[Doxin]

> It is just the summation of the history of transactions to and from an address?

It is. Imagine the blockchain as a democratic ledger. As long as most people agree a certain transaction is valid it then is valid. This allows for tricks like creating bitcoins out of thin air as long as everyone agrees you "deserve" those bitcoins. For example if you confirm enough of other peoples transactions (which you can do because the ledger is public) most everyone will agree that a transaction from nowhere to an address of your choosing is valid.

The amount of bitcoins in your possession is just the amount of bitcoins ever transfered to addresses to which you own the private key, minus the transactions out of those adresses.

You shouldn't think of bitcoin as a virtual coin. That's a fairly bad metaphor. It's not some actual thing, It's more like the balance in a ledger.

[libertymcateer]

Right, that was my instinct, it is just that the documentation I have seen, including the O'Reilley bitcoin manual, on the coinbase transaction, glosses over this point.

This is the best explanation I've seen so far: https://bitcoin.stackexchange.com/questions/10050/how-balanc...