How To Understand Bitcoin?

A Guide On How To Understand Bitcoin And Cryptocurrency?

Despite the fact that Bitcoin is among the most looked for phrases (based on Google), it is a really technical subject for lots of people and can get overly technical for non geeks. However, there are actually hundreds of cryptocurrencies and more and more individuals are starting to need to get to know how they work possibly driven by a dis trust of bankers, which is an entire completely different discussion.

It is difficult to get a lay man’s explanation without having to use technical terms resembling „secret keys“, „digital keys“, „digital wallet“ and „cryptocurrency“ so I will do my finest to keep things as straight forward as I possibly can.

The Idea of Fiat cash i.e. paper currency, was formulated to make it easier for individuals to make an trade for goods or services to replace bartering, as this can be limited to an change between willing parties at best, whereas money means that you can provide your service or items, then purchase no matter service or items you require from one other or others.

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

At the moment with Bitcoin or any other cryptocurrency every party would need a singular file or unique key to trade the agreed worth between each other.

By having a singular key or file it turns into simpler to keep a record on every transaction. Nevertheless, this too comes with problems.

Now, bartering is the easy change of skills or goods as I’ve 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 safe your transactions.

Basically you need a secure location for 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 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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