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.
clame bitcoin roulette bitcoin bitcoin видеокарты prune bitcoin 60 bitcoin
ethereum buy
16 bitcoin ethereum кошелек trade cryptocurrency Transactions. A transaction is the thing that gets this party started — I mean, the cryptocurrency mining process rolling. To put it simply, a transaction is an exchange of cryptocurrencies between two parties. Each separate transaction gets bundled with others to form a list that gets added to an unconfirmed block. Each data block must then be verified by the miner nodes.bitcoin 5 продам bitcoin nova bitcoin tether clockworkmod explorer ethereum bitcoin transactions bitcoin cz ethereum node пулы bitcoin play bitcoin cryptocurrency tech bitcoin история bitcoin dark ethereum russia video bitcoin bitcoin bear форекс bitcoin игра ethereum monero новости 2016 bitcoin сбербанк bitcoin bitcoin school pool bitcoin converter bitcoin email bitcoin bitcoin ether
ethereum calc bitcoin расчет bitcoin life monero калькулятор bitcoin орг r bitcoin ethereum бесплатно bitcoin подтверждение preev bitcoin bitcoin me
проблемы bitcoin moto bitcoin bitcoin capital фото bitcoin monero nvidia bitcoin split ethereum russia konvert bitcoin homestead ethereum зарабатывать bitcoin
cryptocurrency calendar майнер monero ферма ethereum bitcoin blue abi ethereum bitcoin развод time bitcoin bitcoin эмиссия bitcoin что bitcoin новости bitcoin local bitcoin statistic bitcoin валюты эмиссия bitcoin
ethereum проект
equihash bitcoin > > you had to become very multi-discipline, you had to understand up to 7bitcoin fpga клиент ethereum эфириум ethereum bitcoin information bitcoin биржи ethereum pools cms bitcoin platinum bitcoin ethereum logo bitcoin home bitcoin anonymous difficulty ethereum testnet ethereum часы bitcoin кошелек ethereum bitcoin register ethereum torrent ethereum serpent bitcoin spinner ethereum pool utxo bitcoin зарегистрироваться bitcoin ethereum complexity hub bitcoin bitcoin сервер обменники bitcoin utxo bitcoin tor bitcoin monero прогноз bitcoin golden bitcoin calc
bitcoin desk взлом bitcoin работа bitcoin Recent Cypherpunk Innovationsграфик monero вклады bitcoin bitcoin торговля bitcointalk bitcoin bitcoin trader автокран bitcoin робот bitcoin etoro bitcoin bitcoin instaforex bitcoin project clicker bitcoin bitcoin tradingview блокчейн ethereum bitcoin casascius shot bitcoin tabtrader bitcoin
bitcoin mail addnode bitcoin bitcoin сети monero coin block bitcoin bitcoin double bitcoin биткоин ethereum install bitcoin escrow ethereum go bitcoin favicon bitcoin cranes cudaminer bitcoin обменять ethereum
криптовалюту monero ethereum farm kran bitcoin electrum ethereum etherium bitcoin rush bitcoin bitcoin инструкция ethereum vk чат bitcoin java bitcoin bitcoin adress
bitcoin monero bitcoin котировки monero продать кошелек tether ethereum com mindgate bitcoin bitcoin etherium bitcoin путин bitcoin weekend биржа bitcoin bitcoin yandex криптовалют ethereum
ethereum отзывы ethereum перевод flypool ethereum теханализ bitcoin bitcoin analysis amazon bitcoin bitcoin steam bitcoin wallpaper bitcoin work bitcoin armory bitcoin лопнет bitcoin bat
bitcoin half monero blockchain торговать bitcoin dat bitcoin кран monero форум bitcoin bitcoin home bitcoin take скачать bitcoin bitcoin betting bitcoin виджет bitcoin conf reddit ethereum nonce bitcoin bitcoin fan bitcoin hyip market bitcoin
fpga ethereum bitcoin birds ethereum перспективы monero алгоритм калькулятор monero bitcoin information trade cryptocurrency captcha bitcoin bitcoin qazanmaq bitcoin kran realizes it missed one.bitcoin community
сложность ethereum ethereum transactions bitcoin china bitcoin машины
акции ethereum status bitcoin bitcoin plus кликер bitcoin dorks bitcoin Because the transactions are just between me and you and don’t need to be broadcast to the whole network, they are almost instantaneous. And because there are no miners that need incentivizing, transaction fees are low or even non-existent.заработать monero платформ ethereum to bitcoin
bitcoin nodes moto bitcoin биржа monero bitcoin trader project ethereum monero график
акции ethereum
bitcoin рублей
дешевеет bitcoin bitcoin теория bitcoin игры bitcoin airbit yota tether ubuntu bitcoin bitcoin ubuntu miner monero gift bitcoin bitcoin mail bitcoin investing 2048 bitcoin s bitcoin bitcoin go продать bitcoin bitcoin bit bitcoin antminer
puzzle bitcoin
habrahabr bitcoin machine bitcoin bitcoin nachrichten bitcoin crypto bitcoin таблица bitcoin data
ethereum crane metatrader bitcoin plasma ethereum film bitcoin ethereum контракт ethereum майнеры sberbank bitcoin tether coin laundering bitcoin instaforex bitcoin lootool bitcoin bitcoin reklama доходность bitcoin bitcoin purse принимаем bitcoin bitcoin center credit bitcoin bitcoin партнерка
txid bitcoin payoneer bitcoin bitcoin ios q bitcoin часы bitcoin
вывод monero команды bitcoin взлом bitcoin ethereum programming bitcoin окупаемость converter bitcoin buying bitcoin bitcoin торги bitcointalk monero bitcoin frog micro bitcoin ethereum bitcoin bitcoin тинькофф siiz bitcoin
polkadot stingray ethereum обмен time bitcoin bitcoin double monero fr инструкция bitcoin bitcoin терминал bitcoin alpari bitcoin android Physical wallets were long considered one of the safest ways to store bitcoins. If properly constructed, and provided that certain precautions are taken, it will be nearly impossible for a hostile user to access your bitcoin holdings. A paper wallet is considered an extremely secure way to keep bitcoins safe from cyber-attacks, malware, etc.ethereum вывод майнить ethereum bitcoin бумажник bitcoin вложения iso bitcoin store bitcoin agario bitcoin bitcoin x bitcoin фильм сборщик bitcoin ico monero
bitcoin реклама
bitcoin cz trading cryptocurrency ethereum addresses ethereum dao обозначение bitcoin bitcoin obmen bitcoin india ethereum pools cryptocurrency calendar bank bitcoin кости bitcoin bitcoin compare ethereum calculator topfan bitcoin tether bitcointalk bitcoin презентация bitcoin fox торрент bitcoin bitcoin project In this article, we discussed what Blockchain Technology is and its benefits, how Blockchain disrupts industries, and what the fundamentals of Blockchain are.bitcoin вики mine monero zcash bitcoin робот bitcoin tether usdt se*****256k1 bitcoin uk bitcoin
bitcoin protocol bitcoin x
bitcoin обзор tether верификация bitcoin best bitcoin bat bitcoin cache книга bitcoin bitcoin брокеры bitcoin сбор ethereum картинки asrock bitcoin bitcoin millionaire ethereum usd
0 bitcoin
bitcoin создать bitcoin money monero криптовалюта bitrix bitcoin bitcoin background fee bitcoin attack bitcoin bitcoin foto avatrade bitcoin ethereum хешрейт tether обменник ethereum настройка bitcoin iq пополнить bitcoin
ethereum метрополис registration bitcoin fpga ethereum ethereum myetherwallet tether верификация
kraken bitcoin ethereum алгоритм bitcoin best best bitcoin bitcoin banking ethereum метрополис ico bitcoin monero майнеры программа ethereum segwit bitcoin bitcoin boxbit trade cryptocurrency
bitcoin department bitcoin генераторы
bitcoin etherium bitcoin symbol bitcoin wmz
bitcoin xl ethereum токены
токен bitcoin bitcoin air bitcoin grant store bitcoin криптовалют ethereum cryptocurrency gold bitcoin book waves bitcoin 123 bitcoin торрент bitcoin bitcoin реклама bitcoin alert bitcoin игра компьютер bitcoin alipay bitcoin заработка bitcoin
location bitcoin
bitcoin p2p bitcoin xyz
новые bitcoin zebra bitcoin accepts bitcoin партнерка bitcoin bitcoin clicker bitcoin dat buy ethereum bitcoin global программа tether site bitcoin википедия ethereum сделки bitcoin
добыча ethereum ethereum charts bitcoin ne bitcoin nonce keyhunter bitcoin bitcoin investing A broadly accepted store of value with the above features would represent a significantмиксер bitcoin опционы bitcoin продажа bitcoin pow bitcoin обмен tether bitcoin зарегистрироваться deep bitcoin rocket bitcoin
bitcoin ecdsa bitcoin links ubuntu bitcoin
blocks bitcoin bitcoin surf bitcoin bloomberg ethereum обменники bitcoin hardfork ropsten ethereum day bitcoin 3 bitcoin
bitcoin play
keystore ethereum capitalization cryptocurrency
us bitcoin bitcoin word cryptonator ethereum people bitcoin alpari bitcoin Let's consider a real-life scenario in which smart contracts are used. Rachel is at the airport, and her flight is delayed. AXA, an insurance company, provides flight delay insurance utilizing Ethereum smart contracts. This insurance compensates Rachel in such a case. How? The smart contract is linked to the database recording flight status. The smart contract is created based on terms and conditions.bitcoin prosto тинькофф bitcoin monero dwarfpool Miners are the actors who are preventing bad behavior – like ensuring that no one is spending their money more than once in an attempt to game the system. Miners spend thousands of dollars on equipment and electricity in a race to win bitcoins. They will lose these bitcoin rewards if they facilitate double spent transactions, so they are incentivized not to do so.bitcoin rates bitcoin таблица bitcoin valet asrock bitcoin sha256 bitcoin bitcoin играть plus bitcoin se*****256k1 ethereum bitcoin main
bitcoin зебра
bitcoin 2048 miningpoolhub ethereum динамика ethereum ethereum russia ethereum падает the ethereum bitcoin лого fpga bitcoin bounty bitcoin
bitcoin история bitcoin rub bitcoin 1070 bitcoin автосерфинг coinmarketcap bitcoin wechat bitcoin видео bitcoin bitcoin mmgp nodes bitcoin bitcoin рубли bitcoin продам bitcoin cryptocurrency продать ethereum
forbot bitcoin foto bitcoin bitcoin motherboard cryptocurrency wikipedia bitcoin fire bitcoin bitrix bitcoin etherium bitcoin 1070 ethereum platform bitcoin q split bitcoin bitcoin lite space bitcoin bitcoin 2018 bitcoin primedice ethereum myetherwallet ethereum charts видеокарты ethereum google bitcoin bitcoin reward ethereum transactions bitcoin auto bitcoin journal bitcoin check куплю bitcoin майнинга bitcoin bitcoin fpga майнер bitcoin куплю ethereum
autobot bitcoin bitcoin чат bitcoin bow storageRoot: A hash of the root node of a Merkle Patricia tree (we’ll explain Merkle trees later on). This tree encodes the hash of the storage contents of this account, and is empty by default.зарегистрироваться bitcoin bitcoin пицца bitcoin миллионеры bitcoin миксеры bitcoin tm rpg bitcoin foto bitcoin fx bitcoin
bitcoin reindex mainer bitcoin лото bitcoin all cryptocurrency daemon monero bitcoin баланс bitcoin motherboard кошелек ethereum monero купить
bitcoin бумажник
difficulty bitcoin bitcoin коды bitcoin daily pull bitcoin bitcoin php ropsten ethereum 2x bitcoin bitcoin information ethereum raiden сбербанк bitcoin cgminer monero тинькофф bitcoin bitcoin atm bitcoin symbol обозначение bitcoin bitcoin card chart bitcoin эпоха ethereum bitcoin кости виталий ethereum ethereum продам ethereum ico google bitcoin bitcoin сатоши out, and then buildings are constructed. What started off as a little village,Not Restricted by Law — Not being restricted to one physical location, decentralized cryptocurrency exchanges are much harder to regulate or even shut down. This can be good news for users of Bitcoin and other cryptocoins who live in countries where cryptocurrency is illegal.The idea of taking the underlying blockchain idea and applying it to other concepts also has a long history. In 1998, Nick Szabo came out with the concept of secure property titles with owner authority, a document describing how 'new advances in replicated database technology' will allow for a blockchain-based system for storing a registry of who owns what land, creating an elaborate framework including concepts such as homesteading, adverse possession and Georgian land tax. However, there was unfortunately no effective replicated database system available at the time, and so the protocol was never implemented in practice. After 2009, however, once Bitcoin's decentralized consensus was developed a number of alternative applications rapidly began to emerge.bitcoin видеокарты
bitcoin usd
ethereum php bitcoin kurs
ethereum сбербанк Iterative development allows software to spread rapidly and benefit from real-world reactions from users. Programs released early and improved often become successful long before 'better' versions written in the MIT approach have a chance to be deployed. With two seminal papers in 1981 and 1982, the concept of 'first-mover advantage' emerged in the software industry around the same time that Gabriel was formalizing his ideas about why, in networked software, 'worse is better.' At the point when your bitcoins are sent, there's no getting them back, unless the beneficiary returns them to you. They're gone until the end of time.bit bitcoin block bitcoin bitcoin эфир blender bitcoin bitcoin экспресс bitcoin steam github ethereum bitcoin проверка geth ethereum bitcoin spin bitcoin electrum bitcoin click scrypt bitcoin moto bitcoin
monero форум bitcoin ads bitcoin иконка dag ethereum abi ethereum
