How To Understand Bitcoin?
A Guide On How To Understand Bitcoin And Cryptocurrency?
Though Bitcoin is without doubt one of the most searched for terms (based on Google), it is a very technical topic for lots of people and might get overly technical for non geeks. However, there are now hundreds of cryptocurrencies and more and more people are starting to need to get to know how they work possibly driven by a dis trust of bankers, which is an entire different discussion.
It is troublesome to get a lay man’s rationalization without having to use technical terms equivalent to “secret keys”, “digital keys”, “digital wallet” and “cryptocurrency” so I will do my greatest to keep things as straight forward as I probably can.
The Concept of Fiat money i.e. paper currency, was formulated to make it less complicated for people to make an alternate for items or providers to switch bartering, as this would be limited to an trade between willing parties at finest, whereas cash means that you can provide your service or goods, then purchase whatever service or goods you require from another or others.
Therefore, I’d 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 on every promise and trust, to provide and deliver the promised items or service.
In the present day with Bitcoin or every other cryptocurrency every party would wish a singular file or unique key to alternate the agreed value between each other.
By having a unique key or file it turns into easier to keep a report on every transaction. Nevertheless, this too comes with problems.
Now, bartering is the simple change of skills or items as I’ve already said, the modern equal, or bitcoin is prone to security breaches, i.e. theft or hacking of files, this is the place a “cryptocurrency wallet” comes into the equation to safe your transactions.
Basically you want a safe location on your cryptocurrency/bitcoin purchases and holdings. This is where the necessity for a hardware wallet comes from.
So now that you’ve written down/recorded which address holds which quantity of Bitcoins and then updated 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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