A Guide to Understanding Bitcoin and Cryptocurrency?
Although Bitcoin is one of the most searched terms (according to Google), it is a very technical topic for many people and can become too technical for non-humans. However, there are now hundreds of cryptocurrencies and more and more people are starting to want to know how they work, perhaps because of the mistrust of bankers, which is a whole other discussion.
It’s hard to get a layman’s explanation without using technical terms like “secret keys”, “digital keys”, “digital wallet” and “cryptocurrency”, so I’ll do my best to make things as simple as possible. it is possible.
The concept of maternity money, ie. paper currency, was formulated to make it easier for people to exchange goods or services instead of barter, since at best it would be limited to an exchange between two willing parties, while money allows you to provide your service or goods and then purchase any services or goods, that you need from another or others.
Therefore, I would argue that Bitcoin is the 21st century equivalent of barter as it works as an exchange of goods or services directly between two willing parties. Barter had to be based on every promise and trust to secure and deliver the promised goods or services.
Today, with Bitcoin or any other cryptocurrency, each party will need a unique file or unique key to exchange an agreed value between them.
Having a unique key or file makes it easier to keep track of each transaction. However, it also comes with challenges.
Barter is a simple exchange of skills or goods, as I said, the modern equivalent, or Bitcoin is susceptible to security breaches, ie. your transactions.
Basically you need a secure location to buy and hold your cryptocurrency/bitcoins. Hence the need for a hardware wallet.
So now that you’ve recorded/recorded which address holds which number of bitcoins and then updated each time a transaction was made, that file is called a “block chain” and keeps a record of all bitcoin transactions.
The next task is to make sure that our files remain unique.
I will deal with this in my next article.