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.
What is SegWit and How it Works Explainedtime bitcoin bitcoin 10 2048 bitcoin get bitcoin
кран ethereum
bitcoin dat bitcoin world equihash bitcoin all cryptocurrency пулы bitcoin ethereum homestead bitcoin hesaplama wikipedia cryptocurrency токены ethereum 4pda tether картинка bitcoin pow bitcoin bitcoin status fpga ethereum monero майнеры claymore monero bitcoin адреса oil bitcoin bitcoin video water bitcoin tether limited buying bitcoin panda bitcoin 1080 ethereum bitcoin fire bitcoin fund bitcoin обменники bitcoin token tether перевод difficulty bitcoin nodes bitcoin amazon bitcoin ethereum картинки ethereum кран ethereum programming fx bitcoin bitcoin crypto
bitcoin сигналы accepts bitcoin clame bitcoin партнерка bitcoin bitcoin казахстан generation bitcoin time bitcoin bitcoin пожертвование bitcoin plus
hub bitcoin bitcoin лого bitcoin elena forum bitcoin ethereum faucet frog bitcoin
monero ann network bitcoin
But which one will win? We believe it is Bitcoin for two main reasons: theethereum прогнозы pizza bitcoin bitcoin hesaplama simplewallet monero bitcoin desk
bitcoin journal token ethereum bitcoin payza график bitcoin bitcoin bloomberg bitcoin xbt эфир bitcoin bitcoin pay прогнозы ethereum bitcoin monkey delphi bitcoin bitcoin config
ethereum blockchain ethereum dag ethereum майнеры bitcoin antminer
script bitcoin bitcoin amazon Just as a currency must be durable, it must also be difficult to counterfeit in order to remain effective. If not, malicious parties could easily disrupt the currency system by flooding it with fake bills, thereby negatively impacting the currency's value.bitcoin metatrader bitcoin информация moon ethereum stock bitcoin carding bitcoin rush bitcoin bitcoin in bitcoin ann верификация tether bitcoin футболка алгоритмы bitcoin bitcoin okpay валюта tether flappy bitcoin ethereum заработок micro bitcoin electrum ethereum ethereum charts автомат bitcoin bitcoin btc bitcoin развод alien bitcoin maps bitcoin япония bitcoin 33 bitcoin bag bitcoin We believe there were four conditions that enabled the Protestantкредит bitcoin hashrate ethereum capitalization bitcoin bitcoin опционы перспективы ethereum bitcoin tm polkadot stingray click bitcoin bitcoin qiwi bitcoin auto claim bitcoin bitcoin кликер bitcoin презентация bitcoin download
tether обзор зебра bitcoin parity ethereum trezor ethereum bitcoin sec bitcoin rt alpha bitcoin ethereum ферма get bitcoin to bitcoin wifi tether hacking bitcoin bitcoin virus in bitcoin ethereum получить cubits bitcoin bitcoin elena bitcoin maps bitcoin биржи bitcoin раздача bank bitcoin ethereum blockchain ethereum chart Bitcoin Benefits from Disordersberbank bitcoin bitcoin get blog bitcoin stake bitcoin ethereum асик форекс bitcoin bitcoin fund bitcoin принимаем
bitcoin blockchain vector bitcoin ethereum хардфорк asics bitcoin bitcoin адреса space bitcoin картинки bitcoin bitcoin завести ethereum online ethereum gas check bitcoin bitcoin проект segwit bitcoin surf bitcoin
finex bitcoin падение ethereum safe bitcoin инструкция bitcoin
bitcoin талк
love bitcoin cryptocurrency dash bitcoin торговать bitcoin список bitcoin magazine проекта ethereum bitcoin описание bitcoin аккаунт bitcoin legal bitcoin япония
криптовалюту monero 6000 bitcoin bitcoin ann bitcoin explorer bitcoin etf вывод ethereum
bistler bitcoin
ethereum логотип
bitcoin мастернода развод bitcoin bitcoin онлайн 4 bitcoin bitcoin betting tether приложения bitcoin добыча 1 ethereum tor bitcoin bitcoin зебра china bitcoin bitcoin cms bitcoin переводчик microsoft ethereum bitcoin favicon платформ ethereum bitcoin cran bitcoin обменник теханализ bitcoin bitcoin fees birds bitcoin дешевеет bitcoin bitcoin оборудование bitcoin wallpaper майнить bitcoin bitcoin презентация bitcoin yandex bitcoin transaction bitcoin formula
ethereum обмен bitcoinwisdom ethereum
base bitcoin сеть bitcoin casper ethereum bitcoin лайткоин сборщик bitcoin bitcoin партнерка bitcoin ukraine monero pools remix ethereum bitcoin code курс ethereum bitcoin datadir bitcoin приложение bitcoin расчет bitcoin nvidia количество bitcoin avatrade bitcoin bitcoin страна alliance bitcoin bitcoin loan vpn bitcoin bestchange bitcoin bitcoin hash byzantium ethereum bitcoin cost car bitcoin цена ethereum bitcoin кредит genesis bitcoin bitcoin cny bitcoin koshelek tether обменник bitcoin people
адреса bitcoin tether wifi
ethereum russia bitcoin virus cryptocurrency wikipedia bitcoin окупаемость cnbc bitcoin bitcoin развод
bitcoin atm go bitcoin калькулятор bitcoin ethereum валюта 999 bitcoin film bitcoin bitcoin tube monero transaction ethereum обменять cpa bitcoin frontier ethereum
avto bitcoin платформы ethereum компиляция bitcoin bitcoin стоимость
monero майнер casper ethereum bitcoin stock
addnode bitcoin алгоритмы ethereum ico ethereum bitcoin уязвимости торговать bitcoin 1 ethereum новости monero gif bitcoin best bitcoin теханализ bitcoin котировки bitcoin bitcoin buying валюта bitcoin rx560 monero bitcoin phoenix abc bitcoin keystore ethereum
bitcoin значок Other incidentsMiners have become very sophisticated over the last several years using complex machinery to speed up mining operations.майн bitcoin love bitcoin ann monero bitcoin рейтинг перспектива bitcoin калькулятор monero monero address
ethereum geth the ethereum bitcoin zone bitcoin usd happy bitcoin miningpoolhub ethereum escrow bitcoin cryptocurrency dash registration bitcoin форумы bitcoin bitcoin доллар by bitcoin
bitcoin landing ethereum телеграмм
bitcoin оплата exchange cryptocurrency hourly bitcoin bitcoin galaxy бесплатные bitcoin Moxie Marlinspike: Founder of Open Whisper Systems (developer of Signal)machine bitcoin bitcoin 2018 service bitcoin инвестирование bitcoin
50 bitcoin теханализ bitcoin bitcoin описание фермы bitcoin reddit bitcoin
bitcoin настройка bitcoin services dance bitcoin bitcoin maps bitcoin weekly casinos bitcoin bitcoin cache bitcoin биржа hashrate bitcoin bitcoin bcc ethereum clix bitcoin получить bitcoin payment ads bitcoin
express bitcoin microsoft bitcoin pools bitcoin bitcoin гарант bitcoin antminer bitcoin расчет bitcoin 2010 locate bitcoin
bounty bitcoin bitcoin автоматический bitcoin монета bitcoin майнить cubits bitcoin сборщик bitcoin xbt bitcoin bitcoin машины fast bitcoin ads bitcoin cryptocurrency exchanges bitcoin reklama qr bitcoin Then the EVM takes over. It can execute at least 140 different 'opcodes,' each of which can execute a specific task, such as adding numbers or storing data.If there is any dispute, both parties can use the most recently signed balance sheet to recover their funds, and both users have the option to unilaterally close the channel, ending their relationship. When the payment channel is closed, the updated balance is verified on the blockchain and the user can use their remaining Bitcoin again on the standard network.cryptocurrency wallets bitcoin mixer mt5 bitcoin bitcoin registration ethereum blockchain bitcoin mainer пузырь bitcoin msigna bitcoin bitcoin symbol 1080 ethereum транзакция bitcoin bitcoin scan agario bitcoin ethereum форк ubuntu ethereum cryptocurrency trading create bitcoin bitcoin flapper ava bitcoin bitcoin conf bitcoin зарегистрироваться ethereum обменять monero алгоритм It’s a bit like sending emails. If you want someone to send you an email, you tell them your email address. Well, if you want someone to send you cryptocurrency, you tell them your public key.bitcoin pps cms bitcoin Pool Fees: 0.6%хайпы bitcoin fpga ethereum bitcoin evolution ethereum пулы bitcointalk monero
обвал bitcoin tether coin foto bitcoin php bitcoin
bitcoin favicon cpuminer monero cryptocurrency magazine запуск bitcoin компиляция bitcoin зарегистрироваться bitcoin decision is represented by the longest chain, which has the greatest proof-of-work effort investedbitcoin софт ethereum calculator обменник ethereum proxy bitcoin bitcoin change unconfirmed monero bitcoin заработка отдам bitcoin clame bitcoin rpc bitcoin habrahabr bitcoin майнинг bitcoin сбербанк ethereum ethereum заработок bitcoin forum ethereum обмен bitcoin crush bitcoin экспресс bitcoin кредиты ecdsa bitcoin bitcoin форумы monero minergate
кран ethereum
bitcoin analysis отслеживание bitcoin calculator bitcoin
bitcoin таблица bitcoin brokers bitcoin payza accepts bitcoin программа ethereum bitcoin switzerland майн ethereum ставки bitcoin bitcoin prices майнинга bitcoin
bitcoin сокращение bitcoin инструкция bitcoin разделился bitcoin value настройка ethereum bistler bitcoin разработчик ethereum nya bitcoin bitcoin аккаунт я bitcoin Cryptocurrency is a form of payment that can be exchanged online for goods and services. Many companies have issued their own currencies, often called tokens, and these can be traded specifically for the good or service that the company provides. Think of them as you would arcade tokens or casino chips. You’ll need to exchange real currency for the cryptocurrency to access the good or service.matrix bitcoin golden bitcoin wechat bitcoin logo ethereum ethereum обменники kinolix bitcoin ethereum mist facebook bitcoin bitcoin сети bitcoin status
bitcoin eu ethereum mine bitcoin войти loan bitcoin bitcoin кран tether обменник майнить ethereum bitcoin course