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 прогнозы 7 Misconceptions About Bitcoin (November 2020)monero обмен Fungibility i.e., one XMR always equal to one XMR as the origin of each individual moneroj is supposedly untraceable.tether комиссии android tether bitcoin pay bitcoin system bitcoin ваучер monero simplewallet заработок ethereum bitcoin favicon cryptocurrency calendar cryptocurrency wallet логотип bitcoin txid bitcoin
майнеры bitcoin
bitcoin habr ethereum клиент it bitcoin bitcoin анимация ubuntu ethereum майнинг tether fork bitcoin qiwi bitcoin алгоритмы ethereum компиляция bitcoin bitcoin mainer миксер bitcoin
cms bitcoin график bitcoin home bitcoin bitcoin инвестирование bitcoin выиграть kinolix bitcoin сайты bitcoin робот bitcoin ethereum хардфорк free bitcoin
bitcoin xapo ethereum статистика халява bitcoin solidity ethereum
bitcoin vizit bitcoin автосерфинг bitcoin hashrate
bitcoin теханализ the ethereum bitcoin client bitcoin сбербанк bitcoin swiss bitcoin blockstream weekend bitcoin wirex bitcoin cryptocurrency index tether clockworkmod icons bitcoin claim bitcoin cryptocurrency reddit шифрование bitcoin *****a bitcoin master bitcoin prune bitcoin bitcoin china bitcoin get bitcoin landing bitcoin игры tether верификация index bitcoin графики bitcoin bitcoin hardware взлом bitcoin bitcoin slots bitcoin счет ethereum сбербанк bitcoin банк ethereum com bitcoin sberbank is bitcoin red bitcoin putin bitcoin bitcoin purse сети bitcoin ethereum network ethereum биткоин bitcoin cryptocurrency investment bitcoin дешевеет bitcoin
ann monero buying bitcoin cryptocurrency forum bitcoin earn обменник tether proxy bitcoin flappy bitcoin сервера bitcoin форки ethereum bitcoin paper
hack bitcoin
bitcoin pizza bitcoin cms Below is a brief summary of pronouncements made by certain countries. This list was last updated in July 2020.bitcoin оплатить No counterparty risk. If you keep the private key of a bitcoin secret and the transaction has enough confirmations, then nobody can take them from you no matter for what reason, no matter how good the excuse, no matter what.bitcoin icons ethereum асик ETH is digital, global money.bitcoin расчет программа tether майнинга bitcoin bitcoin nachrichten bitmakler ethereum
usd bitcoin bitcoin create bitcoin planet bitcoin change usb tether bitcoin ротатор
bitcoin trojan ubuntu bitcoin monero майнить бесплатный bitcoin cryptocurrency forum bitcoin миллионеры bitcoin mine bitcoin xl bitcoin 100 get bitcoin использование bitcoin bitcoin alliance Let TX be the block's transaction list, with n transactions. For all i in 0...n-1, set S = APPLY(S,TX). If any application returns an error, or if the total gas consumed in the block up until this point exceeds the GASLIMIT, return an error.ethereum mine bitcoin black 6000 bitcoin bitcoin баланс decred ethereum
live bitcoin clicks bitcoin moon bitcoin
ethereum transaction bitcoin ledger bitcoin earn bitcoin ключи
equihash bitcoin сайт ethereum
Of all cryptocurrencies, Bitcoin remains dominant with a combined market capitalization of over 210 million USD at the time of writing – with a circulation of approximately 18 million.asrock bitcoin simplewallet monero electrodynamic tether
bitcoin today go ethereum card bitcoin bitcoin qt new cryptocurrency bitcoin birds se*****256k1 ethereum
Main article: Hardware walletdifficulty monero ethereum картинки bubble bitcoin
bitcoin loan bitcoin atm обсуждение bitcoin ethereum coin bitcoin 9000 bitcoin зарегистрироваться сложность bitcoin mt5 bitcoin field bitcoin биржа monero пример bitcoin bitcoin earnings кошелек ethereum golden bitcoin best bitcoin bitcoin окупаемость bitcoin bounty pizza bitcoin amazon bitcoin
ethereum 1070 bitcoin froggy microsoft ethereum coins bitcoin сети bitcoin bitcoin видеокарта bitcoin зебра bitcoin utopia bitcoin депозит заработать monero адрес bitcoin de bitcoin bitcoin like обменники bitcoin ethereum статистика bitcoin rotator bitcoin монета habr bitcoin r bitcoin titan bitcoin баланс bitcoin bitcoin информация bitcoin знак Several deep web black markets have been shut by authorities. In October 2013 Silk Road was shut down by U.S. law enforcement leading to a short-term decrease in the value of bitcoin. In 2015, the founder of the site was sentenced to life in prison. Alternative sites were soon available, and in early 2014 the Australian Broadcasting Corporation reported that the closure of Silk Road had little impact on the number of Australians selling drugs online, which had actually increased. In early 2014, Dutch authorities closed Utopia, an online illegal goods market, and seized 900 bitcoins. In late 2014, a joint police operation saw European and American authorities seize bitcoins and close 400 deep web sites including the illicit goods market Silk Road 2.0. Law enforcement activity has resulted in several convictions. In December 2014, Charlie Shrem was sentenced to two years in prison for indirectly helping to send $1 million to the Silk Road drugs site, and in February 2015, its founder, Ross Ulbricht, was convicted on drugs charges and faces a life sentence.bitcoin get nvidia bitcoin For many, investing in Ethereum has proven to be a great decision. Back in March 2017, the price of one Ether was $30. The price as of March 2018 is $750. In that one-year period, the value of ETH went up 25 times, or 2500%. So, if you had invested $1000 into Ethereum back in March 2017, right now you would have about $25,000 in ETH.Litecoin uses a consensus model called Proof-of-Work, or PoW for short. Although Bitcoin also uses PoW, there are some slight differences between the two.bitcoin land ethereum биржа microsoft bitcoin It can be useful for an investor to conduct research into the development of a hot wallet before downloading and using that service. Developers have varying degrees of expertise, various commitments to security and privacy, and different priorities in mind when creating their wallets.bitcoin xl bitcoin видеокарты How does blockchain work?currency bitcoin reddit ethereum bitcoin btc accepts bitcoin bitcoin status monero simplewallet bitcoin wmx цена ethereum 999 bitcoin avto bitcoin платформы ethereum bitcoin bot bitcoin exchanges
2016 bitcoin bitcoin google акции bitcoin balance bitcoin bitcoin коды bitcoin earning ethereum курс ethereum explorer сервера bitcoin cryptocurrency charts rotator bitcoin bitcoin котировки bitcoin nachrichten обновление ethereum bitcoin суть bitcoin баланс ico ethereum bitcoin курс bitcoin airbit tether верификация bitcoin деньги nicehash monero bitcoin рухнул bitcoin обналичить bitcoin видеокарты hashrate ethereum
ethereum краны ico cryptocurrency кошелек monero будущее ethereum bitcoin форумы bitcoin bitcointalk майнинга bitcoin the ethereum лучшие bitcoin bitcoin проблемы group bitcoin bitcoin change bitcoin инструкция bitcoin goldman block bitcoin dwarfpool monero
bitcoin half monero wallet bitcoin создать forum ethereum waves bitcoin tether android bitcoin bcc
bitcoin карта bitcoin q love bitcoin bitcoin mine bitcoin blender etoro bitcoin bitcoin обвал The HalveningBut innovation happens at the edge. Today, Venezuelans are adopting and experimenting with Bitcoin to evade hyperinflation and strict financial controls. Speculation, fraud, and greed in the cryptocurrency and blockchain industry have overshadowed the real, liberating potential of Satoshi Nakamoto’s invention. For people living under authoritarian governments, Bitcoin can be a valuable financial tool as a censorship-resistant medium of exchange.data bitcoin bitcoin блоки верификация tether abc bitcoin ethereum serpent bitcoin zona
bitcoin biz бизнес bitcoin mainer bitcoin ethereum биткоин vpn bitcoin titan bitcoin bitcoin реклама bonus bitcoin переводчик bitcoin bitcoin форекс кредиты bitcoin ethereum добыча bitcoin clouding скачать bitcoin bitcoin количество
wired tether bitcoin co bitcoin разделился node bitcoin bitcoin принцип mac bitcoin эфириум ethereum bitcoin co кошель bitcoin кран ethereum bitcointalk monero настройка monero bitcoin ios bot bitcoin ethereum raiden bitcoin check пул ethereum партнерка bitcoin bcc bitcoin
bitcoin майнить download bitcoin надежность bitcoin bitcoin check значок bitcoin claymore monero платформа bitcoin bitcoin china
анонимность bitcoin bitcoin loan alpari bitcoin monero js monero *****u bitcoin explorer ethereum torrent ethereum получить
bitcoin auto wallets cryptocurrency график ethereum hub bitcoin bitcoin eth халява bitcoin ava bitcoin робот bitcoin bitcoin ocean bot bitcoin roll bitcoin
вывод ethereum bitcoin logo bitcoin invest monero cryptonote bitcoin security bitcoin приложение обвал ethereum bitcoin lite ethereum raiden обменник bitcoin bitcoin покер kaspersky bitcoin 600 bitcoin bitcoin казино bitcoin captcha rpc bitcoin protocol bitcoin добыча bitcoin pool monero обзор bitcoin apple bitcoin adc bitcoin clame bitcoin bitcoin реклама bitcoin bcc bitcoin bitrix cryptocurrency charts bitcoin icons сайте bitcoin ютуб bitcoin bitcoin заработок mikrotik bitcoin plus bitcoin bitcoin bitrix кредиты bitcoin bitcoin exe hacking bitcoin сбор bitcoin bitcoin easy bitcoin криптовалюта bitcoin world ethereum php пул monero bitcoin dance advcash bitcoin bitcoin forbes
депозит bitcoin adbc bitcoin monero xeon
wallpaper bitcoin lealana bitcoin bitcoin mmm куплю ethereum email bitcoin Bitcoin bites the bullet by letting its exchange rate float freely, opting for a system design with no entity tasked with managing a peg and with sovereign monetary policy. Volatility and future exchange rate uncertainty is the price that users pay for its desirable qualities — scarcity and permissionless transacting. The bullet bitcoin bites is an unstable exchange rate, but in return it frees itself from any third party and wins an independent monetary policy. A decent trade.прогноз ethereum Want to buy some Ethereum? It's common to mix up Ethereum and ETH. Ethereum is the blockchain and ETH is the primary asset of Ethereum. ETH is what you're probably looking to buy. More on Ethereum.ethereum контракт exchanges bitcoin monero форк ethereum покупка bitcoin demo
payoneer bitcoin
bitcoin лопнет moto bitcoin bitcoin bloomberg bitcoin account bitcoin rub
charts bitcoin antminer bitcoin wallpaper bitcoin ethereum complexity ethereum chart
кликер bitcoin 33 bitcoin bitcoin fund linux bitcoin exmo bitcoin доходность ethereum кран monero bitcoin xt blue bitcoin bitcoin список bitcoin asic takara bitcoin
trade cryptocurrency боты bitcoin bitcoin бонусы смесители bitcoin ethereum валюта сша bitcoin bitcoin payeer rx470 monero arbitrage cryptocurrency
decred ethereum bitcoin hashrate хабрахабр bitcoin 999 bitcoin форумы bitcoin habrahabr ethereum invest bitcoin bitcoin count currency bitcoin
bitcoin trezor протокол bitcoin captcha bitcoin
bitcoin transaction bitcoin wallpaper ethereum claymore bitcoin hardfork tether майнинг bitcoin tails
ethereum blockchain roll bitcoin ethereum покупка monero майнинг pos ethereum bitcoin game я bitcoin bitcoin free chvrches tether ethereum erc20 пожертвование bitcoin
bitcoin bloomberg
carding bitcoin panda bitcoin buy tether андроид bitcoin ethereum ubuntu перспективы ethereum ethereum форк pools bitcoin moon ethereum bitcoin frog фермы bitcoin стоимость bitcoin playstation bitcoin ropsten ethereum калькулятор monero ethereum raiden видеокарты bitcoin bitcoin расшифровка
bitcoin официальный
bitcoin автосерфинг займ bitcoin bitcoin кошелька amd bitcoin facebook bitcoin bitcoin grant создатель ethereum 1 ethereum adc bitcoin
bitcoin markets eDonkeyfoto bitcoin pay bitcoin
1 ethereum bitcoin телефон
tether clockworkmod difficulty ethereum bitcoin bubble multiplier bitcoin goldmine bitcoin cryptocurrency dash bitcoin hacker monero nvidia bitcoin uk ethereum токены скрипт bitcoin php bitcoin
claim bitcoin ethereum parity bitcoin prune bitcoin elena
bitcoin advcash bitcoin scan ethereum studio bitcoin кошельки bitcoin india bitcoin journal miningpoolhub monero bitcoin mining tokens ethereum daemon monero mercado bitcoin sberbank bitcoin взлом bitcoin
x2 bitcoin tp tether ethereum контракты bitcoin fast bitcoin easy bitcoin капитализация ethereum биржа Unlike Bitcoin, gold does have non-monetary industrial use, but only about 10% of its demand is industrial. The other 90% is based on bullion and jewelry demand, for which buyers view gold as a store of wealth, or a display of beauty and wealth, because it happens to have very good properties for it in the sense that it looks nice, doesn’t rust, is very rare, holds a lot of value in a small space, is divisible, lasts forever, and so forth. If gold’s demand for jewelry, coinage, and bars were to ever decrease substantially and structurally, leaving its practical industrial usage as its primary demand, the existing supply/demand balance would be thrown out and this would likely result in a much lower price.ethereum купить bitcoin транзакция The financial sector has captured a larger percentage of the economy over time because there is greater demand for financial services in a world in which money is constantly impaired. Stocks, corporate bonds, treasuries, sovereign bonds, mutual funds, equity ETFs, bond ETFs, levered ETFs, triple levered ETFs, fractional shares, mortgage-backed securities, CDOs, CLOs, CDS, CDX, synthetic CDS/CDX, etc. All of these products represent the financialization of the economy, and they become more relevant (and in greater demand) when the monetary function is broken.vpn bitcoin pixel bitcoin bitcoin conference Going Mainstream with Central Bank Digital Currency (CBDC)bitcoin вложения будущее ethereum bitcoin cfd bitcoin 99 купить bitcoin ethereum dao bitcoin таблица
email bitcoin bitcoin free bitcoin tor bitcoin register tether майнинг майнинга bitcoin bitcoin evolution bitcoin antminer panda bitcoin india bitcoin bitcoin puzzle gemini bitcoin bitcoin бесплатные ethereum blockchain хардфорк ethereum
We publish unbiased product reviews; our opinions are our own and are not influenced by payment we receive from our advertising partners. Learn more about how we review products and read our advertiser disclosure for how we make money.bitcoin конвертер bitcoin эфир oil bitcoin ethereum linux up bitcoin
bitcoin seed bitcoin hype bitcoin buying earn bitcoin coinder bitcoin bitcoin транзакция bitcoin conveyor терминал bitcoin
daily bitcoin tether mining bitcoin экспресс bitcoin hashrate ethereum обмен bitcoin service бесплатные bitcoin ethereum node
bitcoin создать rocket bitcoin bitcoin транзакция продать bitcoin
bitcoin world bitcoin parser
bitcoin drip The system of checks and balances, with four stakeholders, is detailed belowbitcoin p2p nicehash monero bitcoin видеокарта bitcoin etf Beacon Chain: it acts as the 'bridge' between shard chains and the main chain (the equivalent of the existing ETH 1.0 chain), which will provide staking rewards. The Beacon Chain will record historical reference points from shard chains.alien bitcoin bitcoin etf bitmakler ethereum bitcoin банкнота black bitcoin market bitcoin bitcoin ммвб андроид bitcoin ethereum serpent ethereum rub bitcoin froggy робот bitcoin monero fr bitcoin mastercard fire bitcoin bitcoin основатель
bitcoin today master bitcoin сайты bitcoin bitcoin растет ethereum обменять
торги bitcoin
bitcoin minecraft bag bitcoin 1024 bitcoin
bitcoin продажа bitcoin daemon bitcoin blockchain trade cryptocurrency bitcoin value bitcoin рост bitcoin stealer
mining cryptocurrency bitcoin instant
стратегия bitcoin direct bitcoin bitcoin server monero hashrate
alien bitcoin coinmarketcap bitcoin
ethereum dag майнить ethereum bitcoin community ethereum pools login bitcoin bitcoin alien ethereum bonus claim bitcoin bitcoin traffic bitcoin crypto
monero сложность capitalization bitcoin connect bitcoin monero pro bitcoin pdf ethereum mining bitcoin phoenix kraken bitcoin generator bitcoin lazy bitcoin se*****256k1 bitcoin график bitcoin алгоритмы ethereum tracker bitcoin bitcoin alliance bitcoin wiki ethereum продать bitcoin circle bitcoin капитализация Type of wallet: Cold walletpow bitcoin bitcoin картинки metal bitcoin hashrate bitcoin accepts bitcoin регистрация bitcoin spots cryptocurrency wmz bitcoin bitcoin страна полевые bitcoin blocks bitcoin bitcoin компьютер json bitcoin bitcoin коды email bitcoin cronox bitcoin bitcoin flapper пулы monero система bitcoin bitcoin пулы accepts bitcoin It can be tricky for newcomers to wrap their head around what sort of proposals are more likely to be accepted for Bitcoin because there are plenty of unwritten rules regarding protocol changes. Some of these rules are more on the philosophical side, some are more on the engineering and security side, and some are a blend of the two.token ethereum bitcoin 2000 ethereum investing
bitcoin webmoney ledger bitcoin bitcoin agario mooning bitcoin topfan bitcoin bye bitcoin bitcoin store mercado bitcoin earn bitcoin bitcoin avalon bitcoin пополнение ethereum claymore bitcoin phoenix приложение tether bitcoin софт carding bitcoin nicehash bitcoin bitcoin сколько monero nvidia bitcoin трейдинг bitcoin anonymous bitcoin математика ethereum coins bitcoin game
ферма ethereum новости bitcoin робот bitcoin
statistics bitcoin
system bitcoin ETH is decentralized and global. There's no company or bank that can decide to print more ETH, or change the terms of use.bitcoin market bitcoin алгоритм joker bitcoin bitcoin сервера хайпы bitcoin foto bitcoin ethereum transactions new bitcoin cgminer ethereum phoenix bitcoin wallets cryptocurrency расчет bitcoin лучшие bitcoin bitcoin earnings casper ethereum genesis bitcoin bot bitcoin lavkalavka bitcoin форк ethereum bitcoin bitcointalk bitcoin fake bitcoin xyz обмена bitcoin
bitcoin цены bitcoin gadget monero btc bitcoin прогноз broadly accepted store of value, Bitcoin has great potential as a future store of value based ondouble bitcoin bonus bitcoin nanopool ethereum bitcoin half abi ethereum bitcoin q валюты bitcoin ethereum supernova робот bitcoin koshelek bitcoin оплатить bitcoin покер bitcoin bitcoin media bootstrap tether monero сложность
bitcoin pools reddit ethereum
ethereum github bitcoin de
комиссия bitcoin
bitcoin 99 hit bitcoin bitcoin motherboard tether android platinum bitcoin 1 monero зарегистрировать bitcoin кошелька ethereum elena bitcoin ethereum os bistler bitcoin monero xeon ethereum faucet
bitcoin счет bitcoin euro poloniex monero fire bitcoin monero proxy r bitcoin bitcoin xl портал bitcoin bitcoin инструкция
cryptocurrency bitcoin количество инструкция bitcoin free bitcoin primedice bitcoin bitcoin что bitcoin hyip ethereum serpent bitcoin fees сбербанк bitcoin bitcoin abc bitcoin accelerator se*****256k1 bitcoin bitcoin зарегистрировать
difficulty bitcoin
lite bitcoin bitcoin hyip buy tether исходники bitcoin bitcoin 100 bitcoin фарм
bitcoin suisse bitcoin mixer капитализация bitcoin создатель bitcoin
bitcoin update
bitcoin продажа cryptocurrency mining in bitcoin dogecoin bitcoin ethereum parity 5 bitcoin bitcoin payment pow bitcoin balance bitcoin BlockchainOnly works for Bitcoin
