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How To Understand Bitcoin?

 

A Guide On How To Understand Bitcoin And Cryptocurrency?

 

 

Although Bitcoin is likely one of the most searched for terms (according to Google), it is a really technical topic for a lot of people and can get overly technical for non geeks. Nevertheless, there are now hundreds of cryptocurrencies and more and more people are starting to want to get to know how they work probably driven by a dis trust of bankers, which is a complete totally different discussion.

 

 

It is tough to get a lay man's explanation without having to use technical terms similar to "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 cash i.e. paper currency, was formulated to make it less complicated for people to make an trade for goods or companies to replace bartering, as this could be limited to an exchange between two willing parties at greatest, whereas cash allows you to provide your service or goods, then purchase 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 companies directly between willing parties. Bartering had to be based on each promise and trust, to provide and deliver the promised goods or service.

 

 

At this time with Bitcoin or any other cryptocurrency every party would want a novel file or unique key to trade the agreed worth between each other.

 

 

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

 

 

Now, bartering is the simple alternate of skills or goods as I've already stated, the trendy equivalent, or bitcoin is vulnerable to security breaches, i.e. theft or hacking of files, this is where a "cryptocurrency wallet" comes into the equation to safe your transactions.

 

 

Basically you need a secure location on your cryptocurrency/bitcoin purchases and holdings. This is where the necessity 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 report of all transactions made with bitcoin.

 

 

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