How To Understand Bitcoin?

A Guide On How To Understand Bitcoin And Cryptocurrency?

Though Bitcoin is one of the most looked for terms (in accordance with 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 people are starting to want to get to know how they work probably driven by a dis trust of bankers, which is an entire different discussion.

It is tough to get a lay man’s clarification without having to use technical phrases akin to “secret keys”, “digital keys”, “digital wallet” and “cryptocurrency” so I will do my best to keep things as straight forward as I possibly can.

The Idea of Fiat money i.e. paper currency, was formulated to make it simpler for individuals to make an alternate for items or companies to interchange bartering, as this would be limited to an trade between willing parties at finest, whereas money means that you can provide your service or items, then buy no matter service or items you require from another or others.

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

At present with Bitcoin or another cryptocurrency each party would wish a unique file or unique key to exchange the agreed worth between every other.

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

Now, bartering is the simple trade of skills or goods as I have already said, the modern equivalent, or bitcoin is susceptible to security breaches, i.e. theft or hacking of files, this is the place a “cryptocurrency wallet” comes into the equation to secure your transactions.

Basically you need a secure location in your cryptocurrency/bitcoin purchases and holdings. This is the place the necessity for a hardware wallet comes from.

So now that you’ve written down/recorded which address holds which quantity of Bitcoins after which updated 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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