How To Understand Bitcoin?
A Guide On How To Understand Bitcoin And Cryptocurrency?
Despite the fact that Bitcoin is likely one of the most looked for phrases (in response to Google), it is a very technical subject for a lot of people and can get overly technical for non geeks. Nevertheless, there are actually hundreds of cryptocurrencies and more and more people are starting to need to get to know how they work presumably driven by a dis trust of bankers, which is a complete totally different discussion.
It is tough to get a lay man's clarification without having to use technical phrases such as "secret keys", "digital keys", "digital wallet" and "cryptocurrency" so I will do my best to keep things as straight forward as I presumably can.
The Concept of Fiat money i.e. paper currency, was formulated to make it less complicated for folks to make an change for items or companies to exchange bartering, as this would be limited to an change between two willing parties at best, whereas money means that you can provide your service or items, then buy whatever service or items you require from another or others.
Therefore, I would argue that Bitcoin is the twenty first Century equal to bartering, in that it works as an exchange for items or services directly between two willing parties. Bartering had to be based mostly on each promise and trust, to provide and deliver the promised items or service.
As we speak with Bitcoin or another cryptocurrency each party would need a novel file or distinctive key to trade the agreed value between each other.
By having a novel key or file it turns into easier to keep a record on every transaction. Nevertheless, this too comes with problems.
Now, bartering is the simple exchange of skills or items as I've already stated, the fashionable equivalent, 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 safe your transactions.
Basically you want a safe location to your cryptocurrency/bitcoin purchases and holdings. This is where the necessity for a hardware wallet comes from.
So now that you have 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 report of all transactions made with bitcoin.
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