A Guide On How To Understand Bitcoin And Cryptocurrency?

Although Bitcoin is without doubt one of the most searched for phrases (in keeping with Google), it is a really technical topic for a lot of people and might get overly technical for non geeks. Nonetheless, there are now hundreds of cryptocurrencies and more and more people are starting to want to get to know how they work possibly driven by a dis trust of bankers, which is a whole totally different discussion.

It’s difficult 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 finest to keep things as straight forward as I presumably can.

The Idea of Fiat cash i.e. paper currency, was formulated to make it simpler for folks to make an trade for goods or companies to exchange bartering, as this would be limited to an alternate between two willing parties at greatest, whereas money means that you can provide your service or items, then purchase whatever service or goods you require from another or others.

Therefore, I would argue that Bitcoin is the 21st Century equal to bartering, in that it works as an exchange for items or services directly between willing parties. Bartering had to be based on each promise and trust, to provide and deliver the promised goods or service.

As we speak with Bitcoin or another cryptocurrency every party would need a unique file or unique key to alternate the agreed value between each other.

By having a singular key or file it becomes easier to keep a report on each transaction. Nonetheless, this too comes with problems.

Now, bartering is the straightforward trade of skills or items as I have already acknowledged, the modern equivalent, or bitcoin is prone 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 secure location to 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 quantity of Bitcoins and then updated every time a transaction is made, the file is known as “The blockchain” – and it keeps a file of all transactions made with bitcoin.

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