Making sure that our files are safe and that no one can alter them to claim that their address has more cryptocurrency (Bitcoin, Ethereum, Litecoin, etc.) is a major concern right now.) than in reality they own.
This is where “mining” comes into effect as one solution.
Basically, we have a network that sends the file to tens of thousands of “rubber stampers” that can sign off on the authenticity of the transaction therefore checking that everything is genuine and validating the transfer. Consequently, the sender will be able to use his Bitcoin and you will be able to receive it without worry.
Now, here is where human nature kicks in, we have to compensate people (or miners) for their time and effort for verifying all these transactions (there is also an energy cost to take into account) After all why not share amongst us all, and this leads us to “Bitcoin miners”.
Did you see my comment above, “After all why not share amongst us all”, welcome to the 21st century and the world of cryptocurrencies! After all we are cutting out the middle man (bankers and ultimately the government) So the “miners” get compensated with How’s that for a great deal? By using Bitcoins and the blockchain to ensure that all transactions are legitimate, there is no middleman manipulating the currency.
So now you have a decentralized currency (no government manipulation or interference, and this is important) being watched over by thousands of miners, who, yes, do get paid a small fee, but are checking the legitimacy and honesty of all these transactions.
That’s cash fit for the twenty-first century and beyond.
Transactions are now covered, but where should I keep my bitcoins?
This is where the wallet comes in.
Simply put, in order for you to transact within the bitcoin environment, you have a unique bitcoin code that can be used to send bitcoins to you and is visible to everyone.
Where then do I store my bitcoins?
The same location where you keep your cash (if you use a wallet), but this one is a Bitcoin (cryptocurrency) wallet.
You only need to create a special address to store your bitcoins (a type of cryptocurrency), and you can access your bitcoin balance by going to this address. An email address and password are required to access this program online.
That’s a short explanation, but I need to go into more detail, which I’ll cover in the following article.