A Guide On How To Understand Bitcoin And Cryptocurrency?
Though Bitcoin is one of the most looked for phrases (based on Google), it is a really technical subject for a lot of people and might get overly technical for non geeks. However, there are now hundreds of cryptocurrencies and more and more individuals are starting to wish to get to know how they work presumably driven by a dis trust of bankers, which is a whole completely different discussion.
It is troublesome to get a lay man’s rationalization without having to use technical terms akin to “secret keys”, “digital keys”, “digital wallet” and “cryptocurrency” so I will do my best to keep things as straight forward as I probably can.
The Idea of Fiat money i.e. paper currency, was formulated to make it easier for individuals to make an exchange for goods or providers to replace bartering, as this can be limited to an trade between two willing parties at finest, whereas money lets you provide your service or items, then buy no matter service or items you require from another or others.
Therefore, I’d argue that Bitcoin is the 21st Century equal to bartering, in that it works as an trade for items or services directly between willing parties. Bartering had to be primarily based on every 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 unique file or unique key to exchange the agreed value between every other.
By having a singular key or file it becomes easier to keep a record on every transaction. However, this too comes with problems.
Now, bartering is the easy change of skills or items as I’ve already acknowledged, the trendy equal, or bitcoin is inclined to security breaches, i.e. theft or hacking of files, this is the place a “cryptocurrency wallet” comes into the equation to secure your transactions.
Basically you want a secure location to 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 quantity of Bitcoins after which updated 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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