currencies.It operates on a decentralized public ledger technology called the blockchain. When consumers make purchases using the U.S. dollar, banks and credit card companies verify the accuracy of those transactions. Bitcoin performs this same function at a lower cost without these institutions using a system called hashing. When one person pays another using bitcoin, computers on the Bitcoin blockchain rush to check that the transaction is accurate. In order to add new transactions to the blockchain, a computer must solve a complex mathematical problem, called a hash.