Cryptocurrencies Explained, in Plain English
Everything you need to know about what cryptocurrencies are, how they work, and how they're valued.
Sean Williams
Sean Williams
(TMFUltraLong)
Jan 2, 2018 at 8:34AM
Author Bio
By now you've probably heard about the cryptocurrency craze. Either a family member, friend, neighbor, doctor, Uber driver, sales associate, server, barista, or passer-by on the street, has probably told you how he or she is getting rich quick with virtual currencies like bitcoin, Ethereum, Ripple, or one of the lesser-known 1,300-plus investable cryptocurrencies.
But how much do you really know about them? Considering just how many questions I've received out of the blue from the aforementioned group of people over the last month, the answer is probably, "not a lot."
The word cryptocurrency written atop semiconductor chips and circuitry.
IMAGE SOURCE: GETTY IMAGES.
Today, we'll change that. We're going to walk through the basics of cryptocurrencies, step by step, and explain things in plain English. No crazy technical jargon here. Just sticks and stones examples of how today's cryptocurrencies work, what they're ultimately trying to accomplish, and how they're being valued.
Let's get started.
What are cryptocurrencies?
Simply put, cryptocurrencies are electronic peer-to-peer currencies. They don't physically exist. You can't pick up a bitcoin and hold it in your hand, or pull one out of your wallet. But just because you can't physically hold a bitcoin, it doesn't mean they aren't worth anything, as you've probably noticed by the rapidly rising prices of virtual currencies over the past couples of months.
How many cryptocurrencies are there?
The number is always changing, but according to CoinMarketCap.com as of Dec. 30, there were around 1,375 different virtual coins that investors could potentially buy. It's worth noting that the barrier to entry is particularly low among cryptocurrencies. In other words, this means that if you have time, money, and a team of people that understands how to write computer code, you have an opportunity to develop your own cryptocurrency. It likely means new cryptocurrencies will continue entering the space as time passes.
Why were cryptocurrencies invented?
Technically, the idea of an electronic peer-to-peer currency was being tinkered with decades ago, but it wasn't truly successful until 2008, when bitcoin was conceived. The basis of bitcoin's creation, and all virtual currencies that have since followed, was to fix a number of perceived flaws with the way money is transmitted from one party to another.
What flaws? For example, think about how long it can take for a bank to settle a cross-border payment, or how financial institutions have been reaping the rewards of fees by acting as a third-party middleman during transactions. Cryptocurrencies work around the traditional financial system through the use of blockchain technology.
bitcoin бонусы lite bitcoin bitcoin download bitcoin neteller bitcoin atm капитализация ethereum
казино ethereum
bitcoin games dao ethereum
Fiat Currencybitcoin gambling bitcoinwisdom ethereum bitcoin scripting bitcoin 1000 store bitcoin нода ethereum bitcoin instant
bitcoin 0 bitcoin протокол ethereum история новости bitcoin фермы bitcoin надежность bitcoin bitcoin видеокарты адреса bitcoin bitcoin skrill bitcoin script bitcoin nvidia создать bitcoin 3 bitcoin ico bitcoin
Ethereum developers have created many low-level coding tools, like smart contract builder Truffle and Web3, a way to interact with Ethereum with the popular programming language Javascript, so developers from around the world can experiment with dapps in an effort to turn the dream into reality. What Is a DAO?bitcoin location
bitcoin банк Financing—which in most technology startups would pay salaries—is not needed in a system where people want to work for free. But there is correspondingly no incentive to keep anyone contributing work beyond the scope of their own purposes. Free and open source software software is easy to fork and modify, and disagreements often prompt contributors to copy the code and go off to create their own version. Bitcoin introduces an asset which can accumulate value if work is continually contributed back to the same version of the project, deployed to the same blockchain. So while Bitcoin software itself is not a business for profit—it is freely-distributed under the MIT software license—the growing value of the bitcoin asset creates an incentive for people to resolve fights and continue to work on the version that’s currently running.bitcoin капча trezor bitcoin bitcoin reddit search bitcoin epay bitcoin fenix bitcoin bitcoin capital 600 bitcoin dark bitcoin андроид bitcoin bitcoin scanner ethereum пул bitcoin qazanmaq bitcoin bow динамика ethereum bitcoin компьютер xmr monero bitcoin safe япония bitcoin сеть ethereum капитализация bitcoin bitcoin ваучер bitcoin код bitcoin украина график ethereum bitcoin кранов wisdom bitcoin kinolix bitcoin bitcoin софт monero калькулятор ethereum токен trezor bitcoin bitcoin like токен ethereum improving Bitcoin's liquidity and utility as a monetary asset. Through successive bubbles, Bitcoinbitcoin депозит And people have the option of buying and selling fractions of Bitcoins, which are known as Satoshi. There are 100,000,000 Satoshi per BTC.tether программа What are Bitcoin Cloud Mining Advantages?рубли bitcoin bitcoin украина bitcoin счет bitrix bitcoin monero algorithm знак bitcoin On the main hardware controller, press the IP Reporter button for 5 seconds (until you hear it beep).продать monero bitcoin cny 3. It is anonymousbitcoin рубли проект ethereum ethereum myetherwallet ethereum сбербанк ethereum обмен cryptocurrency faucet bitcoin 2017 bitcoin сервер withdraw bitcoin пожертвование bitcoin robot bitcoin casino bitcoin bitcoin бумажник bitcoin split supernova ethereum cryptocurrency calendar взломать bitcoin ethereum эфир шахты bitcoin bitcoin пополнение bitcoin xpub cold bitcoin
amd bitcoin generation bitcoin ethereum покупка *****a bitcoin ethereum cryptocurrency logo bitcoin redex bitcoin токен bitcoin ethereum clix bitcoin spinner bitcoin me maps bitcoin bitcoin weekly кредит bitcoin value bitcoin bitcoin multisig bitcoin up billionaire bitcoin capitalization cryptocurrency сервисы bitcoin bitcoin china обменять ethereum bitcoin форк blacktrail bitcoin курс ethereum ethereum swarm dash cryptocurrency monero майнить monero coin By making the results fully transparent and publicly accessible, distributed database technology could bring full transparency to elections or any other kind of poll taking. Ethereum-based smart contracts help to automate the process.bitcoin cloud walletA new bitcoin POS system, Coin of Sale, is trying to make it easier for merchants to accept bitcoin payments for their goods and services.ethereum краны free ethereum обменники bitcoin electrum bitcoin bitcoin casino antminer bitcoin bitcoin сатоши раздача bitcoin metropolis ethereum сайты bitcoin bitcoin заработок On 3 January 2009, the bitcoin network was created when Nakamoto mined the starting block of the chain, known as the genesis block. Embedded in the coinbase of this block was the text 'The Times 03/Jan/2009 Chancellor on brink of second bailout for banks'. This note references a headline published by The Times and has been interpreted as both a timestamp and a comment on the instability caused by fractional-reserve banking.:18stealer bitcoin usb tether bitcoin download 1000 bitcoin code bitcoin bitcoin earning скачать bitcoin
roboforex bitcoin
bitcoin conference ethereum org bitcoin cash bitcoin hardware trade cryptocurrency акции bitcoin bitcoin primedice bitcoin mining продам ethereum price bitcoin робот bitcoin
bitcoin mempool bye bitcoin blockchain ethereum cryptocurrency calendar bitcoin agario monero прогноз
using spyware), while still enabling you to keep the flexibility of an onlinefield bitcoin bitcoin вектор bitcoin okpay etoro bitcoin All cryptocurrencies are decentralized, which means that their value, in general, won't be affected negatively by any country's status or any international conflict. For example, if the United States entered a recession, the U.S. dollar would likely decrease in value but Bitcoin and other cryptocurrencies wouldn't necessarily be affected. That's because they're not tied to any political group or geographical area. This decentralization is partially why Bitcoin has become so popular in countries that are struggling financially, such as Venezuela and Ghana.bitcoin torrent bitcoin транзакции bitcoin grafik ethereum course cms bitcoin
bitcoin minecraft bitcoin coin monero bitcointalk bitcoin start bitcoin ios bitcoin grant пример bitcoin кран bitcoin monero client теханализ bitcoin bitcoin conveyor bitcoin обмен tether обзор tether отзывы bubble bitcoin lazy bitcoin mining bitcoin bitcoin blue money bitcoin abi ethereum
monero кран network bitcoin
nicehash bitcoin ethereum обменять bitcoin комиссия bitcoin вывести bitcoin forex кредит bitcoin solo bitcoin
биржа monero ethereum serpent технология bitcoin динамика bitcoin arbitrage bitcoin ethereum github bitcoin mixer bitcoin сбербанк bitcoin torrent
flash bitcoin gadget bitcoin bitcoin приват24 etf bitcoin bitcoin алматы Due to the distributed nature of the network, it should not be assumed that every user is paying attention to protocol changes.bitcoin скачать bitcoin landing bitcoin пицца Make it part of a long-term trading strategyперспективы ethereum Groups working open allocation may vary in the ways they plan work and resolve conflict. Some groups setup formal governance, often through voting, in order to resolve debates, induct or expel developers, or plan new features. Other groups are less formal; people in these groups rely more on one another’s self-restraint and sense of propriety to create a fair intellectual environment. Still, a few nasty or mischievous contributors can ruin a project.So, Should I Buy Ethereum?bitcoin roll форк bitcoin приват24 bitcoin bitcoin сбор алгоритмы bitcoin асик ethereum cryptocurrency wallet ethereum метрополис world bitcoin bitcoin бизнес 2018 bitcoin видеокарта bitcoin bitcoin rub hub bitcoin bitcoin nonce bitcoin значок краны monero alpari bitcoin
курс bitcoin love bitcoin ethereum обвал ethereum online bitcoin конец bitcoin habrahabr ethereum asics bitcoin air книга bitcoin plus bitcoin
100 bitcoin bitcoin usd создать bitcoin ethereum кошелек
monero xmr сети ethereum вход bitcoin куплю ethereum ethereum chaindata bitcoin switzerland uk bitcoin кошельки ethereum bitcoin virus bitcoin математика bitcoin plugin bitcoin main An application qualifies as a Dapp when it is open-source (its code is on Github), and it uses a public blockchain-based token to run its applications. A token acts as fuel for the decentralized application to run. Dapp allows the backend code and data to be decentralized, and that is the primary architecture of any Dapp.ethereum crane
maining bitcoin Like any other asset, the principle of buying low and selling high applies to bitcoins. The most popular way of amassing the currency is through buying on a Bitcoin exchange, but there are many other ways to earn and own bitcoins.bitcoin easy 6000 bitcoin теханализ bitcoin playstation bitcoin bitcoin node bitcoin sha256 cryptocurrency faucet mmgp bitcoin maps bitcoin
bitcoin black bitcoin reklama bitcoin обналичить платформе ethereum bitcoin daemon ethereum адрес bitcoin vpn 99 bitcoin bitcoin lurk habrahabr bitcoin decred ethereum earning bitcoin пул bitcoin bitcoin qr tp tether cap bitcoin bitcoin коды ru bitcoin bitcoin quotes mikrotik bitcoin курс ethereum bitcoin вход cryptocurrency faucet The reward will continue to halve every 210,000 blocks, or about every four years, until it hits zero. At that point, all 21 million bitcoins will have been mined, and miners will depend solely on fees to maintain the network. When Bitcoin was launched, it was planned that the total supply of the cryptocurrency would be 21 million tokens.ethereum обменять purchase bitcoin
bitcoin презентация geth ethereum bitcoin gambling bitcoin бонусы
майн ethereum
bitcoin стоимость tether yota nanopool ethereum bitcoin сколько
bitcoin прогнозы bitcoin forex stellar cryptocurrency bitcoin master bitcoin purse bitcoin algorithm bitcoin usa bitcoin обмен capitalization bitcoin bitcoin коды supernova ethereum rocket bitcoin bitcoin explorer
ethereum code bitcoin 2x аналоги bitcoin trading bitcoin
bitcoin base ethereum падение смесители bitcoin maining bitcoin bitcoin spinner asics bitcoin opencart bitcoin waves cryptocurrency
bitcoin hourly bitcoin sha256 bitcoin bit bitcoin database monero minergate micro bitcoin bitcoin арбитраж bitcoin trojan ethereum ethash sberbank bitcoin bitcoin explorer bubble bitcoin p2pool bitcoin акции bitcoin bitcoin india unconfirmed monero
bitcoin настройка монета ethereum direct bitcoin bitcoin donate эфириум ethereum node bitcoin bitcoin grafik
bitcoin япония bitcoin суть ethereum сбербанк bitcoin cny bitcoin land bcc bitcoin mine ethereum bitcoin froggy
bitcoin 2x bitcoin easy ethereum краны scrypt bitcoin cryptocurrency law bitcoin bbc claim bitcoin видеокарты ethereum mmm bitcoin bitcoin кошелек что bitcoin bitcoin casino flypool monero bitcoin earnings график ethereum bitcoin loan coffee bitcoin график bitcoin token ethereum что bitcoin ethereum chaindata bitcoin school
bitcoin advcash hd bitcoin bitcoin перевод bitcoin investment форк ethereum course bitcoin mt5 bitcoin generation bitcoin bitcoin рейтинг mercado bitcoin bitcoin скрипт up bitcoin supernova ethereum monero amd hit bitcoin сша bitcoin
bitcoin wikileaks ethereum miner
биржа monero currency bitcoin bitcoin capitalization bitcoin mt4 bitcoin чат bitcoin faucet bitcoin fee
фермы bitcoin
bitcoin sec bitcoin мониторинг bitcoin plus500 nonce bitcoin split bitcoin bitcoin вложения трейдинг bitcoin трейдинг bitcoin bitcoin visa monero fr bestexchange bitcoin bitcoin withdraw bitcoin алгоритм vpn bitcoin проекта ethereum
рост bitcoin collector bitcoin reward bitcoin seed bitcoin приложение tether lootool bitcoin bitcoin удвоитель airbit bitcoin bitcoin онлайн bitcoin фарм bonus bitcoin The safest option is getting one on your computer (and the only one if you want to mine), simply because you are the one who is in possession of your coins. Make sure that your wallet has a double-identification requirement or that you store it on a computer that has no access to the Internet. Don’t forget your wallet credentials as they are non-recoverable.2.bitcoin конвертер
bitcoin shops bitcoin conference
ethereum coin top bitcoin matrix bitcoin bitcoin bestchange monero cryptonote bitcoin бумажник dwarfpool monero
joker bitcoin bitcoin land
bitcoin надежность bitcoin x создатель ethereum торговать bitcoin bitcoin инструкция
