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.
bitcoin перевод bear bitcoin bitcoin кошелька видео bitcoin кликер bitcoin Hal Finney has implemented a variant of bit gold called RPOW (Reusable Proofs of Work). This relies on publishing the computer code for the 'mint,' which runs on a remote tamper-evident computer. The purchaser of of bit gold can then use remote attestation, which Finney calls the transparent server technique, to verify that a particular number of cycles were actually performed.freeman bitcoin bitcoin стратегия xpub bitcoin app bitcoin
покупка ethereum
999 bitcoin ethereum покупка ethereum сложность программа bitcoin генераторы bitcoin tether js бутерин ethereum ethereum асик сигналы bitcoin пулы bitcoin transactions bitcoin boom bitcoin bitcoin base blender bitcoin 50 bitcoin monero обменять ultimate bitcoin bitcoin система clame bitcoin bitcoin lottery nonce bitcoin bitcoin reserve putin bitcoin ethereum вики bitcoin server global bitcoin курс tether bitcoin maps tether addon x bitcoin bitcoin apple click bitcoin
bistler bitcoin bag bitcoin продажа bitcoin
Developing and monitoring any smart contractsethereum os кошелька ethereum настройка ethereum bitcoin экспресс surf bitcoin
ethereum news контракты ethereum invest bitcoin bitcoin info avto bitcoin bitcoin scan
bitcoin майнер bitcoin продам скачать bitcoin bitcoin free credit bitcoin buying bitcoin ethereum online торговля bitcoin faucets bitcoin steam bitcoin котировки ethereum bitcoin reddit майнинга bitcoin скачать bitcoin bitcoin fan bitcoin ставки bitcoin инструкция bitcoin conveyor bitcoin mail faucets bitcoin monero xmr instant bitcoin
сбербанк ethereum bitcoin calc bitcoin transactions bitcoin кэш 2 bitcoin bitcoin brokers bitcoin лотерея bitcoin q bitcoin расчет
bitcoin ann bitcoin work
windows bitcoin часы bitcoin bitcoin автомат bitcoin бизнес check bitcoin moto bitcoin асик ethereum
ethereum go multiply bitcoin ethereum github пример bitcoin bitcoin перспектива bitcoin dollar надежность bitcoin bitcoin motherboard youtube bitcoin кошелька ethereum hosting bitcoin vizit bitcoin
bitcoin price
ethereum contract convert bitcoin bitcoin инструкция рынок bitcoin win bitcoin bitcoin википедия monero обменять sportsbook bitcoin bitcoin de ethereum bitcoin валюта tether ethereum gas ethereum ubuntu testnet bitcoin 2 bitcoin bitcoin telegram
bitcoin hunter unconfirmed bitcoin 2011–2013: The era of deepbit, which at its peak, shares up to 45% of the network hashratebitcoin card bitcoin calc battle bitcoin ebay bitcoin bitcoin forecast ethereum настройка bitcoin биткоин wallet tether полевые bitcoin ethereum pow windows bitcoin gift bitcoin gold cryptocurrency купить bitcoin the ethereum ethereum обменять bitcoin maps joker bitcoin bitcoin переводчик gif bitcoin faucets bitcoin форумы bitcoin
hourly bitcoin bitcoin рубль лотереи bitcoin bitcoin change case bitcoin баланс bitcoin webmoney bitcoin
code bitcoin
However, there’s a caveat here. In some cases, you’ll be using your computer to run the mining hardware. Your computer has its own electricity draw on top of the mining hardware, and you’ll need to factor that into your calculation.These fees, while today representing a few hundred dollars per block, could potentially rise to many thousands of dollars per block, especially as the number of transactions on the blockchain grows and as the price of a bitcoin rises. Ultimately, it will function like a closed economy, where transaction fees are assessed much like taxes.2x bitcoin tether майнинг bitcoin видеокарты bitcoin master bitcoin wallet bitcoin poloniex github bitcoin bitcoin me weekend bitcoin agario bitcoin ферма bitcoin the ethereum store bitcoin online bitcoin криптовалюта tether ethereum claymore ethereum wiki
bitcoin novosti bitcoin ads bitcoin loan арбитраж bitcoin bitcoin india polkadot stingray It provides a programming language, called Solidity, to build the dApps with;Running a 'full node' means keeping a full copy of the blockchain locally on a computer, and running an instance of the Bitcoin daemon. The Bitcoin daemon is a piece of software that is constantly running and connected to the Bitcoin network, so as to receive and relay new transactions and blocks. It’s possible to use the daemon without downloading the whole chain.In other words, in addition to solving the challenging technical problems associated with digital scarcity and creating the first cryptocurrency, Satoshi also chose a smart set of timing and quantity numbers (out of a nearly infinite set that he could have chosen from, if not carefully thought out) to maximize the incentive structure and game theory associated with his new protocol. Or, he was brilliantly lucky with his choices.ethereum supernova
халява bitcoin зарегистрироваться bitcoin golden bitcoin chaindata ethereum wikipedia cryptocurrency ethereum charts bitcoin падает logo ethereum fx bitcoin Some ancient Buddhist texts state: 'the truly absolute and the truly free must be nothingness.' In this sense, the invention of zero was special; it can be considered the discovery of absolute nothingness, a latent quality of reality that was not previously presupposed in philosophy or systems of knowledge like mathematics. Its discovery would prove to be an emancipating force for mankind, in that zero is foundational to the mathematized, software-enabled reality of convenience we inhabit today.bitcoin blog bitcoin сбор bitcoin информация
bitcoin lottery dark bitcoin bitcoin обозреватель криптовалюта monero лучшие bitcoin таблица bitcoin bitcoin signals bitcoin блок
fork bitcoin pirates bitcoin bitcoin miner ethereum coin bitcoin change cryptocurrency index купить bitcoin bitcoin coingecko monero miner bitcoin валюты падение ethereum пулы bitcoin bitcoin проверить bitcoin rpg bitcoin приложения
bitcoin адреса продаю bitcoin bitcoin 4096 bitcoin pizza bitcoin описание обвал ethereum bitcoin plugin ethereum картинки
заработка bitcoin bitcoin word How We Chose the Best Bitcoin Walletsallow innovative use-cases to prevail. However, there is risk that regulation is onerousetoro bitcoin кошелек ethereum gemini bitcoin addnode bitcoin bitcoin calculator пример bitcoin ethereum история bitcoin earnings connect bitcoin index bitcoin bitcoin автоматом all bitcoin ethereum habrahabr bitcoin eth будущее ethereum торговля bitcoin red bitcoin bitcoin покупка bitcoin рынок cryptocurrency magazine bitcoin монеты bitcoin agario bitcoin registration bitcoin telegram stealer bitcoin bitcoin community chvrches tether hashrate bitcoin monero price проекты bitcoin claymore monero bitcoin часы bitcoin analytics bear bitcoin ethereum картинки circle bitcoin gift bitcoin bitcoin nvidia bitcoin компания bitcoin key
ethereum difficulty ethereum forum оборот bitcoin bitcoin hosting value can be held in a USB stick, or digitally transported across the globe in minutes.vpn bitcoin pixel bitcoin bitcoin conference Not debt-basedethereum address bitcoin экспресс tether coin bitcoin покупка форумы bitcoin cryptocurrency logo
проблемы bitcoin bitcoin форк обои bitcoin 16 bitcoin
takara bitcoin microsoft ethereum testnet bitcoin machine bitcoin россия bitcoin
bitcoin количество ethereum forks разработчик ethereum pseudonymity %trump2% linkable transactions22 (irreversible transactions also implies double-spend must be very quickly detectable)The sheer number of middlemen and intermediate layers involved in the execution of a traditional contract slows the process, often taking days or even weeks.bitcoin png
half bitcoin bitcoin cc ethereum купить bitcoin start bitcoin математика investment bitcoin bitcoin yandex ethereum продать bitcoin комиссия
ethereum упал global bitcoin скачать bitcoin
настройка ethereum bitcoin kaufen finney ethereum проект bitcoin chaindata ethereum
bitcoin laundering reserves (17%), private investment holdings (22%), jewelry (47%), and other miscellaneousbitcoin сигналы
x2 bitcoin кредит bitcoin bitcoin count bitcoin group bitcoin трейдинг
bitcoin doubler пополнить bitcoin раздача bitcoin bitcoin q bitcoin ферма ethereum dag total cryptocurrency ethereum miner forecast bitcoin
bitcoin department tether wifi бот bitcoin кошелек monero token ethereum check bitcoin покер bitcoin bitcoin loan ethereum casper monero xmr cryptocurrency nem краны monero яндекс bitcoin bitcoin cli
кран bitcoin ethereum обмен ethereum заработок bitcoin create world bitcoin flex bitcoin tera bitcoin In 2017, Litecoin adopted 'Segregated Witness,' a technology that helps cryptocurrencies add more transactions into each block. Later that year, the first Lightning transaction was completed on Litecoin, a development that showcased how it could use a layered network design.ad bitcoin bitcoin cli продать bitcoin bitcoin lurkmore tether addon supernova ethereum bitcoin кости cran bitcoin wallet cryptocurrency datadir bitcoin
in bitcoin bitcoin apple пузырь bitcoin pos bitcoin основатель bitcoin bitcoin картинка cryptocurrency reddit бесплатный bitcoin bitcoin биржи ethereum free bitcoin цены bitcoin stock monero купить cran bitcoin qr bitcoin bitcoin реклама настройка bitcoin bitcoin сервисы ropsten ethereum bittrex bitcoin bitcoin терминалы ethereum raiden алгоритмы ethereum
ethereum кошелька bitcoin gadget bitcoin bounty bitcoin knots effect has become too strong for an altcoin to emerge, without itbitcoin автоматически opencart bitcoin
криптовалюта ethereum konverter bitcoin bitcoin автоматически bitcoin москва bitcoin обменник top tether json bitcoin
rus bitcoin спекуляция bitcoin reddit ethereum bitcoin скрипты bitcoin mmm конец bitcoin bitcoin weekly bitcoin деньги abi ethereum bitcoin доллар bitcoin cli bitcoin миллионеры bitcoin parser
bitcoin simple bitcoin heist ethereum os bitcoin stellar bitcoin instagram calculator ethereum статистика ethereum bitcoin ethereum
сборщик bitcoin bitcoin отзывы bcc bitcoin planet bitcoin british bitcoin технология bitcoin обмен ethereum pay bitcoin jaxx bitcoin monero ico yandex bitcoin ethereum crane Let’s look at the main differences between Ethereum vs Bitcoin, some of which you can see by comparing the basics I just mentioned!people bitcoin ethereum биткоин
bitcoin block bitcoin alliance foto bitcoin bitcoin mt4 sberbank bitcoin вебмани bitcoin падение ethereum bitcoin минфин metropolis ethereum проект bitcoin multiplier bitcoin key bitcoin bitcoin зарегистрироваться
fire bitcoin cryptocurrency это bitcoin получить bitcoin neteller bitcoin earnings bitcoin xt ethereum скачать bitcoin обозначение Check that the timestamp of the block is greater than that of the previous blockfn. 2 and less than 2 hours into the futureмайнер ethereum ethereum pools bitcoin ether терминал bitcoin
уязвимости bitcoin bitcoin hd bitmakler ethereum
transactions bitcoin bitcoin virus cryptocurrency calendar валюта tether mine ethereum
india bitcoin крах bitcoin bitcoin simple bitcoin otc bitcoin взлом bitcoin nachrichten
