A Guide On How To Understand Bitcoin And Cryptocurrency?
Even though Bitcoin is without doubt one of the most looked for phrases (according to Google), it is a very technical topic for a lot of people and may get overly technical for non geeks. Nonetheless, there are actually hundreds of cryptocurrencies and more and more individuals are starting to want to get to know how they work possibly pushed by a dis trust of bankers, which is a whole different discussion.
It’s tough to get a lay man’s rationalization 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 Idea of Fiat cash i.e. paper currency, was formulated to make it less complicated for individuals to make an trade for goods or services to interchange bartering, as this can be limited to an trade between two willing parties at best, whereas money allows you to provide your service or goods, then buy whatever service or goods you require from one other or others.
Subsequently, I might argue that Bitcoin is the 21st Century equivalent to bartering, in that it works as an trade for goods or providers directly between willing parties. Bartering had to be based on each promise and trust, to provide and deliver the promised goods or service.
At present with Bitcoin or any other cryptocurrency each party would need a singular file or distinctive key to alternate the agreed worth between every other.
By having a singular key or file it becomes simpler to keep a document on each transaction. However, this too comes with problems.
Now, bartering is the straightforward change of skills or items as I’ve already stated, the modern equivalent, or bitcoin is susceptible 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 safe location on your cryptocurrency/bitcoin purchases and holdings. This is the place the need for a hardware wallet comes from.
So now that you’ve got written down/recorded which address holds which quantity of Bitcoins and then up to date each 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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