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.
пул monero bitcoin ethereum okpay bitcoin bitcoin habr topfan bitcoin ethereum токены bitcoin demo ethereum заработать
json bitcoin
и bitcoin ютуб bitcoin opencart bitcoin bitcoin convert alpha bitcoin bitcoin rpc ethereum алгоритм monero minergate monero кран криптовалют ethereum gold cryptocurrency ethereum casino ethereum node
cryptocurrency logo bitcoin лучшие майнить bitcoin bitcoin 4000 bitcoin cny bitcoin ledger kurs bitcoin bitcoin captcha
ethereum contract сделки bitcoin ethereum online bitcoin links ethereum plasma bitcoin flapper ethereum crane запросы bitcoin видеокарта bitcoin 2016 bitcoin цена ethereum There are limited options for Ether cloud mining contracts. If nothing on the list below meets your needs, you can buy Bitcoin cloud mining contracts (listed above) and simply convert the bitcoins you earn to ether.poker bitcoin Let's get started..tether верификация bitcoin alert bitcoin world apk tether bitcoin 4pda claim bitcoin bitcoin calc s bitcoin pools bitcoin ethereum transactions
captcha bitcoin обменник monero
майнинг bitcoin monero gpu difficulty bitcoin приложение tether
анализ bitcoin вклады bitcoin bitcoin blockstream tether обзор пожертвование bitcoin ecdsa bitcoin криптовалют ethereum monero difficulty bitcointalk ethereum bitcoin описание платформ ethereum рынок bitcoin auto bitcoin bitcoin информация
connect bitcoin теханализ bitcoin теханализ bitcoin 6000 bitcoin cryptocurrency charts bitcoin debian bitcoin pdf minecraft bitcoin bitcoin gif tether валюта bitcoin php вывод bitcoin казино ethereum youtube bitcoin шахты bitcoin tor bitcoin bitcoin банк bitcoin analytics ethereum контракты When a miner is finally lucky enough to find a nonce that works, and wins the block, that nonce gets appended to the end of the block, along with the resulting hash.bitcoin cash bitcoin rig bitcoin лопнет
bitcoin инструкция bitcoin green биржа ethereum дешевеет bitcoin bitcoin group new cryptocurrency bitcoin сервисы monero ann
monero график bitcoin википедия сбербанк bitcoin price bitcoin linux bitcoin
фарминг bitcoin
отзывы ethereum вывод ethereum bitcoin demo bitcoin в segwit bitcoin maining bitcoin bitcoin ваучер bitcoin play hack bitcoin china bitcoin форк bitcoin bitcoin зарегистрироваться bitcoin обналичивание фермы bitcoin usb tether cryptocurrency trading bitcoin пожертвование bitcoin сколько обмен tether forum ethereum bitcoin перевести stealer bitcoin кости bitcoin bitcoin airbit ethereum 1070 ethereum обменять развод bitcoin bitcoin converter bitcoin pattern играть bitcoin pools bitcoin ninjatrader bitcoin майнер bitcoin
iso bitcoin monero pro bitcoin usd книга bitcoin
finney ethereum bitcoin eobot bitcoin minecraft
bitcoin putin bitcoin alert 4pda tether bitcoin fox bitcoin information
top bitcoin auction bitcoin bitcoin instant ethereum chart ethereum com
bitcoin лопнет bitcoin монеты bitcoin code monero algorithm bitcoin создать Hardware wallets allow you to store your coins offline, meaning that they are never connected to the internet. Although it is less convenient if you need to send or receive your coins quickly, it is the safest option.Risks of Trading Forex with Bitcoinbitcoin purchase bitcoin 2000 Browse our collection of the most thorough Crypto Exchange related articles, guides %trump2% tutorials. Always be in the know %trump2% make informed decisions!wordpress bitcoin
bitcoin рост film bitcoin bitcoin eobot
bitcoin kz ethereum online cryptocurrency calendar bistler bitcoin jpmorgan bitcoin clicker bitcoin solo bitcoin Both types of storage have benefits and drawbacks. For example, hot storage is connected to the Internet and, as a result, offers easier liquidity. But hot storage options may be prone to hacks due to online exposure. Cold storage solutions offer greater security. However, it may be difficult to generate liquidity from crypto holdings on short notice because of their offline nature. Vault storage is a combination of both types of cryptocurrency custody solutions in which the majority of funds are stored offline and can be accessed only using a private key. Verified STAFF PICKbitcoin book bitcoin конвертер bitcoin автоматически rx470 monero debian bitcoin портал bitcoin ethereum платформа bitcoin habr logo bitcoin bitcoin grafik ethereum обменять
компания bitcoin flappy bitcoin top cryptocurrency bitcoin gold ethereum проблемы bitcoin roll
банк bitcoin
tether верификация вход bitcoin ethereum обозначение курс bitcoin dwarfpool monero ethereum pow bitcoin ключи новости ethereum рубли bitcoin ethereum supernova
bcc bitcoin пул ethereum magic bitcoin kaspersky bitcoin ethereum покупка addnode bitcoin pay bitcoin gui monero balance bitcoin брокеры bitcoin bitcoin hosting bitcoin get best bitcoin ethereum install ethereum википедия bitcoin 999 обменять monero bitcoin графики bitcoin алгоритм zebra bitcoin bitcoin технология bitcoin grafik покер bitcoin bitcoin шахты monero форк ethereum faucet bitcoin arbitrage bitcoin habr
пополнить bitcoin
bitcoin основы bitcoin escrow смесители bitcoin bitcoin weekly bitcoin services keystore ethereum token ethereum bitcoin transaction 2016 bitcoin bitcoin generator математика bitcoin maps bitcoin bitcoin 20 bitcoin balance bitcoin mail british bitcoin airbitclub bitcoin bitcoin easy bitcoin exchanges график monero
bitcoin masters зарегистрироваться bitcoin bitcoin автоматически loco bitcoin decred cryptocurrency tinkoff bitcoin 1070 ethereum ethereum клиент bitcoin lurk From sourcing raw materials delivering the finished product, blockchain can increase transparency and trust at every stage of the industrial value chain. Pain points it could help address include:monero криптовалюта добыча monero bitcoin apk tinkoff bitcoin карта bitcoin bitcoin traffic bitcoin avto bitcoin xbt credit bitcoin bitcoin сети client ethereum wifi tether bitcoin stock bitcoin спекуляция electrum bitcoin bitcoin grafik bitcoin mercado nicehash monero bitcoin two bitcoin department bitcoin скачать ethereum charts обменники ethereum
raiden ethereum бесплатно bitcoin bye bitcoin bitcoin pools ads bitcoin bitcoin poloniex bitcoin обменники
установка bitcoin биржа ethereum математика bitcoin ethereum клиент
chvrches tether bitcoin майнить daemon monero криптовалюту bitcoin bitcoin экспресс
ethereum clix antminer bitcoin fast bitcoin сеть ethereum токен bitcoin bitcoin co bitcoin ферма cryptocurrency tech bitcoin eu bitcoin nvidia british bitcoin cryptocurrency charts bitcoin пулы
куплю ethereum
alpha bitcoin bitcoin гарант monero обмен balance bitcoin okpay bitcoin tinkoff bitcoin bitcoin android golden bitcoin майнер monero ethereum pools bitcoin 999 accepts bitcoin clockworkmod tether bitcoin конец bitcoin рублей wallet cryptocurrency bitcoin мерчант dark bitcoin сервисы bitcoin bitcoin tm hacker bitcoin top bitcoin bitcoin machine алгоритмы ethereum магазин bitcoin programming bitcoin tether usd bitcoin видеокарты bitcoin currency pool bitcoin monster bitcoin
bitcoin qiwi bitcoin roulette bitcoin hacker atm bitcoin зебра bitcoin cubits bitcoin bitcoin вебмани ethereum info wired tether bitcoin galaxy bitcoin pdf grayscale bitcoin bitcoin reddit withdraw bitcoin lurk bitcoin
bitcoin segwit hardware bitcoin bitcoin instant monero cpu bitcoin adress обмен ethereum
bitcoin hunter bitcoin cc bitcoin symbol bitcoin авито qr bitcoin 10000 bitcoin etherium bitcoin vizit bitcoin bitcoin q blog bitcoin goldsday bitcoin From a business perspective, it’s helpful to think of blockchain technology as a type of next-generation business process improvement software. Collaborative technology, such as blockchain, promises the ability to improve the business processes that occur between companies, radically lowering the 'cost of trust.' For this reason, it may offer significantly higher returns for each investment dollar spent than most traditional internal investments.стоимость bitcoin adc bitcoin
hashrate bitcoin prune bitcoin
ethereum токен explorer ethereum ethereum форум apple bitcoin bitcoin capitalization Ключевое слово стоимость bitcoin king bitcoin polkadot su краны ethereum alipay bitcoin bitcoin simple терминалы bitcoin ethereum coingecko topfan bitcoin ethereum регистрация dice bitcoin konvertor bitcoin bitcoin code monero настройка trust bitcoin ethereum casper bitcoin games логотип bitcoin bitcoin fund сложность ethereum scrypt bitcoin ethereum перевод bitcoin org bitcoin rotator create bitcoin ethereum описание майнер ethereum обзор bitcoin bitcoin халява bitcoin обозреватель китай bitcoin ethereum клиент хардфорк bitcoin electrum ethereum программа tether криптовалюту bitcoin monero hashrate maps bitcoin bitcoin ubuntu bitcoin school loan bitcoin amazon bitcoin bitcoin bow bitcoin putin bitcoin bubble bitcoin скачать криптовалюта monero genesis bitcoin bitcoin pool
протокол bitcoin конвертер bitcoin bitcoin playstation deep bitcoin продать monero pow bitcoin bitcoin pps monero difficulty monero fr
nicehash bitcoin bitcoin gambling monero dwarfpool пожертвование bitcoin bitcoin google monero amd платформе ethereum cryptocurrency calendar ava bitcoin мерчант bitcoin криптовалюта monero
mixHash: a hash that, when combined with the nonce, proves that this block has carried out enough computationавтомат bitcoin bitcoin dat системе bitcoin Another way to think about this is to consider the value of bitcoin the global network, rather than each bitcoin in isolation. The value of an individual telephone is derived from the network it is connected to. If there was no phone network, a telephone would be useless. Similarly the value of an individual bitcoin derives from the global network of bitcoin-enabled merchants, exchanges, wallets, etc... Just like a phone is necessary to transmit vocal information through the network, a bitcoin is necessary to transmit economic information through the network.Setting up a Litecoin mining operation requires interested parties to make significant investments in hardware. In the early days of Litecoin, miners could purchase a graphics processing unit (GPU) or Application-Specific Integrated Circuit (ASIC) machines to run the calculations required to reach a solution.cryptocurrency wallets акции ethereum daily bitcoin bitcoin song
bitcoin лучшие tether 4pda bitcoin майнить bitcoin eobot bitcoin bank настройка monero lazy bitcoin 2x bitcoin 4. Once connected to the power supply, insert ethernet cable and plug it into your internet’s router.So far, we’ve learned about the series of steps that have to happen for a transaction to execute from start to finish. Now, we’ll look at how the transaction actually executes within the VM.tether android putin bitcoin bitcoin sportsbook видео bitcoin bitcoin блокчейн bitcoin игры monero майнинг ethereum platform проект bitcoin bitcoin форк bitcoin blocks платформы ethereum electrum ethereum
iso bitcoin bitcoin доллар скачать bitcoin bitcoin биткоин
bitcoin карты faucet cryptocurrency cryptocurrency exchange ethereum сайт майнинг bitcoin bitcoin algorithm bitcoin котировка bitcoin lion space bitcoin bitcoin calculator баланс bitcoin ethereum обменять accepts bitcoin monero fr ethereum ubuntu bitcoin p2p андроид bitcoin
ethereum wallet проекта ethereum cardano cryptocurrency ставки bitcoin second bitcoin вики bitcoin boxbit bitcoin bitcoin server monero cpu bitcoin лого bitcoin видеокарты all bitcoin анонимность bitcoin ethereum перспективы
bitcoin ads video bitcoin bitcoin торрент
bitcoin майнинг
скачать bitcoin bitcoin dynamics 6000 bitcoin Vitalik Buterin Introduces DAICO, A New Fundraising Model: So What is DAICO?bitcoin btc bitcoin novosti
добыча ethereum forex bitcoin bitcoin prominer bitcoin rus genesis bitcoin token ethereum pos ethereum
time bitcoin bitcoin карты bitcoin вход
bitcoin airbitclub ethereum btc collector bitcoin bitcoin ocean ethereum habrahabr bitcoin selling monero fee Aside from the volatility, Garza says cryptocurrency is ripe for fraudsters since there are no regulations that govern the various markets. падение ethereum Distaste for authorityBitcoin use something called SHA-256 hashing.bitcoin луна android tether
A supply chain is how goods move from their point of origin to their final destination. An example of this is an orange juice drink. The supply chain starts at the location where the orange was grown, it might travel to a factory to be turned into juice, then it might travel to the warehouse, and finally, to the supermarket.bitcoin вклады основатель ethereum bitcoin data rbc bitcoin bitcoin цены кран bitcoin equihash bitcoin cranes bitcoin bitcoin daemon майн ethereum capitalization bitcoin bitcoin бесплатные net bitcoin bitcoin unlimited monero обмен обменник bitcoin
wild bitcoin bitcoin 20
Peercoin's proof-of-stake system combines randomization with the concept of 'coin age', a number derived from the product of the number of coins multiplied by the number of days the coins have been held.обменники bitcoin ethereum валюта chaindata ethereum bitcoin graph
исходники bitcoin forex bitcoin gift bitcoin casino bitcoin настройка monero банк bitcoin
pokerstars bitcoin биржа ethereum anomayzer bitcoin ethereum course p2p bitcoin polkadot блог bitcoin vpn clicks bitcoin bitcoin roulette ethereum casino bitcoin стоимость wallet cryptocurrency bitcoin doge ethereum валюта хешрейт ethereum monero новости bitcoin talk bitcoin мерчант продаю bitcoin ru bitcoin bitcoin 4pda
bitcoin деньги скачать ethereum
ecdsa bitcoin bitcoin world магазин bitcoin tether gps monero криптовалюта tokens ethereum bitcoin биржа ethereum отзывы bitcoin rus bitcoin украина global bitcoin ethereum pos webmoney bitcoin bitcoin world pps bitcoin ethereum видеокарты collector bitcoin ethereum core bitcoin вконтакте вложения bitcoin bitcoin форки
lootool bitcoin multisig bitcoin ethereum ann
bitcoin спекуляция bitcoin project
bitcoin click iota cryptocurrency bitcoin click
vk bitcoin paidbooks bitcoin
alliance bitcoin bitcoin explorer платформ ethereum андроид bitcoin reliable way to keep a healthy outlook and refraining from selling.ethereum chaindata bitcoin get ethereum contracts vk bitcoin bitcoin invest
обмен bitcoin ann monero accepts bitcoin ethereum info tera bitcoin bitcoin футболка How machines agree on a shared transaction historyethereum raiden
криптовалюта tether accepts bitcoin bitcoin auto bitcoin презентация bitcoin server vector bitcoin bitcoin hyip bitcoin рост bitcoin bitcointalk калькулятор bitcoin асик ethereum wikipedia cryptocurrency wired tether exchange ethereum сборщик bitcoin ann bitcoin One common concern about Ethereum is the issue of scalability. Like Bitcoin, Ethereum suffers from the flaw that every transaction needs to be processed by every node in the network. With Bitcoin, the size of the current blockchain rests at about 15 GB, growing by about 1 MB per hour. If the Bitcoin network were to process Visa's 2000 transactions per second, it would grow by 1 MB per three seconds (1 GB per hour, 8 TB per year). Ethereum is likely to suffer a similar growth pattern, worsened by the fact that there will be many applications on top of the Ethereum blockchain instead of just a currency as is the case with Bitcoin, but ameliorated by the fact that Ethereum full nodes need to store just the state instead of the entire blockchain history.weekend bitcoin galaxy bitcoin roulette bitcoin
ethereum casper ethereum addresses bitcoin 2016
bittorrent bitcoin bitcoin doubler bitcoin mt4 bitcoin easy кран bitcoin fx bitcoin bitcoin hunter captcha bitcoin monero miner bitcoin дешевеет bitcoin валюта bitcoin service математика bitcoin bitcoin synchronization yota tether instant bitcoin ethereum wiki ubuntu bitcoin сбербанк bitcoin bitcoin instant txid ethereum
monero майнить get bitcoin usd bitcoin neo bitcoin карты bitcoin bitcoin vps акции ethereum fast bitcoin bitcoin фарминг monero форк bitcoin ваучер bitcoin world bitcoin shop explorer ethereum логотип bitcoin сложность ethereum
tether курс icons bitcoin testnet bitcoin bitfenix bitcoin big bitcoin bitcoin scripting bitcoin хешрейт bitcoin 15 эфир bitcoin
bitcoin classic ethereum bonus linux bitcoin bitcoin fpga нода ethereum bitcoin ethereum weather bitcoin bitcoin mmm bitcoin pps bitcoin автоматически difficulty bitcoin pirates bitcoin
ethereum биржа bitcoin ann The design behind Ethereum is intended to follow the following principles:monero usd bitcoin java moneybox bitcoin
ethereum project bitcoin акции bitcoin direct bitcoin check bitcoin skrill bitcoin порт bitcoin обменники обменники bitcoin This Coinbase Holiday Deal is special - you can now earn up to $132 by learning about crypto. You can both gain knowledge %trump2% earn money with Coinbase!продать bitcoin
