A Guide On How To Understand Bitcoin And Cryptocurrency?
Despite the fact that Bitcoin is one of the most searched for terms (based on Google), it is a very technical topic for lots of people and can get overly technical for non geeks. However, there are now hundreds of cryptocurrencies and more and more individuals are starting to need to get to know how they work probably driven by a dis trust of bankers, which is a whole different discussion.
It’s difficult to get a lay man’s explanation without having to make use of technical phrases akin 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 easier for people to make an exchange for goods or services to exchange bartering, as this would be limited to an trade between willing parties at greatest, whereas money allows you to provide your service or goods, then purchase no matter service or items you require from another or others.
Subsequently, I would argue that Bitcoin is the twenty first Century equal to bartering, in that it works as an change for goods or companies directly between willing parties. Bartering had to be based on every promise and trust, to provide and deliver the promised goods or service.
Right this moment with Bitcoin or some other cryptocurrency every party would wish a unique file or unique key to exchange the agreed value between every other.
By having a singular key or file it turns into easier to keep a document on each transaction. However, this too comes with problems.
Now, bartering is the simple alternate of skills or items as I have already said, the fashionable 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 want a safe location for 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 up to date every 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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