How to understand Bitcoin?

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 be overly technical for non-geeks. However, there are now hundreds of cryptocurrencies, and more and more people want to learn how bankers work because of their unreliability, which is a completely different discussion.

It’s hard to get a simple person’s explanation without using technical terms like “secret keys”, “digital keys”, “digital wallet” and “cryptocurrency”, so I’ll do my best to keep everything as straightforward as possible. be able.

The concept of fiat money, ie paper currency, is designed to make it easier for people to exchange goods or services, because at best it will be limited to the exchange between two willing parties, while money allows you to provide money. get your service or goods, and then any services or goods that you require from someone else or others.

Therefore, I would argue that Bitcoin is equivalent to barter in the 21st century, because it works directly as an exchange of goods or services between two willing parties. Barter was based on every promise and trust, to provide and deliver the promised goods or services.

Today, with Bitcoin or any other cryptocurrency, each party needs a unique file or unique key to exchange the agreed value between each other.

Having a unique key or file makes it easy to keep a record of each transaction. But it also comes with problems.

Now, barter, as I have already mentioned, is a simple skill or barter, the modern equivalent or bitcoin is vulnerable to security breaches, i.e. file theft or hacking, where a “cryptocurrency wallet” is included in the equation to ensure security. your operations.

Basically you need a safe place for your cryptocurrency / bitcoin purchases and holdings. This is where the need for a hardware wallet comes from.

So now that you have written / recorded how much bitcoin is stored at which address and then updated every time you make a transaction, the file is known as “Blockchain” and it keeps a record of all transactions with bitcoin.

The next step is to keep our files unique.

I will talk about this in the next article.