How To Understand Bitcoin?

A Guide On How To Understand Bitcoin And Cryptocurrency?

Even though Bitcoin is one of the most searched for terms (based on Google), it is a very technical subject for a lot of people and might get overly technical for non geeks. Nonetheless, there are now hundreds of cryptocurrencies and more and more people are starting to need to get to know how they work presumably pushed by a dis trust of bankers, which is a complete different discussion.

It is difficult to get a lay man’s explanation without having to make use of technical terms equivalent 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 simpler for folks to make an alternate for goods or services to interchange bartering, as this would be limited to an change between willing parties at best, whereas money means that you can provide your service or goods, then buy no matter service or goods you require from one other or others.

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

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

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

Now, bartering is the straightforward change of skills or goods as I have already acknowledged, 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 want a secure location to your cryptocurrency/bitcoin purchases and holdings. This is the place 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 each 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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