How To Understand Bitcoin?

How To Understand Bitcoin?

A Guide On How To Understand Bitcoin And Cryptocurrency?

Even though Bitcoin is among the most searched for phrases (based on Google), it is a really technical subject for lots 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 wish to get to know how they work probably driven by a dis trust of bankers, which is a complete different discussion.

It is troublesome to get a lay man's explanation without having to use technical phrases similar to "secret keys", "digital keys", "digital wallet" and "cryptocurrency" so I will do my greatest to keep things as straight forward as I possibly can.

The Idea of Fiat money i.e. paper currency, was formulated to make it less complicated for individuals to make an exchange for items or services to replace bartering, as this could be limited to an change between two willing parties at finest, whereas cash means that you can provide your service or items, then buy whatever service or goods you require from one other or others.

Therefore, I would argue that Bitcoin is the twenty first Century equal to bartering, in that it works as an change for goods or companies directly between two willing parties. Bartering had to be primarily based on each promise and trust, to provide and deliver the promised items or service.

Right this moment with Bitcoin or another cryptocurrency each party would need a novel file or unique key to alternate the agreed worth between every other.

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

Now, bartering is the simple exchange of skills or items as I have 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 need for a hardware wallet comes from.

So now that you've got 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 file of all transactions made with bitcoin.

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