A Guide On How To Understand Bitcoin And Cryptocurrency?
Although Bitcoin is one of the most looked for phrases (according to Google), it is a very technical subject for a lot of people and might get overly technical for non geeks. However, there are actually hundreds of cryptocurrencies and more and more individuals are starting to wish to get to know how they work probably pushed by a dis trust of bankers, which is an entire totally different discussion.
It is tough to get a lay man’s explanation without having to make use of technical terms akin 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 Idea of Fiat money i.e. paper currency, was formulated to make it less complicated for folks to make an alternate for goods or companies to exchange bartering, as this would be limited to an alternate between two willing parties at best, whereas cash lets you provide your service or goods, then buy whatever service or goods you require from another or others.
Subsequently, I might argue that Bitcoin is the twenty first Century equal to bartering, in that it works as an change for items or services directly between willing parties. Bartering had to be based mostly on every promise and trust, to provide and deliver the promised items or service.
Immediately with Bitcoin or another cryptocurrency every party would need a novel file or distinctive key to change the agreed value between every other.
By having a singular key or file it turns into easier to keep a record on every transaction. Nevertheless, this too comes with problems.
Now, bartering is the easy trade of skills or goods as I have already acknowledged, the modern equivalent, or bitcoin is vulnerable 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 to your cryptocurrency/bitcoin purchases and holdings. This is where the need for a hardware wallet comes from.
So now that you’ve got written down/recorded which address holds which amount of Bitcoins and then up to date each 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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