A Guide On How To Understand Bitcoin And Cryptocurrency?
Despite the fact that Bitcoin is without doubt one of the most looked for terms (based on Google), it is a very technical subject for a lot of people and can get overly technical for non geeks. However, there at the moment are hundreds of cryptocurrencies and more and more persons are starting to want to get to know how they work possibly pushed by a dis trust of bankers, which is a whole completely different discussion.
It is tough to get a lay man’s clarification without having to use technical phrases equivalent to “secret keys”, “digital keys”, “digital wallet” and “cryptocurrency” so I will do my greatest to keep things as straight forward as I presumably can.
The Concept of Fiat cash i.e. paper currency, was formulated to make it less complicated for people to make an trade for goods or services to exchange bartering, as this would be limited to an alternate between willing parties at best, whereas cash allows you to provide your service or items, then buy whatever service or items you require from another or others.
Subsequently, I would argue that Bitcoin is the twenty first Century equivalent to bartering, in that it works as an trade for items or services directly between two willing parties. Bartering had to be primarily based on every promise and trust, to provide and deliver the promised goods or service.
At the moment with Bitcoin or any other cryptocurrency each party would want a unique file or distinctive key to change the agreed value between each other.
By having a unique key or file it becomes easier to keep a report on every transaction. However, this too comes with problems.
Now, bartering is the straightforward trade of skills or items as I’ve already acknowledged, the trendy equal, or bitcoin is vulnerable to security breaches, i.e. theft or hacking of files, this is the place a “cryptocurrency wallet” comes into the equation to safe your transactions.
Basically you need a secure location for 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 quantity of Bitcoins after which updated every time a transaction is made, the file is known as “The blockchain” – and it keeps a record of all transactions made with bitcoin.
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