A Guide On How To Understand Bitcoin And Cryptocurrency?
Even if Bitcoin is one of the most searched terms (according to Google), it’s a technical topic for many people and can be overly technical for non -geeks. However, today there are hundreds of cryptocurrencies and more and more people are starting to want to know how they work which is possibly driven by a distrust of bankers, which is a different discussion.
It’s hard to get an explanation from a layman who doesn’t have to use technical terms like “secret key”, “digital key”, “digital wallet” and “cryptocurrency” so I’ll do my best. good to keep things as straight forward as I can. can.
The Concept of Fiat money ie paper money, was formed to make it easier for people to make an exchange of goods or services to replace bartering, as it was limited to an exchange between the two. willing parties at best, while money allows you to give. your services or goods, then purchase any services or goods you need from another or others.
So, I would argue that Bitcoin is the 21st Century equivalent of bartering, because it works as an exchange of goods or services directly between two willing parties. Bartering must be based on every promise and trust, in order to provide and deliver the promised goods or services.
Now with Bitcoin or any cryptocurrency each party will need a unique file or unique key to exchange the agreed amount with each other.
Having a unique key or file makes it easier to keep a record of every transaction. However, it also has its problems.
Now, bartering is the simple exchange of skills or things like I said, the modern equivalent, or bitcoin can easily breach security, i.e. stealing or hacking files, this is where a ” cryptocurrency wallet ”comes into the equation to be sure. your transactions.
Basically you need a secure location for your purchases and cryptocurrency/bitcoin assets. Here comes the need for a hardware wallet.
So now that you have written / recorded which address holds what amount of Bitcoins and then updated each time there is a transaction, the file is known as “The blockchain” – and it keeps a record of all that transactions made using bitcoin.
The next issue is making sure our files remain unique.
We will discuss this in my next article.