A guide on how to understand bitcoin and cryptocurrency?
Although bitcoin is one of the most sought after terms (according to Google), it is a very technical topic for many people and may be too technical for non geeks. 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 distrust of bankers, and that’s a whole other discussion.
It’s hard to get a non-professional 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. can.
The concept of fiat money, that is, paper currency, has been formulated to make it easier for people to exchange goods or services to replace barter, as this is at best limited to exchanges between two willing parties, while money allows you to provide your services or goods. and then purchase any service or goods that you need from another or others.
So I would argue that bitcoin is the equivalent of 21st century barter because 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 provide and deliver the promised goods or services.
Today with bitcoin or any other cryptocurrency each party will need a unique file or a unique key to share the agreed price among themselves.
Having a unique key or file makes it easier to keep a record of each transaction. However, this also poses problems.
Now, barter is a simple exchange of skills or goods, as I said, the modern equivalent, or bitcoin prone to security breaches, ie theft or hacking of files, here the equation for security is “cryptocurrency wallet”. your transactions.
Basically, you need a safe place to buy and store cryptocurrencies / bitcoins. That’s where you need a hardware wallet.
So now that you’ve written down / written down at what address how many bitcoins are stored and then updated each time a transaction is made, the file is known as “Blockchain” – and it keeps a record of all transactions made with bitcoins.
The next issue is to keep our files unique.
I will deal with this in my next article.