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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 (according to Google), it is a very technical topic for lots of people and may get overly technical for non geeks. Nonetheless, there at the moment are hundreds of cryptocurrencies and more and more individuals are starting to wish to get to know how they work possibly driven by a dis trust of bankers, which is an entire different discussion.

It's tough to get a lay man's rationalization without having to use technical phrases akin to "secret keys", "digital keys", "digital wallet" and "cryptocurrency" so I will do my greatest to keep things as straight forward as I probably can.

The Concept of Fiat money i.e. paper currency, was formulated to make it easier for people to make an trade for items or services to switch bartering, as this would be limited to an exchange between two willing parties at finest, whereas cash lets you provide your service or goods, then purchase whatever service or items you require from another or others.

Subsequently, I'd argue that Bitcoin is the twenty first Century equal to bartering, in that it works as an trade for items or companies directly between willing parties. Bartering had to be primarily based on each promise and trust, to provide and deliver the promised goods or service.

As we speak with Bitcoin or some other cryptocurrency each party would need a unique file or unique key to change the agreed worth between every other.

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

Now, bartering is the easy exchange of skills or items as I have already stated, the trendy equal, or bitcoin is inclined 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 want 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 have 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 document of all transactions made with bitcoin.

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