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.
In either case, block and transaction data should not be relied upon if it comes from a node that apparently isn’t using the current consensus rules.bitcoin биткоин Why does ETH have value?monero *****u bitcoin dance ethereum википедия bitcoin airbitclub эфир ethereum bitcoin основатель
lightning bitcoin
bitcoin пулы bitcoin генератор bitcoin investment bitcoin вклады картинки bitcoin nicehash bitcoin auto bitcoin decred ethereum
bitcoin игры bitcoin sweeper ethereum пулы ethereum chaindata ann bitcoin bitcoin usd bitcoin goldman bitcoin ставки bitcoin betting Given that critical ingredient, the hedging contract would look as follows:To get a sense of how much of the world's money is in bitcoins, we must determine the total amount of money. As it turns out, this is not the easiest question to answer. Such a calculation might take into account dozens of categories of wealth, including bank notes, precious metals, money market accounts, and debt. The Money Project attempted this computation in October 2017 and estimated around $36.8 trillion in global narrow money. As of March 2020, this number is surely outdated. However, it was also arbitrary enough to warrant using it for a rough estimate.2ethereum siacoin bitcoin tm bitcoin moneybox token ethereum cryptocurrency mining bitcoin core bitcoin скачать миллионер bitcoin mindgate bitcoin cryptocurrency это bitcoin ротатор bitcoin buying bitcoin получить
яндекс bitcoin q bitcoin 6000 bitcoin торговля bitcoin bitcoin best There is No Such Thing as a Free Lunchbitcoin formula IS BITCOIN A TRIPLE ENTRY SYSTEM?bitcoin клиент bitcoin суть ultimate bitcoin bitcoin зарегистрировать bitcoin проблемы ethereum node проект bitcoin ann ethereum bitcoin mt4 bitcoin миллионеры mac bitcoin ethereum обвал 100 bitcoin bitcoin обменник dat bitcoin ethereum programming wikipedia cryptocurrency партнерка bitcoin
вход bitcoin bitcoin 20 bitcoin symbol bitcoin кранов
blockchain ethereum monero продать 1070 ethereum bitcoin advertising bitcoin conference китай bitcoin bitcoin 2000
bitcoin seed bitcoin eth фарминг bitcoin l bitcoin bcn bitcoin майн bitcoin проект bitcoin использование bitcoin bitcoin widget майнеры bitcoin bitcoin миллионер programming bitcoin dash cryptocurrency clicker bitcoin bitcoin ethereum de bitcoin
bitcoin agario bitcoin dat
vector bitcoin bitcoin parser конвертер monero краны ethereum bitcoin пополнение торрент bitcoin платформ ethereum
alpari bitcoin пример bitcoin bitcoin вывести bitcoin сбербанк ethereum twitter продам ethereum метрополис ethereum abi ethereum отзыв bitcoin weather bitcoin bitcoin knots bitcoin capital bitcoin вложить programming bitcoin ethereum доллар bitcoin generate tracker bitcoin bitcoin usa monero cryptonote
bitcoin hardfork bitcoin инструкция hd bitcoin bitcoin конец курсы bitcoin
casinos bitcoin gui monero 2048 bitcoin
tokens ethereum bitcoin бизнес bitcoin баланс bitcoin get
bitcoin 4000 By keeping a shallow-copy of the blockchain aka a Light Clienthashrate bitcoin bitcoin pizza goldsday bitcoin bitcoin софт сложность ethereum bitcoin 3 валюта tether bitcoin добыть bitcoin advcash ethereum course bitcoin froggy рынок bitcoin майнеры bitcoin bitcoin tm bitcoin q There will be stepwise refinement of the ASIC products and increases in efficiency, but nothing will offer the 50x to 100x increase in hashing power or 7x reduction in power usage that moves from previous technologies offered. This makes power consumption on an ASIC device the single most important factor of any ASIC product, as the expected useful lifetime of an ASIC mining device is longer than the entire history of bitcoin mining.• $1 trillion annual e-commerce marketwikileaks bitcoin bitcoin land iso bitcoin bitcoin attack bitcoin авито bitcoin multisig finney ethereum txid ethereum ethereum gas обмен bitcoin foto bitcoin bitcoin sphere вики bitcoin bitcoin algorithm puzzle bitcoin логотип bitcoin bitcoin транзакция bitcoin greenaddress ethereum форум top cryptocurrency cryptocurrency mining payeer bitcoin auto bitcoin bitcoin rotators price bitcoin bitcoin инвестирование difficulty ethereum carding bitcoin bitcoin окупаемость kraken bitcoin card bitcoin ethereum homestead bcc bitcoin bitcoin вконтакте bitcoin average avalon bitcoin ethereum перевод биржа bitcoin bitcoin koshelek bitcoin рубли monero форк вывод ethereum майнить bitcoin ecdsa bitcoin карты bitcoin importprivkey bitcoin blender bitcoin bitcoin payza ethereum github
bitcoin seed форки bitcoin
ethereum faucet short bitcoin dollar bitcoin bitcoin автокран bitcoin loto bitcoin официальный importprivkey bitcoin bitcoin продать
balance bitcoin bitcoin trojan bitcoin 20 bitcoin обои bitcoin weekend bitcoin ukraine bitcoin legal bitcoin оплата ethereum краны bitcoin 20 fast bitcoin bitcoin обменники forecast bitcoin продам ethereum bitcoin 4 Blockchain ExplainedUnbreakableeos cryptocurrency bitcoin golden реклама bitcoin
planet bitcoin opencart bitcoin se*****256k1 bitcoin bitcoin fire bitcoin nonce s bitcoin main bitcoin удвоить bitcoin trade cryptocurrency group bitcoin
валюта bitcoin иконка bitcoin
валюта tether bitcoin top инструкция bitcoin bounty bitcoin monero новости bitcoin mmgp tether верификация se*****256k1 ethereum tether валюта testnet bitcoin bitcoin краны by bitcoin bitcoin rpc stealer bitcoin
bitcoin legal green bitcoin
The word 'cryptocurrency' is derived from the encryption techniques which are used to secure the network.If Eve offers to pay Alice a bitcoin in exchange for goods and signs a corresponding transaction, it is still possible that she also creates a different transaction at the same time sending the same bitcoin to Bob. By the rules, the network accepts only one of the transactions. This is called a race attack, since there is a race which transaction will be accepted first. Alice can reduce the risk of race attack stipulating that she will not deliver the goods until Eve's payment to Alice appears in the blockchain.You absolutely need a strong appetite of personal curiosity for reading and constant learning, as there are ongoing technology changes and new techniques for optimizing coin mining results. The most successful coin miners spend hours every week studying the best ways to adjust and improve their coin mining performance. What Is Bitcoin?I’d recommend finding a company like Go Social that has a good reputation — otherwise, you could end up with a company that represents you poorly and makes you look bad!To form a distributed timestamp server as a peer-to-peer network, bitcoin uses a proof-of-work system. This work is often called bitcoin mining.bitcoin fpga пополнить bitcoin консультации bitcoin tether купить ethereum биржи loan bitcoin gui monero bitcoin fund api bitcoin linux ethereum bitcoin рейтинг прогноз bitcoin
ethereum токен
us bitcoin yota tether
demo bitcoin ethereum contracts tether usd ethereum новости контракты ethereum ethereum клиент supernova ethereum bitcoin крах monero bitcoin компьютер bitcoin хардфорк tether программа bitcoin компьютер bitcoin play bitcoin waves explorer ethereum ethereum project bitcoin json bitcoin видеокарта asics bitcoin accept bitcoin
сложность bitcoin bitcoin asics генераторы bitcoin bitcoin alliance bitcoin forex bitcoin virus bitcoin department bitcoin habrahabr обои bitcoin car bitcoin bitcoin lurkmore
checker bitcoin ethereum проекты bitcoin com bitcoin yen будущее ethereum bitcoin минфин ethereum биржа bitcoin валюты tinkoff bitcoin mine ethereum
депозит bitcoin hacking bitcoin bitcoin store bitcoin iq
bitcoin cryptocurrency mining bitcoin кошель bitcoin monero криптовалюта сеть bitcoin ethereum видеокарты
For example, if you bought $1000 worth of ETH back in March 2017 and held it long term up until March 2018, you would have $25,000 worth of Ethereum right now. However, if you had sold your Ethereum in December 2017, you would have locked in about $45,000. You could then use some of that money to reinvest into Ether to hold it for another set of profits.Subject to KYC rules and therefore requires ID verificationкурс tether mac bitcoin bitcoin goldmine ethereum логотип bitcoin блок ethereum code bitcoin protocol adc bitcoin bitcoin продать programming bitcoin bitcoin frog
monero форум rates bitcoin 1080 ethereum
взлом bitcoin ethereum txid
hack bitcoin биржа monero
ethereum капитализация avto bitcoin ethereum btc bitcoin роботы jax bitcoin bitcoin краны bitcoin регистрации bitcoin опционы биржи ethereum
abc bitcoin raspberry bitcoin magic bitcoin цена ethereum bitcoin торрент
asic ethereum сети ethereum блок bitcoin bitcoin robot bitcoin land акции bitcoin bitcoin etf sun bitcoin
autobot bitcoin bitcoin получение
credit bitcoin bitcoin краны bitcoin allstars ethereum pos
london bitcoin forum ethereum tether addon bitcoin pool биржа ethereum bitcoin bbc bitcoin loan x2 bitcoin battle bitcoin monero пул
ethereum bitcoin 60 bitcoin bitcoin суть аналитика ethereum bitcoin гарант bitcoin capitalization bitcoin banking блог bitcoin bitcoin cap ethereum node tether 2 iphone bitcoin monero blockchain
mac bitcoin monero криптовалюта bitcoin gpu работа bitcoin bitcoin luxury hardware bitcoin tether android bitcoin трейдинг bitcoin double bitcoin fees bitcoin рулетка bitcoin maps bitcoin чат bitcoin japan boxbit bitcoin проблемы bitcoin 0 bitcoin
bitcoin s
instant bitcoin server bitcoin bitcoin компьютер bitcoin xyz bitcoin coins майнер bitcoin автомат bitcoin bitcoin spinner ethereum contracts продать monero dapps ethereum bitcoin registration monero calculator bitcoin database ethereum 2017 bitcoin spend
bitcoin продать хардфорк bitcoin coinmarketcap bitcoin ethereum обмен best bitcoin взлом bitcoin бесплатно ethereum bitcoin hesaplama bitcoin masters
bitcoin сигналы win bitcoin decred ethereum bitcoin кошелек ethereum статистика bitcoin local автомат bitcoin tails bitcoin транзакции bitcoin ethereum stats claymore ethereum bitcoin компьютер bitcoin source удвоитель bitcoin lottery bitcoin multisig bitcoin стоимость bitcoin se*****256k1 ethereum казино bitcoin Private keysIn order to discover which allocation strategy works best for your individualbuying bitcoin mine ethereum bitcoin withdraw is bitcoin aliexpress bitcoin buying bitcoin рубли bitcoin bitcoin отследить market bitcoin bitcoin котировка
bistler bitcoin
all bitcoin ethereum blockchain
ethereum core
buying bitcoin oil bitcoin dwarfpool monero bitcoin запрет ethereum ротаторы пул monero баланс bitcoin bitcoin icons bitcoin free habrahabr bitcoin андроид bitcoin bitcoin machine bitcoin server total cryptocurrency ethereum news pool bitcoin ethereum chart frontier ethereum The whole database is stored on a network of thousands of computers called nodes. New information can only be added to the blockchain if more than half of the nodes agree that it is valid and correct. This is called consensus. The idea of consensus is one of the big differences between cryptocurrency and normal banking.Thirdly, as Litecoin is decentralized, you have full control over your funds. This means that you do not need to fill out any forms to send your coins!xbt bitcoin bitcoin life bitcoin neteller bitcoin school
xronos cryptocurrency платформ ethereum monero график платформа bitcoin ethereum это tether транскрипция bitcoin token эмиссия ethereum bitcoin vector exchange bitcoin брокеры bitcoin валюта monero казино ethereum bitcoin hype пример bitcoin monero js проверка bitcoin
purse bitcoin приложения bitcoin
ethereum ann collector bitcoin терминалы bitcoin tether верификация 999 bitcoin Monero Mining: Full Guide on How to Mine Monerobitcoin nasdaq ethereum free bitcoin update amd bitcoin bitcoin трейдинг bitcoin презентация ethereum gold bitcoin аналоги
ethereum алгоритм bitcoin ads китай bitcoin
bitcoin gambling bitcoin ira fasterclick bitcoin bitcoin вебмани майнинг tether ферма ethereum bitcoin pool 1 ethereum bitcoin книга bitcoin buying bitcoin приложение And for this service, they are rewarded in bitcoins.Ethereumbitcoin daemon bitcoin nachrichten simplewallet monero bitcoin script deep bitcoin bitcoin register
заработай bitcoin bitcoin webmoney bitcoin maps ethereum обозначение *****a bitcoin платформы ethereum 6000 bitcoin mooning bitcoin trade cryptocurrency
bitcoin суть 1080 ethereum bitcoin agario
torrent bitcoin Aspiring cryptominers should also know that as cryptocurrencies have risen in both popularity and value, competition has increased substantially as well and now includes organizations and enterprises with more extensive resources than most individuals can compete with.Mining cryptocoins is an arms race that rewards early adopters. Bitcoin, the first decentralized cryptocurrency, released in early 2009. Similar digital currencies have crept into the worldwide market since then, including a spin-off from Bitcoin called Bitcoin Cash.ethereum txid mikrotik bitcoin escrow bitcoin hourly bitcoin matrix bitcoin bitcoin курс
bitcoin accepted top bitcoin покупка ethereum отзыв bitcoin bitcoin автосерфинг In Bitcoin, the maximum block size is specified in bytes (currently 1 MB) whereas Ethereum’s block size is based on complexity of contracts being run – it’s known as a Gas limit per block, and the maximum can vary slightly from block to block.bitcoin pools
algorithm bitcoin CybersecuritySome wallets use many hidden private keys internally. If you only have a backup of the private keys for your visible Bitcoin addresses, you might not be able to recover a great part of your funds with your backup.bitcoin сколько bitcoin биржи
bitcoin bloomberg bitcoin теханализ trade cryptocurrency click bitcoin технология bitcoin bitcoin mempool card bitcoin сложность monero python bitcoin nodes bitcoin bitcoin evolution bitcoin system map bitcoin книга bitcoin etoro bitcoin se*****256k1 bitcoin
bitcoin mt4 poloniex ethereum security bitcoin Ether (ETH), the cryptocurrency of the Ethereum network, is arguably the second most popular digital token after bitcoin (BTC). Indeed, as the second-largest cryptocurrency by market cap, comparisons between Ether and BTC are only natural.monero обмен
bitcoin pools bitcoin комиссия криптовалюту bitcoin bitcoin спекуляция battle bitcoin monero график bitcoin sec ethereum testnet twitter bitcoin bitcoin pizza avalon bitcoin xbt bitcoin эфир ethereum rbc bitcoin 2016 bitcoin
bitcoin магазин Ethereum uses smart contracts. You can use smart contacts for many more things than you can use Bitcoin for.bitcoin рбк The recipient of the messagebitcoin auto tether iphone
etf bitcoin hack bitcoin bitcoin grant goldsday bitcoin bitcoin сделки bitcoin info bitcoin сборщик bitcoin laundering china bitcoin bitcoin банкнота bazar bitcoin rotator bitcoin It’s an exciting activity. It requires a great understanding of the market you are entering, decisiveness, and nerves of steel.bitcoin трейдинг ethereum проблемы приват24 bitcoin r bitcoin bitcoin qiwi ethereum logo краны monero bitcoin paw bitcoin script bitcoin ставки bitcoin заработок
bitcoin регистрации api bitcoin автомат bitcoin
bitcoin multiplier криптовалюты bitcoin bitcoin перевод bitcoin s
ethereum explorer
coindesk bitcoin buying bitcoin ethereum dark se*****256k1 bitcoin rise cryptocurrency tether приложение
ethereum investing разработчик bitcoin tcc bitcoin bitcoin основы bitcoin onecoin bitcoin converter monero pro monero криптовалюта film bitcoin bitcoin hardfork исходники bitcoin bitcoin security контракты ethereum your bitcoin polkadot cadaver bitcoin adder криптовалюту monero exchanges bitcoin
se*****256k1 ethereum poker bitcoin ethereum browser bitcoin google bitcoin платформа арбитраж bitcoin exchange bitcoin bitcoin trojan bitcoin лохотрон chain bitcoin bitcoin торги bitcoin cloud monero кошелек pool bitcoin
bitcoin download bitcoin portable wikipedia ethereum 1:20Stock markets also carry risk with them, because stock valuations are usuallyThe Technology Behind Litecoinbitcoin china bitcoin world вход bitcoin bitcoin капча ethereum install apple bitcoin generator bitcoin bitcoin eu monero miner токен ethereum habrahabr bitcoin hashrate ethereum серфинг bitcoin bitcoin магазин динамика ethereum bitcoin flex game bitcoin bitcoin hyip
bitcoin андроид
ethereum кран будущее bitcoin bitcoin indonesia
bitcoin ann seed bitcoin bubble bitcoin
new cryptocurrency bitcoin зарегистрировать ethereum info robot bitcoin express bitcoin ethereum хешрейт ethereum обменять bitcoin bow bitcoin ann bitcoin yandex обмен tether кликер bitcoin bitcoin store bitcoin пополнение kurs bitcoin криптовалюту monero
bitcoin кэш
ethereum io сервисы bitcoin bitcoin 100 cryptocurrency контракты ethereum tether верификация equihash bitcoin pull bitcoin bitcoin приложение
hashrate bitcoin bitcoin qt stock bitcoin bitcoin эфир миксер bitcoin bitcoin purchase
rpg bitcoin bitcoin доходность
bitcoin lurk free bitcoin token bitcoin биржа ethereum bitcoin 33 Bitcoin appeals to tech-savvy libertarians, because it so far exists outside the institutional banking system and the control of governments. However, researchers looking to uncover the reasons for interest in bitcoin did not find evidence in Google search data that this was linked to libertarianism.форумы bitcoin Two persons may exchange messages, conduct business and negotiate electronic contracts without ever knowing the true name or legal identity of the other. It is only natural that governments will try to slow or halt the spread of this technology, citing national security concerns, use of the technology by criminals and fears of societal disintegration.ethereum конвертер forex bitcoin bitcoin fire bitcoin download bitcoin россия
сети ethereum ethereum alliance bitcoin ваучер заработать bitcoin bitcoin автомат обмена bitcoin bitcoin компания
collector bitcoin bitcoin map
bitcoin biz bitcoin обменять bitcoin монеты
Ключевое слово bitcoin wordpress bitcoin мошенники reddit bitcoin ethereum видеокарты bitcoin bloomberg bitcoin cny konvert bitcoin bitcoin wm капитализация bitcoin bitcoin onecoin майнер monero Conclusionбесплатные bitcoin waves bitcoin Cryptographic keysmonero hashrate bitcoin bank bitcointalk monero cryptocurrency law
trading bitcoin оплатить bitcoin bitcoin bloomberg bitcoin payeer field bitcoin bitcoin asic world bitcoin ютуб bitcoin зарабатывать bitcoin bitcoin порт
tether 2 fpga ethereum порт bitcoin bitcoin yen зарегистрироваться bitcoin The vault dispenses the cash it holds to anyone who can prove they know a unique number called the private key. The legal and moral rights of the person attempting to gain access to the funds in the vault are irrelevant. The vault accepts an unlimited number of access attempts by anyone.ethereum ann • If stored correctly, Bitcoin is practically non-confiscatable. It isbitcoin script se*****256k1 ethereum bitcoin сша polkadot stingray 5 bitcoin
bitcoin checker bitcoin airbitclub е bitcoin
best cryptocurrency bitcoin tm bitcoin token bitcoin форекс bitcoin инвестиции bitcoin 4000 monero calc bitcoin machine ethereum twitter Blockchain-based cryptocurrencies have been around for over a decade, since the release of Bitcoin in early 2009.bitcoin rt hit bitcoin ethereum получить bitcoin парад bitcoin security bitcoin 9000 игры bitcoin short bitcoin bitcoin machines bitcoin ферма bitcoin сбербанк ethereum torrent bitcoin зебра 1080 ethereum bitcoin okpay bitcoin euro 3d bitcoin tabtrader bitcoin qtminer ethereum bitcoin heist alien bitcoin конвектор bitcoin bitcoin proxy ethereum проблемы create bitcoin bitcoin kurs loans bitcoin пул bitcoin lamborghini bitcoin nicehash bitcoin криптовалюта tether usb bitcoin monero amd ethereum контракт bitcoin gambling login bitcoin
coingecko ethereum
bitcoin foundation bitcoin сервисы trinity bitcoin
bitcoin price
bitcoin проект bitcoin loan bitcoin 999 пополнить bitcoin roboforex bitcoin bitcoin фермы bitcoin скачать ethereum torrent ethereum addresses bitcoin адреса ethereum classic kupit bitcoin currency bitcoin зарабатывать bitcoin kong bitcoin bitcoin preev mikrotik bitcoin mmm bitcoin bitcoin зарегистрироваться wisdom bitcoin bitcoin lurkmore buy tether bitcoin live casinos bitcoin бизнес bitcoin форекс bitcoin pay bitcoin bitcoin окупаемость nicehash monero monero nvidia bitcoin зарабатывать ethereum обвал
