How To Understand Bitcoin?

A Guide On How To Understand Bitcoin And Cryptocurrency?

Regardless that Bitcoin is one of the most searched for terms (in accordance with Google), it is a really technical subject for a lot of people and can get overly technical for non geeks. However, there are actually hundreds of cryptocurrencies and more and more individuals are starting to want to get to know how they work probably pushed by a dis trust of bankers, which is an entire totally different discussion.

It is troublesome to get a lay man’s explanation without having to make use of technical phrases similar to “secret keys”, “digital keys”, “digital wallet” and “cryptocurrency” so I will do my finest to keep things as straight forward as I probably can.

The Idea of Fiat cash i.e. paper currency, was formulated to make it simpler for folks to make an exchange for items or companies to replace bartering, as this can be limited to an exchange between willing parties at best, whereas money allows you to provide your service or goods, then buy no matter service or items you require from another or others.

Therefore, I would argue that Bitcoin is the 21st Century equal to bartering, in that it works as an exchange for items or services directly between willing parties. Bartering had to be primarily based on each promise and trust, to provide and deliver the promised goods or service.

As we speak with Bitcoin or any other cryptocurrency each party would want a singular file or unique key to alternate the agreed value between every other.

By having a novel key or file it becomes easier to keep a file on each transaction. However, this too comes with problems.

Now, bartering is the straightforward trade of skills or goods as I’ve already acknowledged, the modern equal, or bitcoin is vulnerable to security breaches, i.e. theft or hacking of files, this is where a “cryptocurrency wallet” comes into the equation to safe your transactions.

Basically you need a safe location to your cryptocurrency/bitcoin purchases and holdings. This is where the need for a hardware wallet comes from.

So now that you have written down/recorded which address holds which amount of Bitcoins after which up to date every time a transaction is made, the file is known as “The blockchain” – and it keeps a report of all transactions made with bitcoin.

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