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A Guide On How To Understand Bitcoin And Cryptocurrency?

Although Bitcoin is without doubt one of the most looked for terms (in response to Google), it is a really technical topic for lots of people and might get overly technical for non geeks. However, there are actually hundreds of cryptocurrencies and more and more individuals are starting to want to get to know how they work possibly pushed by a dis trust of bankers, which is a whole different discussion.

It is difficult to get a lay man’s rationalization without having to make use of technical terms corresponding to “secret keys”, “digital keys”, “digital wallet” and “cryptocurrency” so I will do my greatest to keep things as straight forward as I possibly 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 providers to replace bartering, as this could be limited to an alternate between two willing parties at greatest, whereas cash lets you provide your service or items, then buy whatever service or goods you require from one other or others.

Therefore, I would argue that Bitcoin is the 21st Century equivalent to bartering, in that it works as an alternate for items 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.

Right now with Bitcoin or any other cryptocurrency every party would need a unique file or unique key to change the agreed worth between each other.

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

Now, bartering is the straightforward change of skills or goods as I’ve already said, the modern equal, or bitcoin is vulnerable 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 for your cryptocurrency/bitcoin purchases and holdings. This is where the need for a hardware wallet comes from.

So now that you have 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 document of all transactions made with bitcoin.

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