A guide on how to understand Bitcoin and cryptocurrencies?

Although Bitcoin is one of the most searched terms (according to Google), it is a very technical topic for many people and can get 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, possibly due to mistrust of bankers, which is a completely different discussion.

It’s hard to get a layman’s explanation without having to use technical terms like “secret keys”, “digital keys”, “digital wallet” and “cryptocurrency”, so I’ll do my best to keep things as simple as possible. . can.

The concept of fiat currency, i.e. paper money, was formulated to make it easier for people to exchange goods or services as a substitute for 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, then buy whatever services or goods you need from another or others.

Therefore, I would say that Bitcoin is the 21st century equivalent of barter, as it functions 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 would need a unique file or a unique key to exchange the agreed upon value between them.

By having a unique key or file, it becomes easier to keep track of each transaction. However, this also comes with problems.

Now bartering is the simple exchange of skills or goods as I’ve already said the modern equivalent or bitcoin is susceptible to security breaches i.e. file theft or hacking this is where a “cryptocurrency wallet” comes into the equation to secure your transactions

Basically, you need a secure location for your crypto/bitcoin purchases and holdings. This is where the need for a hardware wallet arises.

So now that you have noted/recorded which address contains which number of Bitcoins and then updated each time a transaction is made, the file is known as “The Blockchain” and it keeps a record of all bitcoin transactions made.

The next problem is ensuring that our files remain unique.

I will deal with this in my next article.