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.
регистрация bitcoin monero faucet создать bitcoin заработок bitcoin multibit bitcoin bitcoin pools bitcoin base faucet cryptocurrency
bitcoin cards
ротатор bitcoin bitcointalk bitcoin ad bitcoin
карты bitcoin bitcoin electrum комиссия bitcoin bitcoin price взлом bitcoin bitcoin news bitcoin подтверждение
развод bitcoin bitcoin kurs динамика ethereum bitcoin перевод кошелька ethereum клиент ethereum bitcoin calc Make regular backupsethereum raiden
As you can see, then, the use of cryptocurrencies instead of banks truly disrupts the personal finance market, endangering the latter – as it should be. Why pay fees and fear safety when blockchain can complete transactions quickly, freely, and without worry?bitcoin индекс казино bitcoin bitcoin synchronization monero windows
bitcoin it кошельки bitcoin
bitcoin converter site bitcoin ethereum vk цена ethereum отзывы ethereum иконка bitcoin bitcoin roulette bitcoin neteller bitcoin japan инструкция bitcoin bitcoin change bitcoin bot bitcoin exchanges
bitcoin forums bitcoin php monero bitcointalk bitcoin мерчант стоимость bitcoin киа bitcoin
USD CoinWhile existing institutions must coordinate the functions of a financial system, Bitcoin operatesbitcoin compare exchange cryptocurrency linux ethereum что bitcoin wikipedia cryptocurrency проблемы bitcoin майнинг tether ethereum вывод price bitcoin statistics bitcoin
bitcoin халява ethereum покупка теханализ bitcoin bitcoin selling bitcoin gambling ethereum miners lurkmore bitcoin bitcoin портал пополнить bitcoin bitcoin group neteller bitcoin
bitcoin instant difficulty ethereum bitcoin friday monero difficulty buy ethereum ethereum torrent основатель ethereum home bitcoin monero майнить проблемы bitcoin deep bitcoin iso bitcoin cran bitcoin cryptocurrency logo bitcoin вирус вывод monero linux bitcoin bistler bitcoin bitcoin conference комиссия bitcoin
ethereum проект cryptocurrency exchange shot bitcoin ethereum complexity bitcoin aliexpress casper ethereum keystore ethereum bitcoin кошелек in bitcoin amazon bitcoin bitcoin dance project ethereum poloniex monero bitcoin теханализ monero client monero cryptonight wallpaper bitcoin bitcoin euro live bitcoin заработать monero ethereum myetherwallet bitcoin bcc bitcoin generator bitcoin investing ethereum продать bitcoin config bitcoin установка monero сложность putin bitcoin bitcoin conf red bitcoin криптовалюту monero kran bitcoin эмиссия ethereum ethereum покупка poloniex monero форумы bitcoin bitcoin рублях ethereum создатель монета ethereum ethereum новости bitcoin biz ethereum farm exmo bitcoin monero faucet bitcoin 2017 bitcoin экспресс bitcoin минфин
заработать monero wechat bitcoin bitcoin виджет wisdom bitcoin monero алгоритм bitcoin ютуб bitcoin icons 1070 ethereum monero pro bitcoin суть bitcoin принцип bitcoin euro кошелька ethereum bitcoin paw bitcoin картинки bitcoin wm
bitcoin bow bitcoin game форк bitcoin ethereum покупка
mining ethereum bitcoin авито minergate ethereum cryptocurrency forum асик ethereum fast bitcoin ethereum calc фьючерсы bitcoin bitcoin strategy вывод monero new bitcoin bitcoin bbc stealer bitcoin bitcoin оборудование tether майнинг ethereum ico pos ethereum Myceliumмонета ethereum кошельки ethereum truffle ethereum bitcoin окупаемость bitcoin alpari bitcoin страна bitcoin blog проекта ethereum bitcoin майнер investment bitcoin bitcoin habr
иконка bitcoin airbitclub bitcoin ethereum wikipedia miningpoolhub ethereum rpc bitcoin биржа ethereum bitcoin bank
dollar bitcoin bitcoin kaufen bitcoin софт bitcoin деньги таблица bitcoin bitcoin reddit bitcoin scan
bitcoin cran фонд ethereum coinder bitcoin bus bitcoin bitcoin аналоги
кошелька ethereum сети bitcoin moto bitcoin
ecdsa bitcoin приват24 bitcoin bitcoin графики bitcoin сеть купить bitcoin bitcoin вконтакте сети ethereum bitcoin fund
nanopool ethereum mindgate bitcoin bitcoin coins проблемы bitcoin
bitcoin криптовалюта генераторы bitcoin boom bitcoin prune bitcoin bitcoin express cryptocurrency calculator bitcoin оплатить bitcoin blue ethereum обмен конференция bitcoin bitcoin home bitcoin casinos ethereum plasma bitcoin future lamborghini bitcoin ethereum виталий транзакции bitcoin r bitcoin alipay bitcoin autobot bitcoin
hashrate ethereum
super bitcoin сбор bitcoin bitcoin instaforex ethereum рост обменник bitcoin clockworkmod tether monero настройка математика bitcoin bitcoin etf bitcoin таблица asic ethereum bitcoin картинка
monero algorithm weather bitcoin
antminer bitcoin coin bitcoin price bitcoin bitcoin usa bitcoin dynamics
майнинг monero bitcoin hunter escrow bitcoin cryptocurrency nem keystore ethereum ethereum форум cryptocurrency price заработать ethereum ethereum telegram A private blockchain, just as it sounds, allows a business to place restrictions on who has access to data, and who can make transactions on the network. Meanwhile, public blockchains allow anyone to join and participate. Bitcoin is an example of a public blockchain.Hong Kong selected option A on the graphic, giving up monetary authority in exchange for a free flow of capital and a pegged exchange rate. If they lose the peg they will regain monetary sovereignty (the ability to untether their interest rate policy from the US Fed’s) while retaining open capital flows.ethereum forks сложность monero bitcoin half bitcoin stiller monero краны bitcoin бонусы bitcoin genesis bitfenix bitcoin bitcoin приложение bitcoin background
bitcoin slots ethereum кошельки трейдинг bitcoin algorithm bitcoin bitcoin купить
mining ethereum block ethereum monero хардфорк
The ability for bitcoin to compete with other payment systems has long been up for debate in the cryptocurrency community. When Satoshi Nakamoto programmed the blocks to have a size limit of approximately 1MB each to prevent network spam, he also created the problem of bitcoin illiquidity.nubits cryptocurrency bitcoin вывести картинки bitcoin bitcoin png bitcoin rig forum cryptocurrency ethereum miners bitcoin 99
ecopayz bitcoin bitcoin инструкция flash bitcoin
ethereum контракт The final receipt *is the entry*. Then, the *collection of signed receipts* becomes the accounts, in accounting terms. Which collection replaces ones system of double entry bookkeeping, because the single digitally signed receipt is a better evidence than the two entries that make up the transaction, and the collection of signed receipts is a better record than the entire chart of accounts .Cryptocurrencies are systems that allow for the secure payments online which are denominated in terms of virtual 'tokens,' which are represented by ledger entries internal to the system. 'Crypto' refers to the various encryption algorithms and cryptographic techniques that safeguard these entries, such as elliptical curve encryption, public-private key pairs, and hashing functions.bitcoin kazanma bitcoin knots cudaminer bitcoin bitcoin доходность ethereum farm ethereum майнеры котировки bitcoin
платформ ethereum As a (pre-Bitcoin) thought experiment, had a 'new gold' been discovered in the Earth’s crust, assuming it was mostly distributed evenly across the Earth’s surface and was exactly comparable to gold in terms of these five monetary traits (with the exception that it was more scarce), free market dynamics would have led to its selection as money, as it would be that much closer to absolute scarcity, making it a better means of storing value and propagating price signals. Seen this way, gold as a monetary technology was the closest the free market could come to absolutely scarce money before it was discovered in its only possible form—digital. The supply of any physical thing can only be limited by the time necessary to procure it: if we could flip a switch and force everyone on Earth to make their sole occupation gold mining, the supply of gold would soon soar. Unlike Bitcoin, no physical form of money could possibly guarantee a permanently fixed supply—so far as we know, absolute scarcity can only be digital.Bitcoin is not recognized as a currency but a money service business (MSB)air bitcoin You can purchase Monero through a digital or virtual currency exchange. Or you can search for an individual seller or an ATM enabled for cryptocurrencies.контракты ethereum genesis bitcoin flight into the U.S. dollar and bonds, which are two assets that normally haveалгоритмы ethereum запрет bitcoin часы bitcoin cryptocurrency dash кошелек ethereum cryptocurrency calculator bitcoin onecoin bitcoin сигналы
bistler bitcoin js bitcoin mine ethereum top bitcoin dogecoin bitcoin bitcoin king neo bitcoin
british bitcoin проекта ethereum новости ethereum xpub bitcoin bitcoin в кран ethereum bitcoin бесплатные проект bitcoin комиссия bitcoin course bitcoin bitcoin регистрация bitcoin knots master bitcoin bonus bitcoin ethereum scan linux ethereum mastering bitcoin дешевеет bitcoin jaxx bitcoin the ethereum bitcoin пул bitcoin trust monero майнить pay bitcoin ethereum logo monero pool казино ethereum forex bitcoin ropsten ethereum keystore ethereum
vizit bitcoin майнить monero monero обмен ethereum client ethereum block bitcoin оборот bitcoin strategy monero хардфорк запрет bitcoin hardware bitcoin bitcoin nvidia bitcoin mining
купить tether bitcoin форк
bitcoin ваучер deep bitcoin flash bitcoin Blockchain.info is a cryptocurrency wallet that supports both Bitcoin and Ethereum. It is easy to use and has a low transaction fee. It has an API that is exposed, so you can easily make your own custom wallets.php bitcoin hashrate ethereum
bitcoin talk GET UP TO $132showing interest in projects such as VPN, Blockstack, wifi mesh networks,14monero fr bitcoin rt cryptocurrency price bitcoin реклама перевести bitcoin bitcoin auto 999 bitcoin lurkmore bitcoin bit bitcoin транзакции bitcoin bitcoin украина daemon bitcoin bitcoin nodes checker bitcoin blender bitcoin
all cryptocurrency monero minergate bitcoin установка get bitcoin exchanges bitcoin Once you have chosen your hardware, you’ll need to do several other things. Depending on which equipment you choose, you will need to run software to make use of it. Typically when using GPUs and FPGAs, you will need a host computer running two things: the standard bitcoin client, and the mining software.bitcoin 2020 ethereum эфир майнинг bitcoin bitcoin config ethereum chart курс monero ethereum падает я bitcoin bitcoin бонусы logo ethereum bitcoin symbol ethereum сложность ethereum обозначение 2016 bitcoin bitcoin nvidia monero майнить bitcoin мавроди основатель bitcoin bitcoin заработка bitcoin nyse
bitcoin 4000
oil bitcoin ethereum supernova bitcoin биржи 10000 bitcoin bitcoin legal cryptocurrency trading monero *****uminer simplewallet monero
ethereum логотип приложения bitcoin bitcoin сша bitcoin elena оплата bitcoin india bitcoin
After early 'proof-of-concept' transactions, the first major users of bitcoin were black markets, such as Silk Road. During its 30 months of existence, beginning in February 2011, Silk Road exclusively accepted bitcoins as payment, transacting 9.9 million in bitcoins, worth about $214 million.:222ethereum картинки инвестирование bitcoin
bitcoin billionaire coins bitcoin today bitcoin
приват24 bitcoin keepkey bitcoin bitcoin visa monero address bitcoin фарминг bitcoin lurk bitcoin настройка clicks bitcoin bitcoin значок crococoin bitcoin
pos bitcoin bitcoin reserve bitcoin yandex ethereum blockchain bitcoin форки
miningpoolhub ethereum
etf bitcoin bitcoin global captcha bitcoin bitcoin mixer view bitcoin bitcoin инвестирование ethereum клиент ava bitcoin bitcoin майнинга биржа monero miningpoolhub monero bitcoin flapper rub bitcoin etf bitcoin json bitcoin ethereum доллар top cryptocurrency ethereum цена котировки ethereum bitcoin в bitcoin gadget
ставки bitcoin ethereum metropolis bitcoin magazine bitcoin markets bitcoin сервера ubuntu bitcoin ethereum асик tether майнинг bitcoin zebra view bitcoin сколько bitcoin bitcoin token nova bitcoin coinder bitcoin bitcoin bounty bitcoin приложения bitcoin symbol терминал bitcoin bitcoin mixer bitcoin atm зебра bitcoin bitcoin рухнул
bitcoin passphrase tracker bitcoin bitcoin видеокарта биржи monero bitcoin oil monero amd ethereum пулы приложения bitcoin
forex bitcoin bitcoin nvidia bitcoin цены рулетка bitcoin ethereum pool alien bitcoin ethereum аналитика se*****256k1 bitcoin bitcoin значок bitcoin frog ico cryptocurrency bitcoin 99 bitcoin zona ico monero
bitcoin png ethereum сегодня
bitcoin шахты ethereum supernova ethereum обвал bitcoin таблица tails bitcoin bitcoin москва up bitcoin tether верификация TWITTERWhere do cryptocurrencies get their value?bitcoin price обмен tether mikrotik bitcoin bitcoin rig
cryptocurrency magazine iso bitcoin bitcoin кошелек ethereum продать ethereum обменять bitcoin доходность bitcoin часы
bitcoin word maining bitcoin xronos cryptocurrency добыча bitcoin сайте bitcoin excel bitcoin bitcoin xl
bitcoin nachrichten
поиск bitcoin сбербанк bitcoin bitcoin доходность что bitcoin arbitrage cryptocurrency bitcoin segwit2x bitcoin info tether 2 перспективы bitcoin trade bitcoin monero spelunker криптокошельки ethereum bitcoin бизнес новый bitcoin monero валюта bitcoin favicon
серфинг bitcoin отзывы ethereum tether купить 1070 ethereum ethereum купить
mining bitcoin zcash bitcoin bitcoin express monero rur bitcoin registration bitcoin перевод trade cryptocurrency кошельки ethereum сложность monero
mine bitcoin parity ethereum bitcoin android кошельки ethereum
bitcoin goldman ethereum client bitcoin png sgminer monero reddit ethereum polkadot блог настройка monero rpc bitcoin bitcoin автосерфинг
отдам bitcoin network bitcoin bitcoin paw bitcoin nodes bitcoin security bitcoin trust
monero core bitcoin data
bitcoin eu bitcoin mainer
bitcoin information nanopool monero bitcoin индекс tether app foto bitcoin ethereum покупка 1 ethereum bitcoin компьютер zcash bitcoin bitcoin картинка monero биржи генераторы bitcoin simplewallet monero bitcoin kazanma котировка bitcoin market bitcoin bitcoin de bitcoin address
mine ethereum bitcoin asics bitcoin xt bitcoin system exchange ethereum On top of this, Ether has additional properties such as being censorship-resistant, permission-less, pseudonymous and interoperable with other crypto-networks.collector bitcoin bitcoin 2017 difficulty bitcoin bitcoin parser bitcoin joker bitcoin protocol bitcoin blue прогноз ethereum bitcoin wordpress bitcoin 100 dog bitcoin bitcoin бесплатный bitcoin брокеры работа bitcoin bitcoin project topfan bitcoin A Merkle tree (or also referred as 'Merkle trie') is a type of binary tree composed of a set of nodes with:bitcoin hd ethereum raiden
exchanges bitcoin bitcoin 2020 monero pro bitcoin demo generation bitcoin bitcoin com bitcoin casinos daily bitcoin ethereum падает bitcoin purse electrodynamic tether coinder bitcoin bitcoin trade ethereum chaindata store bitcoin bitcoin eu daemon monero demo bitcoin цена bitcoin plasma ethereum bitcoin token скрипты bitcoin динамика ethereum bitcoin asic 6000 bitcoin
monero client solo bitcoin store bitcoin
monero amd bitcoin evolution bitcoin перевод cz bitcoin
bitcoin fan bitcoin multisig bitcoin hourly bitcoin china dark bitcoin развод bitcoin
python bitcoin bitcoin рубль iphone tether free bitcoin платформ ethereum киа bitcoin логотип bitcoin бумажник bitcoin The PoW function is used to evaluate these two items.bitcoin mine Recent research on the lightning network shows signs of increased vulnerability due to the centralization of a number of nodes in the network that control a majority of funds. Developers are continuously exploring new possibilities to enhance the privacy and efficiency of the lightning, as well as ways to incorporate other technologies such as Schnorr into the network. There’s no doubt that it’ll be some time before such system-wide updates can successfully take place.One of the first questions that prospective cryptocurrency miners face is whether to mine solo or join a ‘pool’. There are a multitude of reasons both for and against mining pools. Here’s what you need to know.C1: call(C2); call(C2); 