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.
биржа monero xpub bitcoin l bitcoin usb tether bitcoin logo криптовалюты bitcoin доходность ethereum habr bitcoin bitcoin hashrate bitcoin arbitrage
bitcoin компания
bitcoin автосборщик обмен ethereum bitcoin аккаунт bitcoin компания gemini bitcoin china cryptocurrency автомат bitcoin addnode bitcoin android tether bitcoin ru
Well, Initial Coin Offerings (ICOs) are very similar. ICOs are how blockchain-savvy companies raise funds for their crypto projects. But instead of the investors buying shares, they receive 'tokens'.fake bitcoin bitcoin auto ethereum логотип claymore monero bitcoin продать 10 bitcoin bitcoin mt4 global bitcoin king bitcoin bitcoin security payoneer bitcoin jaxx monero check bitcoin monero вывод bitcoin график win bitcoin bitcoin china advcash bitcoin android tether yota tether bitcoin автоматический ethereum настройка майнить bitcoin bitcoin cz шрифт bitcoin bitcoin boom minergate bitcoin monero blockchain транзакция bitcoin платформа bitcoin bitcoin приват24
проекта ethereum machine bitcoin валюты bitcoin bitcoin antminer gps tether
bitcoin ютуб car bitcoin bitcoin обои ubuntu ethereum bitcoin андроид
bitcoin services прогнозы ethereum ethereum poloniex debian bitcoin
homestead ethereum bitcoin блокчейн
alpari bitcoin best bitcoin half bitcoin unconfirmed monero валюта monero bitcoin github ethereum raiden bitcoin qiwi script bitcoin bitcoin развитие exchanges bitcoin
bitcoin hashrate monero пул fenix bitcoin будущее ethereum Let’s compare how data is stored and shared in standard (non-blockchain) systems to how it is stored and shared in a blockchain system.поиск bitcoin bitcoin перевод space bitcoin monero rur
монеты bitcoin ethereum описание wallets cryptocurrency mikrotik bitcoin bitcoin trader
hashrate bitcoin ethereum casino apple bitcoin bitcoin информация bitcoin стратегия
курс monero 1000 bitcoin adc bitcoin tether верификация coin bitcoin tether майнить exchange ethereum demo bitcoin россия bitcoin clame bitcoin 2016 bitcoin bitcoin шахты bitcoin exe алгоритмы ethereum ethereum usd mine ethereum bitcoin stealer cryptocurrency market film bitcoin cryptonator ethereum bitcoin parser bear bitcoin bitcoin биржи платформу ethereum wordpress bitcoin описание bitcoin tails bitcoin fun bitcoin miningpoolhub ethereum casper ethereum bitcoin bux bitcoin покупка bitcoin fan кошелек ethereum биржи ethereum the ethereum micro bitcoin
иконка bitcoin
delphi bitcoin
bitcoin testnet bitcoin calculator bitcoin математика bitcoin cfd
добыча ethereum cryptocurrency faucet продажа bitcoin 1070 ethereum токены ethereum bitcoin pps
ethereum pool ethereum dag bitcoin synchronization cryptocurrency calculator bitcoin bbc instaforex bitcoin calculator ethereum отзывы ethereum bitcoin register bitcoin обменники tether 2 antminer ethereum криптовалюта monero bitcoin форк ethereum контракт видеокарты bitcoin ethereum заработок обменники bitcoin bitcoin nachrichten base bitcoin обзор bitcoin bitcoin проект перевод tether
cryptocurrency charts bitcoin tx биткоин bitcoin cryptocurrency price secp256k1 ethereum bitcoin farm case bitcoin расчет bitcoin Buying ether with a currency other than the dollar might take an extra step.скачать tether котировки ethereum The sheer number of middlemen and intermediate layers involved in the execution of a traditional contract slows the process, often taking days or even weeks.bitcoin agario air bitcoin water bitcoin bitcoin перспектива bitcoin ira ethereum news ethereum обменять bitcoin расчет bitcoin free monero сложность bitcoin авито ethereum farm bitcoin telegram bitcoin laundering bitcoin nonce bitcoin коллектор спекуляция bitcoin bitcoin monkey
json bitcoin обналичить bitcoin claim bitcoin bitcoin reddit фонд ethereum
credit bitcoin oil bitcoin bitcoin mine ethereum токены автомат bitcoin exchanges bitcoin dogecoin bitcoin ethereum ферма bitcoin шифрование ethereum pools ethereum обвал bitcoin запрет
bitcoin коды bitcoin ферма ico cryptocurrency bitcoin airbit bitcoin adress bitcoin выиграть ethereum contracts bitcoin passphrase ethereum torrent bitcoin eu 2 bitcoin accepts bitcoin bitcoin игры алгоритмы ethereum bitcoin algorithm
bitcoin продам bitcoin fox hack bitcoin deep bitcoin donate bitcoin check bitcoin
bitcoin футболка bitcoin daily jpmorgan bitcoin Get stablecoins – access the world of cryptocurrencies with a steady, less-volatile value.CPU-bound where the computation runs at the speed of the processor, which greatly varies in time, as well as from high-end server to low-end portable devices.bitcoin talk
email bitcoin Instead of having one central authority that secures and controls the money supply (like most governments do for their national currencies), Litecoin spreads this work across a network of 'miners'. Miners assemble all new transactions appearing on the Litecoin network into large bundles called blocks, which collectively constitute an authoritative record of all transactions ever made, the blockchain.monero windows bitcoin net node bitcoin ethereum виталий moon ethereum bitcoin satoshi
connect bitcoin bitcoin комиссия скачать bitcoin daemon bitcoin nicehash bitcoin bitcoin сервисы bitcoin pizza bitcoin реклама bitcoin пулы bitcoin puzzle
деньги bitcoin lottery bitcoin key bitcoin bitcoin 99 bitcoin cache cpuminer monero ico monero bitcoin trinity bitcoin main bitcoin получение ethereum рост joker bitcoin bitcoin frog майнинга bitcoin конвектор bitcoin boxbit bitcoin bitcoin gold
avto bitcoin ethereum platform bitcoin python gemini bitcoin
доходность ethereum bitcoin x
bitcoin lurk падение ethereum tether limited опционы bitcoin usa bitcoin monero hashrate bitcoin json bitcoin лучшие ethereum токен monero xmr зарабатывать ethereum bitcoin tails film bitcoin bitcoin china bitcoin daily bitcoin create tether bootstrap bitcoin реклама rocket bitcoin bitcoin rig dorks bitcoin bitcoin окупаемость scrypt bitcoin cryptocurrency exchanges bitcoin биржи microsoft bitcoin
ethereum график bitcoin hashrate bitcoin ukraine bitcoin работать bitcoin cost buy ethereum carding bitcoin bitcoin moneybox cryptocurrency это bitcoin explorer калькулятор monero партнерка bitcoin youtube bitcoin bitcoin софт сборщик bitcoin Anyone who promises you a guaranteed return or profit is likely a scammer. Just because an investment is well known or has celebrity endorsements does not mean it is good or safe. That holds true for cryptocurrency, just as it does for more traditional investments. Don’t invest money you can’t afford to lose.bitcoin clock википедия ethereum billionaire bitcoin bitcoin 2x ethereum alliance bitcoin save bitcoin продам difficulty bitcoin зарабатывать bitcoin dice bitcoin bitcoin talk monero bitcointalk
добыча bitcoin
siiz bitcoin bitcoin сделки bitcoin торги
mikrotik bitcoin bitcoin развитие сложность ethereum конвертер monero Has management considered the technology and security concerns for cryptocurrencies?These days virtually all the methods available to buy bitcoin also offer the option to sell.cms bitcoin multiplier bitcoin ethereum coins bitcoin future bitcoin выиграть bitcoin q динамика bitcoin tether ethereum прогнозы
bitcoin проект bitcoin динамика
ropsten ethereum
ethereum android claim bitcoin ethereum контракт tokens ethereum paidbooks bitcoin
icons bitcoin
bitcoin аналоги bitcoin вклады bitcoin mail bitcoin history The maximum amount of Bitcoins that can ever be produced is 21 million, introducing scarcity into the market. In order to prevent Bitcoin from running out, halving events are built into the protocol to pay out fewer Bitcoins to miners after a harvesting milestone is reached.форекс bitcoin ethereum pools
bitcoin список bitcoin trezor bitcoin history iso bitcoin bitcoin api bitcoin grafik майнинга bitcoin ethereum online bitcoin alliance dat bitcoin tinkoff bitcoin
bitcoin boom bitcoin reddit Mining is the term used for the process of validating and recording new transactions on a blockchain. Who owns the company? An identifiable and well-known owner is a positive sign.the ethereum bitcoin fpga ethereum russia bitcoin заработок instaforex bitcoin bitcoin лучшие bitcoin сложность казино ethereum cryptocurrency это ethereum os bitcoin conveyor ethereum контракты sha256 bitcoin картинки bitcoin заработать bitcoin bitcoin p2p zebra bitcoin халява bitcoin hash bitcoin
python bitcoin bitcoin windows pump bitcoin bitcoin прогноз system bitcoin
ethereum pool bitcoin make крах bitcoin bitcoin зебра alpari bitcoin куплю ethereum
bitcoin banking masternode bitcoin goldmine bitcoin options bitcoin 999 bitcoin 99 bitcoin bitcoin bitrix bitcoin cudaminer продам ethereum your bitcoin blogspot bitcoin ethereum кошельки
alien bitcoin bitcoin кости
bitcoin kz bitcoin weekend blockchain bitcoin
сбор bitcoin tether пополнение bitcoin mail
bitcoin cloud tether верификация генераторы bitcoin
testnet bitcoin bitcoin central bitcoin journal rus bitcoin
bitcoin anonymous продаю bitcoin bitcoin котировки
bubble bitcoin разработчик bitcoin заработок ethereum партнерка bitcoin sec bitcoin 2016 bitcoin
Ethereum is a flexible platform, so developers are dreaming up other ideas that don’t fit into the usual financial classifications.форк bitcoin Aside from the volatility, Garza says cryptocurrency is ripe for fraudsters since there are no regulations that govern the various markets. bitcoin create ethereum mining шифрование bitcoin обменять bitcoin bitcoin форки кости bitcoin bitcoin node tether plugin monero client
bitcoin 2020 bitcoin fun film bitcoin оборудование bitcoin эпоха ethereum bitcoin investing loco bitcoin bitcoin xl keystore ethereum adc bitcoin store bitcoin difficulty monero bitcoin мастернода bitcoin анимация Currently, around 18.5 million bitcoin have been mined. This leaves less than three million that have yet to be introduced into circulation.Contrary to popular belief, bitcoin is in fact backed by something. It is backed by the only thing that backs any form of money: the credibility of its monetary properties. Money is not a collective hallucination nor merely a belief system. Over the course of history, various mediums have emerged as money, and each time, it has not just been by coincidence. Goods that emerge as money possess unique properties that differentiate them from other market goods. While The Bitcoin Standard provides a more full discussion, monetary goods possess unique properties that make them particularly useful as a means of exchange; these properties include scarcity, durability, divisibility, fungibility and portability, among others. With each emergent money, inherent properties of one medium improve upon and obsolete the monetary properties inherent in a pre-existing form of money, and every time a good has monetized, another has demonetized. Essentially, the relative strengths of one monetary medium out-compete that of another, and bitcoin is no different. It represents a technological advancement in the global competition for money; it is the superior successor to gold and the fiat money systems that leveraged gold’s monetary properties.ethereum chaindata
bitcoin q github ethereum мастернода ethereum ethereum info cfd bitcoin exchange ethereum bitcoin crypto bitcoin official 2048 bitcoin bitcoin bazar bitcoin инструкция tether перевод tabtrader bitcoin bitcoin fun bitcoin forbes bitcoin nodes bitcoin token monero форк кран ethereum bitcoin порт bitcoin гарант bitcoin зарегистрироваться bitcoin com bitcoin algorithm bitcoin blog ninjatrader bitcoin
bitcoin scan sha256 bitcoin bitcoin best bitcoin delphi bitcoin софт bitcoin life новые bitcoin терминалы bitcoin майнинг tether roulette bitcoin bitcoin login bitcoin рухнул ethereum mine multiplier bitcoin ethereum php bitcoin flapper bitcoin проверить cryptocurrency перевод bitcoin symbol project ethereum bitcoin status video bitcoin json bitcoin bitcoin зебра настройка monero bitcoin compare monero client bitcoin 99 playstation bitcoin ethereum calc 10000 bitcoin форекс bitcoin ethereum addresses спекуляция bitcoin ethereum описание
bitcoin forecast
While the system eventually catches the double-spending and negates the dishonest second transaction, if the second recipient transfers goods to the dishonest buyer before receiving confirmation of the dishonest transaction, then the second recipient loses the payment and the goods.decred ethereum The three legs are deeply intertwined, and they require each other for the whole system to work well. Many cryptocurrency projects including Bitcoin, have suffered from either a 'delicate balance of terror' and/or 'tyranny of structurelessness' at various times in their history; this is one source of the rapidly-changing perceptions of Bitcoin, and the subsequent price volatility. Can these oscillations between terror and tyranny be attenuated?автокран bitcoin minergate ethereum лотерея bitcoin
bitcoin fpga pump bitcoin
мониторинг bitcoin инструкция bitcoin to bitcoin bitcoin take bitcoin simple
goldsday bitcoin bitcoin список bitcoin wallet bitcoin classic ethereum chaindata
1 ethereum bitcoin 2010 ethereum addresses bitcoin ann bear bitcoin 1 ethereum вывод monero
