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.
blockchain bitcoin
сайты bitcoin
In the future, there’s going to be a conflict between regulation and anonymity. Since several cryptocurrencies have been linked with terrorist attacks, governments would want to regulate how cryptocurrencies work. On the other hand, the main emphasis of cryptocurrencies is to ensure that users remain anonymous.bitcoin paper удвоитель bitcoin 1 bitcoin bitcoin 2x bitcoin eu trade bitcoin monero free bitcoin оборот
bitcoin matrix 1080 ethereum
bitcoin wm java bitcoin tether usd аналитика ethereum bitcoin iq
by bitcoin direct bitcoin
l bitcoin bitcoin services bitcoin de bitcoin monkey биржи ethereum up bitcoin Cryptogrind brings together work seekers and prospective employers through its websitestatistics bitcoin bitcoin окупаемость bitcoin 10 sha256 bitcoin сколько bitcoin bitcoin circle iso bitcoin bitcoin javascript monero usd обменники bitcoin bitcoin tm bitcoin hesaplama 4pda bitcoin bitcoin 4000 bitcoin difficulty coingecko ethereum ethereum pool компьютер bitcoin ethereum асик
icons bitcoin What is Litecoin?bitcoin tor wiki bitcoin bitcoin win
индекс bitcoin ethereum frontier bitcoin оплата bitcoin world киа bitcoin bitcoin darkcoin mikrotik bitcoin bitcoin plus динамика ethereum main bitcoin bitcoin пулы bitcoin mac What is on-chain governance?bitcoin p2p bitcoin 2017 bitcoin games polkadot stingray bitcoin pro Mining is intentionally designed to be resource-intensive and difficult so that the number of blocks found each day by miners remains steady. Individual blocks must contain a proof of work to be considered valid. This proof of work is verified by other Bitcoin nodes each time they receive a block. Bitcoin uses the hashcash proof-of-work function.Compare Crypto Exchanges Side by Side With Otherslocal bitcoin ethereum рост tp tether hashrate bitcoin bitcoin etf ultimate bitcoin api bitcoin
statistics bitcoin скрипт bitcoin bitcoin allstars брокеры bitcoin эпоха ethereum rush bitcoin bitcoin database bitcoin купить stock bitcoin monero miner bio bitcoin bitcoin cash difficulty ethereum casino bitcoin обмен tether проблемы bitcoin bitcoin ruble bitcoin alien ico monero monero minergate киа bitcoin
cryptocurrency price takara bitcoin исходники bitcoin coinmarketcap bitcoin bitcoin конверт ethereum testnet tether валюта видеокарты ethereum bitcoin pdf bitcoin exchanges bitcoin super скрипты bitcoin bitcoin instaforex bitcoin symbol bitcoin автоматически bitcoin автоматически coinder bitcoin bitcoin png bitcoin life cgminer ethereum bitcoin падение отдам bitcoin bitcoin программирование bitcoin wsj майн bitcoin ninjatrader bitcoin bitcoin fund bitcoin foto pow bitcoin
22 bitcoin bitcoin динамика dat bitcoin ethereum myetherwallet pos ethereum bitcoin trend proxy bitcoin monero bitcointalk bitcoin hourly bitcoin new mini bitcoin ethereum пул get bitcoin биржи bitcoin bitcoin комментарии monero gpu Despite being absolutely public, or rather because of that fact, Bitcoin is extremely difficult to tamper with. A bitcoin has no physical presence, so you can't protect it by locking it in a safe or burying it in the woods.keystore ethereum отдам bitcoin bitcoin мастернода казино bitcoin bitcoin multibit collector bitcoin bitcoin создатель
bitcoin mac tera bitcoin converter bitcoin bitcoin вывод bitcoin добыть bitcoin даром exmo bitcoin bitcoin froggy secp256k1 ethereum monero стоимость
mineable cryptocurrency пицца bitcoin cpa bitcoin е bitcoin оплата bitcoin работа bitcoin
пожертвование bitcoin
bitcoin казино bitcoin pattern bitcoin проблемы monero кран bitcoin аналитика bitcoin баланс ethereum алгоритм bitcoin code курс bitcoin bitcoin заработать linux ethereum bitcoin zone
panda bitcoin
сложность monero bitcoin dice пул monero bitcoin блоки pump bitcoin контракты ethereum сборщик bitcoin boxbit bitcoin playstation bitcoin ethereum 1070 китай bitcoin A proof of work is a piece of data which was difficult (costly, time-consuming) to produce so as to satisfy certain requirements. It must be trivial to check whether data satisfies said requirements.ethereum raiden
It is perhaps true right at this moment that the value of Bitcoin currency is based more on speculation than actual payment volume, but it is equally true that that speculation is establishing a sufficiently high price for the currency that payments have become practically possible. The Bitcoin currency had to be worth something before it could bear any amount of real-world payment volume. This is the classic 'chicken and egg' problem with new technology: new technology is not worth much until it’s worth a lot. And so the fact that Bitcoin has risen in value in part because of speculation is making the reality of its usefulness arrive much faster than it would have otherwise.Over time, as the ecosystem matures, we can use the 90% Bitcoin allocationCentral planning in the market for money (aka monetary socialism) is dying. This tyrannical financial hierarchy has increased worldwide wealth disparities, funded perpetual warfare, and plundered entire commonwealths to 'bail out' failing institutions. A reversion to the free market for money is the only way to heal the devastation it has wrought over the past 100+ years. Unlike central bankers, who are fallible human beings that give into political pressure to pillage value from people by printing money, Bitcoin’s monetary policy does not bend for anyone: it gives zero fucks. And in a world where central banks can 'just add zeros' to steal your wealth, people’s only hope is a 'zero fucks' money that cannot be confiscated, inflated, or stoppedde bitcoin ethereum russia new cryptocurrency форум bitcoin bitcoin 99 продать monero boxbit bitcoin bitcoin хабрахабр ethereum курсы брокеры bitcoin майнер bitcoin bitcoin calculator bitcoin primedice bitcoin symbol playstation bitcoin monero ann bitcoin work
bitcoin лучшие bitcoin деньги gps tether конференция bitcoin pos bitcoin cryptocurrency trading key bitcoin pirates bitcoin
bitcoin doubler account bitcoin monero rur
fox bitcoin nodes bitcoin bitcoin индекс With as many as 300,000 purchases and sales occurring in a single day, verifying each of those transactions can be a lot of work for miners.2 As compensation for their efforts, miners are awarded bitcoin whenever they add a new block of transactions to the blockchain.ethereum icon create bitcoin Storage: Store information about an application, such as domain registration information or membership records. Storage in a blockchain like Ethereum is unique in that the data is immutable and can't be erased. monero client monero miner
бонусы bitcoin ethereum динамика 0 bitcoin usdt tether bitcoin продам bitcoin stellar Ключевое слово bitcoin часы bitcoin компания konvert bitcoin casper ethereum solidity ethereum bitcoin анимация график bitcoin bitcoin friday bitcoin department analysis bitcoin bitcoin fields
ethereum addresses swiss bitcoin ethereum кошелька
ethereum farm cgminer ethereum day bitcoin accepts bitcoin ethereum упал bitcoin вложения лото bitcoin bitcoin обои bitcoin apple bitcoin click bitcoin froggy bitcoin портал bitcoin converter ethereum кошелька робот bitcoin bitcoin 4 bitcoin double aml bitcoin monero обменять bitcoin кошелька bitcoin обменник bitcoin loto ethereum вики bitcoin scripting bitcoin payoneer ethereum калькулятор bitcoin monkey bitcoin лохотрон ethereum dag bitcoin map monero обмен bitcoin etherium алгоритмы ethereum кошелек ethereum обменять monero bitcoin автоматически bitcoin is
bitcoin блок биржи ethereum кран monero
ethereum gold bitcoin farm bitcoin betting bitcoin cryptocurrency бот bitcoin сложность ethereum space bitcoin bitcoin blocks
bitcoin создать bitcoin ubuntu дешевеет bitcoin bitcoin seed
ios bitcoin bitcoin conf steam bitcoin convert bitcoin вики bitcoin
bitcoin conf monero обмен usdt tether
bitcoin msigna coindesk bitcoin mist ethereum ethereum прогноз
bitcoin billionaire падение ethereum life bitcoin
mine ethereum конвертер bitcoin monero хардфорк wifi tether lite bitcoin bitcoin расшифровка bitcoin create график monero This prohibitive hardware requirement is one of the biggest security measures that deter people from trying to manipulate the bitcoin system.ethereum рост payable ethereum сайт bitcoin keyhunter bitcoin monero кошелек bitcoin окупаемость майн bitcoin paidbooks bitcoin продам bitcoin
ico cryptocurrency pirates bitcoin bitcoin usd bitcoin продам работа bitcoin pirates bitcoin blogspot bitcoin
bitcoin терминалы bitcoin расшифровка bitcoin мошенничество bitcoin миллионеры
mercado bitcoin bitcoin stock Living somewhere very hot meaning that all that equipment running would generate an unbearable amount of heat.исходники bitcoin nicehash monero
bitcoin machine майн bitcoin ethereum добыча арбитраж bitcoin casino bitcoin bitcoin cny
sha256 bitcoin проблемы bitcoin bitcoin кости bitcoin fpga кошелек tether bitcoin loan
Some supporters like the fact that cryptocurrency removes central banks from managing the money supply, since over time these banks tend to reduce the value of money via inflationbitcoin crash testnet ethereum bitcoin ru bitcoin habrahabr bitcoin genesis agario bitcoin bitcoin fpga home bitcoin терминал bitcoin bitcoin вложить qr bitcoin bitcoin casino erc20 ethereum конвертер ethereum bitcoin gadget обвал ethereum bitcoin withdrawal moon ethereum bitcoin information bitcoin 100 bubble bitcoin index bitcoin bitcoin аналитика bitcoin alert currency bitcoin bitcoin play
tether обменник перспективы bitcoin php bitcoin bot bitcoin котировки ethereum
pow bitcoin
blocks bitcoin bitcoin софт bitcoin проблемы CRYPTOAny component of its software is proprietary.reindex bitcoin
bitcoin life
blog bitcoin
bitcoin payza bitcoin pizza top bitcoin mine ethereum ethereum coins api bitcoin я bitcoin bitcoin script
bitcoin daily ethereum claymore asics bitcoin hd7850 monero серфинг bitcoin сделки bitcoin double bitcoin
bitcoin основатель основатель ethereum okpay bitcoin chvrches tether bitcoin legal bitcoin vk
зарабатываем bitcoin bitcoin payment использование bitcoin people bitcoin ethereum эфириум bitcoin services
monero rur bitcoin synchronization bank bitcoin monero купить calc bitcoin magic bitcoin cardano cryptocurrency difficulty monero bitcoin preev kong bitcoin ethereum android bitcoin fox bitcoin доходность bitcoin майнить bitcoin links робот bitcoin bitcoin news bitcoin favicon кошелек ethereum bus bitcoin bitcoin кранов the ethereum bitcoin spinner invest bitcoin bitcoin loans bitcoin заработок bitcoin работа click bitcoin обмена bitcoin
monero обменять bitcoin ocean tether addon
bitcoin blocks bitcoin cryptocurrency bitcoin lucky сеть bitcoin ethereum монета
vps bitcoin swiss bitcoin bitcoin миксеры client ethereum видеокарты bitcoin bitcoin приложение casascius bitcoin bitcoin перевод monero logo bitcoin protocol bitcoin millionaire bitcoin авито server bitcoin monero pro monero сложность iphone tether стоимость monero ethereum txid bitcoin nasdaq курс ethereum bitcoin usa перевести bitcoin bitcoin sec bitcoin stealer
ethereum block ферма ethereum coinder bitcoin bitcoin office alliance bitcoin bitcoin автокран bitcoin майнить daily bitcoin key bitcoin gambling bitcoin
bitcoin symbol
bitcoin reddit cryptocurrency faucet ферма bitcoin bitcoin icons script bitcoin converter bitcoin bitcoin обналичить bitcoin продажа
ethereum проекты bitcoin spinner
express bitcoin bitcoin free ethereum сбербанк bitcoin blockstream bitcoin timer bitcoin уязвимости
Public Key: Think of this as the username to your bank account — this is used to send/receive coins in your wallet.купить bitcoin bitcoin 9000 eos cryptocurrency trust bitcoin cannot be devalued by arbitrary monetary policy decisions, and that they will always beEthereum is a blockchain-based software platform that is primarily used to support the world’s second-largest cryptocurrency by market capitalization after Bitcoin. Like other cryptocurrencies, Ethereum can be used for sending and receiving value globally and without a third party watching or stepping in unexpectedly. withdraw bitcoin etf bitcoin spin bitcoin explorer ethereum
store bitcoin cms bitcoin bitcoin maps bitcoin nodes пополнить bitcoin ставки bitcoin price bitcoin minergate ethereum bitcoin tor bitcoin сбербанк metropolis ethereum mmm bitcoin tether приложение bitcoin ether bitcoin donate
bitcoin proxy bitcoin play bitcoin paypal приложение tether view bitcoin форк bitcoin bitcoin virus bitcoin neteller asics bitcoin monero вывод bitcoin checker bitcoin 4000 pos bitcoin forum bitcoin bittrex bitcoin bitcoin explorer ethereum клиент pps bitcoin bitcoin авито халява bitcoin проект ethereum nvidia monero bitcoin fasttech bubble bitcoin coingecko bitcoin monero прогноз bitcoin обменники bitcoin io java bitcoin bitcoin fees bitcoin games bitcoin падает coinder bitcoin metropolis ethereum Bitcoin uses this same concept. The supply of Bitcoin is limited. Bitcoin is produced at a fixed rate, which will decrease over time — it halves every four years. Bitcoin has a limit of 21 million coins; once there are 21 million Bitcoins, no more coins can be created. How many Bitcoins are there at the moment? Well, currently (27.07.20), there are 18.5 million Bitcoins created. We've still got a long, long way to go before it reaches 21 million!tether верификация bitcoin free icon bitcoin bitcoin автоматически мерчант bitcoin transaction bitcoin асик ethereum monero биржи tcc bitcoin
ethereum stats курс ethereum finney ethereum
bitcoin фарминг работа bitcoin ethereum testnet calculator ethereum 99 bitcoin майнить bitcoin
bitcoin apk мавроди bitcoin bitcoin телефон доходность ethereum bitcoin ebay ethereum coingecko
bitcoin покупка краны monero wechat bitcoin обменять ethereum monero майнер monero майнить claymore monero Today, there is $73 trillion of debt (fixed maturity / fixed liability) in the U.S. credit system according to the Federal Reserve (z.1 report), but there are only $1.6 trillion actual dollars in the banking system. This is how the Fed manages the relative stability of the dollar. Debt creates future demand for dollars. In the Fed’s system, each dollar is leveraged approximately 40:1. If you borrow dollars today, you need to acquire dollars in the future to repay that debt, and currently, each dollar in the banking system is owed 40 times over. The relationship between the size of the credit system relative to the amount of dollars gives the dollar relative scarcity and stability. In aggregate, everyone needs dollars to repay dollar denominated credit.bitcoin calc
