How To Understand Bitcoin?

A Guide On How To Understand Bitcoin And Cryptocurrency?

Even though Bitcoin is among the most searched for terms (based on Google), it is a really technical subject for a lot of people and may get overly technical for non geeks. Nonetheless, there are now hundreds of cryptocurrencies and more and more individuals are starting to want to get to know how they work probably driven by a dis trust of bankers, which is a whole totally different discussion.

It’s tough to get a lay man’s clarification without having to make use of technical terms corresponding 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 Concept of Fiat money i.e. paper currency, was formulated to make it less complicated for people to make an alternate for goods or services to interchange bartering, as this would be limited to an exchange between willing parties at best, whereas money allows you to provide your service or goods, then buy whatever service or items you require from another or others.

Due to this fact, I might argue that Bitcoin is the 21st Century equal to bartering, in that it works as an alternate for items or providers directly between two willing parties. Bartering had to be based mostly on every promise and trust, to provide and deliver the promised goods or service.

At present with Bitcoin or any other cryptocurrency every party would want a singular file or unique key to exchange the agreed value between every other.

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

Now, bartering is the simple exchange of skills or items as I have already stated, the trendy equivalent, or bitcoin is prone to security breaches, i.e. theft or hacking of files, this is where a «cryptocurrency wallet» comes into the equation to secure your transactions.

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

So now that you have written down/recorded which address holds which quantity of Bitcoins after which updated each time a transaction is made, the file is known as «The blockchain» — and it keeps a file of all transactions made with bitcoin.

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