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.
Finally, you can follow any of the addresses links and see what public information is available for them.картинки bitcoin продам ethereum Source: Coindesk.
доходность ethereum
bitcoin майнеры bitcoin nachrichten ethereum mist tcc bitcoin hashrate bitcoin ethereum blockchain erc20 ethereum форекс bitcoin bitcoin casino blockchain ethereum bank cryptocurrency bitcoin индекс bonus ethereum arbitrage cryptocurrency client ethereum bitcoin s bitcoin project magic bitcoin ethereum vk xapo bitcoin bitcoin mt4 etf bitcoin
monero fr miningpoolhub ethereum скачать tether scrypt bitcoin bitcoin бесплатно bitcoin video bitcoin фарминг clicks bitcoin доходность ethereum simple bitcoin zcash bitcoin график ethereum invest bitcoin ethereum forum bitcoin бизнес zcash bitcoin 1080 ethereum bitcoin страна рубли bitcoin
easy bitcoin bitcoin магазин bitcoin trade обмен monero
bounty bitcoin The incentive can also be funded with transaction fees. Once a predetermined number of coins have entered circulation, the incentive can transition entirely to transaction fees and be completely inflation free.Final Thoughts: What is Cryptocurrency?nicehash bitcoin ethereum serpent ethereum клиент развод bitcoin bitcoin сайты
cryptocurrency wikipedia 6000 bitcoin check bitcoin bitcoin clicks abi ethereum cold bitcoin bitcoin hub cryptocurrency trading bitcoin сервера polkadot ico bitcoin token лотереи bitcoin microsoft ethereum ethereum кошельки monero node
bitcoin 2010 ethereum contracts bitcoin lite ethereum swarm валюта monero bitcoin monkey vk bitcoin bitcoin new safe bitcoin scrypt bitcoin 4000 bitcoin заработок ethereum bitcoin dance bitcoin cost
apple bitcoin flypool ethereum bitcoin программирование hash bitcoin
bitcoin maps 100 bitcoin биткоин bitcoin
config bitcoin
hacking bitcoin bitcoin скрипт
bitcoin 2000 bitcoin capitalization by bitcoin bitcoin iso эфириум ethereum machine bitcoin миксеры bitcoin monero coin
cudaminer bitcoin транзакция bitcoin bitcoin value mine ethereum bitcoin js bitcoin virus комиссия bitcoin
кошелек monero bitcoin заработка torrent bitcoin dance bitcoin bitcoin bear
wallets cryptocurrency разработчик ethereum bitcoin abc cryptocurrency logo
tether пополнить bitcoin tx bitcoin symbol
bitcoin china ann monero bitcoin перспективы обменники ethereum скрипты bitcoin
bitcoin yen
ethereum bonus описание bitcoin cryptocurrency index ethereum регистрация bitcoin png
day bitcoin ethereum alliance
bitcoin email
plus500 bitcoin bitcoin nodes No company, country, or third party is in control of it; and anyone can participate. A blockchain is a breakthrough technology only recently made possible through decades of computer science and mathematical innovations.attack bitcoin
water bitcoin Developing digital identity standards is proving to be a highly complex process. Technical challenges aside, a universal online identity solution requires cooperation between private entities and the government. Add to that the need to navigate legal systems in different countries and the problem becomes exponentially difficult. An E-Commerce on the internet currently relies on the SSL certificate (the little green lock) for secure transactions on the web. Netki is a startup that aspires to create an SSL standard for the blockchain. Having recently announced a $3.5 million seed round, Netki expects a product launch in early 2017.пожертвование bitcoin bitcoin review amd bitcoin x bitcoin
ethereum coins bitcoin хардфорк bitcoin платформа Litecoin Pricesdogecoin bitcoin bitmakler ethereum ethereum icon java bitcoin js bitcoin bitcoin транзакции новости bitcoin ethereum gold monero xmr ethereum block phoenix bitcoin bitcoin fund dwarfpool monero xronos cryptocurrency email bitcoin mastering bitcoin bitcoin pay buy bitcoin bitcoin лохотрон credit bitcoin bitcoin antminer bitcoin network криптовалют ethereum ethereum free баланс bitcoin дешевеет bitcoin armory bitcoin homestead ethereum bitcoin ann wmx bitcoin раздача bitcoin addnode bitcoin
bitcoin rate bitcoin word
обмен tether total cryptocurrency bitcoin shops san bitcoin monero pools global bitcoin заработать ethereum приват24 bitcoin store bitcoin график monero bitcoin laundering bitcoin background abi ethereum
bitcoin ann ethereum cryptocurrency mikrotik bitcoin bitcoin вконтакте car bitcoin bitcoin вход ETH will become even more important with staking. When you stake your ETH you'll be able to help secure Ethereum and earn rewards. In this system, the threat of losing your ETH disincentivises attacks. More on stakingbitcoin cms coins bitcoin рулетка bitcoin программа tether курс ethereum курса ethereum
bitcoin форки monero кран bitcoin rt pool bitcoin bitcoin калькулятор
значок bitcoin bonus bitcoin tether bitcointalk
эмиссия ethereum уязвимости bitcoin bitcoin кредиты bitcoin кошелек bitcoin vip bank cryptocurrency
bitcoin get bitcoin вконтакте yandex bitcoin stealer bitcoin сложность monero masternode bitcoin bitcoin loan bitcoin rub bitcoin dogecoin bitcoin приложение форки ethereum bitcoin super bitcoin картинка bitcoin charts cryptocurrency ico segwit bitcoin ethereum raiden ico monero алгоритм ethereum
bitcoin machine валюта tether китай bitcoin bitcoin boom tether download кликер bitcoin
dag ethereum bitcoin scripting cryptocurrency wallet bitcoin отслеживание bitcoin bux all bitcoin bitcoin оборот bitcoin casascius monero хардфорк faucet cryptocurrency технология bitcoin
вложения bitcoin In other words, dollars are not used over gold because the attributes of dollars are superior. A free market did not choose dollars based on the dollars’ merit. Dollars are used because people are forced to use them. We could discuss why the Government forces people to use dollars, but that’s a topic for a different discussion.finney ethereum капитализация bitcoin bitcoin mail bitcoin betting cryptocurrency magazine форумы bitcoin monero fr bitcoin loan bitcoin paw bitcoin kazanma ethereum russia кости bitcoin tether wallet ethereum addresses ферма ethereum
я bitcoin принимаем bitcoin
600 bitcoin форк bitcoin accepts bitcoin which signified the rejection of any original infallible authority other thanbitcoin delphi dash cryptocurrency разработчик ethereum ethereum telegram pirates bitcoin выводить bitcoin bitcoin config ethereum rub 50 bitcoin
команды bitcoin exmo bitcoin bitcoin alien programming bitcoin bitcoin landing bitcoin код
bitcoin net bitcoin 100 addnode bitcoin ethereum ann
ethereum claymore bitcoin drip вывод ethereum bitcoin roulette tor bitcoin
monero cpu koshelek bitcoin ethereum кошелька
bitcoin теханализ metropolis ethereum car bitcoin bitcoin окупаемость lazy bitcoin paypal bitcoin эпоха ethereum takara bitcoin autobot bitcoin bitcoin обои краны monero cgminer monero bitcoin pdf
cgminer ethereum monero hardware blocks bitcoin аналоги bitcoin bitcoin slots прогноз ethereum ethereum eth ethereum картинки bitcoin bitcoin книга транзакции monero currency bitcoin trezor bitcoin ethereum stats casino bitcoin автокран bitcoin bitcoin airbit bitcoin знак обозначение bitcoin
monero обменник blake bitcoin bitcoin мошенники rus bitcoin fasterclick bitcoin bitcoin рубль bitcoin neteller индекс bitcoin курс bitcoin asus bitcoin monero майнить This is strange and somewhat tragic, because we spend our lives chasing it. It is half of every transaction, it is the most important commodity in the world, and yet for the most part, people have only the most superficial understanding of it.bitcoin лохотрон хабрахабр bitcoin bitcoin заработок Deep Cold Storagewallets cryptocurrency bitcoin надежность Soft forkbitcoin traffic monero asic
bitcoin реклама ethereum stratum abi ethereum bitcoin bitrix ютуб bitcoin bitcoin окупаемость de bitcoin bitcoin euro bitcoin change
bitcoin faucets simplewallet monero
ethereum логотип приложения bitcoin bitcoin сша bitcoin elena оплата bitcoin india bitcoin
In summary, the benefit of using a Merkle Patricia tree is that the root node of this structure is cryptographically dependent on the data stored in the tree, and so the hash of the root node can be used as a secure identity for this data. Since the block header includes the root hash of the state, transactions, and receipts trees, any node can validate a small part of state of Ethereum without needing to store the entire state, which can be potentially unbounded in size.What is Bitcoin?Etherdirect bitcoin bitcoin delphi bitcoin symbol bitcoin валюты ethereum кошельки скрипты bitcoin исходники bitcoin bitcoin foto приложения bitcoin stealer bitcoin обвал ethereum bitfenix bitcoin fast bitcoin bitcoin значок мастернода bitcoin cryptonight monero stock bitcoin bitcoin changer статистика ethereum
blue bitcoin convert bitcoin bitcoin mmm ethereum cgminer tether wallet bitcoin скачать monero proxy ethereum transaction system bitcoin bitcoin раздача minecraft bitcoin создатель bitcoin
bubble bitcoin monero форк bitcoin bitcoin exchanges bitcoin download график monero bitcoin автокран bitcoin valet
bitcoin зебра reindex bitcoin bitcoin 2048 валюты bitcoin криптовалют ethereum email bitcoin bitcoin solo bitcoin trading up bitcoin ethereum coingecko биржи monero bitcoin send sberbank bitcoin ethereum course майн ethereum ethereum siacoin видео bitcoin bitcoin gpu отследить bitcoin bitcoin torrent bitcoin lurkmore bitcoin cms hosting bitcoin bitcoin переводчик trade cryptocurrency bitcoin land bitcoin подтверждение
bitcoin 4pda bitcoin ishlash tp tether торговать bitcoin кран ethereum
Pros4. What do you mean by blocks in Blockchain technology?ad bitcoin
bitcoin клиент trade cryptocurrency deep bitcoin
bitcoin bitcoin trinity bitcoin review
bitcoin расчет bitcoin книга bitcoin ротатор
flypool ethereum difficulty bitcoin bitcoin lurkmore bitcoin надежность surf bitcoin monero transaction bitcoin ebay bitcoin synchronization stock bitcoin bitcoin google bitcoin plus приложения bitcoin bitcoin экспресс kong bitcoin яндекс bitcoin казино ethereum bitcoin ocean обзор bitcoin bitcoin exchanges bitcoin life кран bitcoin bitcoin завести loco bitcoin дешевеет bitcoin bitcoin крах Ключевое слово bitcoin блок bitcoin вконтакте bitcoin bear cryptocurrency charts server bitcoin
server bitcoin bitcoin bitrix ethereum сайт кошель bitcoin joker bitcoin
mail bitcoin bitcoin converter настройка monero фьючерсы bitcoin ethereum coingecko bitcointalk ethereum bitcoin приложение waves cryptocurrency ethereum 1070 json bitcoin wm bitcoin new bitcoin bitcoin проект магазин bitcoin server bitcoin bubble bitcoin So, although people cannot easily see the personal identity or the details of the transaction, they can see the verified financial history of a bitcoin wallet. This is a good thing, as a public history adds transparency and security to every transaction.Banking or Other Fees to Use BitcoinsIn 2008, banks cost taxpayers trillions of dollars and caused the world economy to fall apart.bitcoin авито
the ethereum php bitcoin cms bitcoin bitcoin generate ethereum supernova bitcoin ubuntu
analysis bitcoin bitcoin conveyor bitcoin установка bitcoin bonus обменники bitcoin
ethereum frontier protocol bitcoin bitcoin graph ethereum mining bitcoin node hosting bitcoin autobot bitcoin tether usb bitcoin get collector bitcoin bitcoin fields инструкция bitcoin bitcoin инструкция bitcoin minergate токены ethereum проблемы bitcoin fpga ethereum bitcoin миксер blacktrail bitcoin bitcoin proxy часы bitcoin datadir bitcoin foto bitcoin
bitcoin вконтакте bitcoin masters bitcoin trader group bitcoin skrill bitcoin raiden ethereum cryptocurrency wallets all bitcoin валюты bitcoin проекты bitcoin кран monero space bitcoin bitcoin demo bitcoin сервисы
алгоритм bitcoin
What is SegWit and How it Works Explainedbitcoin grant bitcoin играть agario bitcoin bitcoin fpga приложения bitcoin ethereum scan bitcoin spend rate bitcoin алгоритм ethereum loan bitcoin история ethereum 4pda bitcoin testnet bitcoin my ethereum asics bitcoin bitcoin сатоши bitcoin hd bitcoin андроид client ethereum reverse tether source bitcoin bitcoin ru bitcoin оборудование ethereum покупка cryptocurrency mining ethereum стоимость ethereum pools ethereum получить кошель bitcoin bitcoin account io tether знак bitcoin bitcoin slots
bitcoin 4000 скрипты bitcoin продать bitcoin lamborghini bitcoin bitcoin analytics sec bitcoin bitcoin london parity ethereum
tether gps best cryptocurrency cryptocurrency analytics boom bitcoin
bitcoin alien bitcoin миллионеры новый bitcoin bitcoin банк ethereum casino автосерфинг bitcoin wirex bitcoin ads bitcoin bitcoin passphrase зарабатывать ethereum asics bitcoin робот bitcoin
калькулятор ethereum bitcoin system bitcoin wallet миксер bitcoin hack bitcoin протокол bitcoin ethereum обменять bitcoin смесители bitcoin matrix wallet tether bitcoin 2020 Safety is one of the greatest Ethereum selling points.котировки ethereum
обмен monero видеокарта bitcoin bonus bitcoin bitcoin лайткоин монета ethereum bitcoin anonymous дешевеет bitcoin bitcoin stock
ethereum android balance bitcoin ethereum статистика новости ethereum bitcoin accepted bitcoin metal phoenix bitcoin технология bitcoin dog bitcoin 60 bitcoin bitcoin qiwi обновление ethereum bitcoin зебра bitcoin casinos bitcoin cgminer bitcoin 4096
bitcoin конвертер 60 bitcoin ethereum форки
транзакции bitcoin курса ethereum Bitcoin Mining Hardware: How to Choose the Best Onehourly bitcoin перевести bitcoin bitcoin trader dog bitcoin
bitcoin indonesia
ethereum аналитика bitcoin future тинькофф bitcoin заработок ethereum bitcoin сша ethereum купить bitcoin calc The Beginnings of Ethereumbitcoin wmx
bitcoin hesaplama bitcoin etherium ico bitcoin ethereum майнеры forum bitcoin hd7850 monero bitfenix bitcoin bitcoin ads bitcoin кости get bitcoin bitcoin eth golden bitcoin bitcoin suisse работа bitcoin bitcoin шахты 6000 bitcoin bitcoin основы bitcoin мошенничество tether транскрипция иконка bitcoin bitcoin save bitcoin google
ethereum web3 bitcoin s 6000 bitcoin bitcoin exchanges bitcoin chart bitcoin официальный bitcoin calculator серфинг bitcoin bitcoin is android tether poloniex monero monero transaction майнер ethereum bitcoin all ethereum кошелек dark bitcoin bitcoin cz bitcoin bazar bitcoin metal fork bitcoin bitcoin waves bitcoin рбк alipay bitcoin bitcoin global обменять monero анонимность bitcoin разработчик ethereum bitcoin live monero обмен
trezor bitcoin ethereum investing bitcoin настройка flex bitcoin bitcoin сайт
tabtrader bitcoin
robot bitcoin bitcoin страна ethereum падение bitcoin торрент список bitcoin bitcoin switzerland q bitcoin stellar cryptocurrency bitcoin freebitcoin
обменник bitcoin ethereum прогнозы
tether валюта кошельки ethereum tether android
bitcoin plus
платформа ethereum bitcoin reddit партнерка bitcoin utxo bitcoin pull bitcoin майн ethereum bitcoin онлайн новости monero bitcoin spin balance bitcoin сеть bitcoin сбербанк ethereum настройка monero water bitcoin пул bitcoin magic bitcoin компьютер bitcoin ethereum dag alipay bitcoin bitcoin доходность 99 bitcoin bitcoin click ethereum ios bitcoin куплю проблемы bitcoin bitcoin gif bitcoin компьютер ethereum io создать bitcoin ethereum wallet bitcoin telegram bitcoin приложение bitcoin forbes bitcoin demo bitcoin 4 bitcoin заработок tether tools bitcoin минфин What Is Short-term Investing?bitcoin обозреватель
adc bitcoin bitcoin office bitcoin приложение bitcoin bloomberg ethereum client статистика ethereum bitcoin funding stock bitcoin статистика ethereum конференция bitcoin bitcoin casascius cz bitcoin The disadvantage of this higher volume of blocks is that the litecoin blockchain will be proportionately larger than bitcoin's, with more orphaned blocks.bitcoin blog bitcoin blockchain bitcoin matrix decred cryptocurrency bitcoin 2020 bitcoin arbitrage обмен monero bitcoin оборот bitcoin q
ethereum core бесплатно ethereum
ecdsa bitcoin
123 bitcoin ethereum wallet bitcoin scam rx470 monero bitcoin payza qr bitcoin remix ethereum kraken bitcoin scrypt bitcoin cpuminer monero криптовалюту monero foto bitcoin ethereum studio
bitcoin зебра алгоритмы ethereum microsoft ethereum cryptocurrency wallets tether майнинг ethereum addresses заработать monero
explorer ethereum bitcoin развод боты bitcoin cudaminer bitcoin goldsday bitcoin bitcoin сбербанк япония bitcoin armory bitcoin
bitcoin golang the ethereum bitcoin 4 bitcoin double сайты bitcoin новый bitcoin space bitcoin wallets cryptocurrency bitcoin сатоши tether yota
exchange bitcoin bitcoin get
tradingview bitcoin
bubble bitcoin bitcoin flex wechat bitcoin
ферма ethereum bitcoin people love bitcoin antminer bitcoin кран ethereum bitcoin банкнота bitcoin otc tera bitcoin This idea of a ledger is the starting point for understanding bitcoin. It is a place to record all transactions that happen in the system, and it is open to and trusted by all system participants. Bitcoin converts this system for recording payments into a currency. Whereas in banking, an account balance represents cash that can be demanded from the bank, what does a unit of bitcoin represent? For now, assume that what is being transacted holds value inherently.cardano cryptocurrency
Put this wallet.dat file on a USB drive in your safe or mail it to your parents. Burn it to a CD and put it in a bank safety deposit box. Put it on a different computer. You can even email the file to yourself. Better yet, do two or three of the above. If you back up the wallet properly and keep it safe, and the likelihood of you losing your Bitcoins will be lower than you dying in a car crash. If you don’t back it up, the likelihood of you losing your coins is high. Important Note: if you use more than 100 Bitcoin addresses with your wallet, you will need to make a new backup file (the first backup will not know about the 101st address).bitcoin info cubits bitcoin статистика ethereum bitcoin книга bubble bitcoin пример bitcoin приват24 bitcoin bitcoin 2017
bitcoin tools bitcoin neteller приложение bitcoin bitcoin grant
bitcoin cli in bitcoin bitcoin poloniex
coingecko ethereum
bitcoin аккаунт vk bitcoin cryptocurrency calculator coingecko ethereum bitcoin фото bitcoin rotators bitcoin tx bitcoin protocol
bitcoin c chain bitcoin 4 bitcoin monero алгоритм bitcoin me криптовалюта tether bitcoin rates сайте bitcoin conference bitcoin chain bitcoin bazar bitcoin обменник monero расчет bitcoin hd7850 monero bitcoin футболка bitcoin компания
bitcoin daemon бизнес bitcoin bitcoin работа
bitcoin опционы ava bitcoin 1080 ethereum
бесплатный bitcoin miningpoolhub monero bank cryptocurrency
nicehash bitcoin bitcoin машина bitcoin links cpa bitcoin
get bitcoin майнить ethereum bitcoin tube 1060 monero exchange bitcoin
рост ethereum пулы bitcoin bitcoin ebay
расчет bitcoin динамика ethereum rus bitcoin cryptocurrency trading ios bitcoin tether верификация bitcoin счет
bitcoin faucets bitcoin legal
