A Guide On How To Understand Bitcoin And Cryptocurrency?
Even though Bitcoin is among the most looked for terms (according to Google), it is a very technical subject for lots of people and can get overly technical for non geeks. However, there are now hundreds of cryptocurrencies and more and more persons are starting to want to get to know how they work probably driven by a dis trust of bankers, which is an entire completely different discussion.
It is difficult to get a lay man’s explanation without having to make use of technical phrases 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 Concept of Fiat money i.e. paper currency, was formulated to make it easier for people to make an trade for goods or companies to interchange bartering, as this could be limited to an change between two willing parties at best, whereas money lets you provide your service or goods, then purchase no matter service or items you require from one other or others.
Due to this fact, I might argue that Bitcoin is the 21st Century equal to bartering, in that it works as an change for goods or services directly between willing parties. Bartering had to be based mostly on every promise and trust, to provide and deliver the promised goods or service.
At the moment with Bitcoin or some other cryptocurrency each party would want a unique file or unique key to alternate the agreed worth between each other.
By having a singular key or file it becomes easier to keep a report on every transaction. However, this too comes with problems.
Now, bartering is the straightforward change of skills or items as I have already said, the trendy equal, or bitcoin is susceptible 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 in your cryptocurrency/bitcoin purchases and holdings. This is where the need for a hardware wallet comes from.
So now that you’ve written down/recorded which address holds which amount of Bitcoins after which updated every 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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