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 start bitcoin автоматический история ethereum price bitcoin free bitcoin bitcoin вконтакте bitcoin комиссия bitcoin блокчейн magic bitcoin bitcoin get bitcoin matrix ethereum wikipedia
bitcoin eth
bitcoin монет bitcoin оборот ethereum кран bitcoin рухнул bitcoin payeer bitcoin fake playstation bitcoin gadget bitcoin blockchain ethereum ethereum создатель xbt bitcoin bitcoin пополнить bitcoin api bitcoin habr bitcoin хардфорк tether майнинг покупка ethereum bitcoin etherium bitcoin стратегия ethereum difficulty ethereum заработать alpha bitcoin mmm bitcoin ethereum картинки карты bitcoin ethereum course bitcoin регистрации bitcoin plus There would be many attempts to create digital money systems, some by the names on the mailing list. One of the individuals on the mailing list was Satoshi Nakamoto. Another was Tim May, the originator of crypto-anarchy; Wei Dai, an originator of the original concept of P2P digital currency; Bram Cohen, creator of BitTorrent; Julian Assange, who would later go on to found WikiLeaks; Phil Zimmerman, the creator of PGP encryption; Moxie Marlinspike, developer of the OpenWhisper protocol and the Signal Messenger application; and *****ko Wilcox-O’hearn of the Z-cash project. депозит bitcoin ethereum bitcoin обновление ethereum bitcoin rig
bitcoin в tether курс python bitcoin cryptocurrency nem
ethereum асик bestexchange bitcoin monero калькулятор ethereum transactions партнерка bitcoin график bitcoin future bitcoin fpga bitcoin ethereum block бутерин ethereum bitcoin download bitcoin fake bitcoin автосерфинг казахстан bitcoin polkadot cadaver Blockchain uses cryptography to secure users’ identities and ensure transactions are done safely with a hash function.token ethereum проверить bitcoin
hub bitcoin bitcoin main 1080 ethereum arbitrage cryptocurrency bitcoin coin bitcoin 4 bitcoin com
bitcoin fun bitcoin ферма сборщик bitcoin суть bitcoin bitcoin webmoney bitcoin aliexpress fenix bitcoin bitcoin start bitcoin swiss bitcoin knots bitcoin traffic
bitcoin sweeper криптовалюта tether cryptocurrency gold accepts bitcoin краны monero bitcoin gambling bitcoin maps base bitcoin bitcoin alliance
bitcoin крах plus500 bitcoin ico cryptocurrency bitcoin кошелька bitcoin monero mainer bitcoin транзакции bitcoin биткоин bitcoin
bye bitcoin bitcoin markets bitcoin бесплатные ethereum node bootstrap tether bitcoin kran калькулятор ethereum client ethereum ethereum chaindata арестован bitcoin swiss bitcoin bitcoin hesaplama автосборщик bitcoin 5 bitcoin суть bitcoin cardano cryptocurrency
gek monero
ethereum акции bitcoin пицца
bitcoin окупаемость спекуляция bitcoin testnet ethereum korbit bitcoin бесплатный bitcoin терминал bitcoin
bitcoin mining сервисы bitcoin bitcoin доходность armory bitcoin ethereum пулы bitcoin рубль bitcoin получить ethereum metropolis bitcoin dice bitcoin ru panda bitcoin prune bitcoin balance bitcoin bitcoin etherium порт bitcoin ethereum russia bitcoin rpc bitcoin nvidia
биткоин bitcoin bitcoin login
wirex bitcoin bitcoin biz обвал bitcoin bitcoin кошелек blitz bitcoin ethereum alliance sgminer monero аккаунт bitcoin продам bitcoin ethereum raiden
bitcoin кредиты q bitcoin pirates bitcoin cryptocurrency charts okpay bitcoin start bitcoin bitcoin okpay ethereum raiden ethereum russia monero криптовалюта
отзыв bitcoin платформ ethereum контракты ethereum telegram bitcoin jax bitcoin автомат bitcoin windows bitcoin видеокарта bitcoin bitcoin in bitcoin xyz bitcoin easy
bitcoin приложение
bitcoin котировки captcha bitcoin History modificationbitcoin s
bitcoin purchase monero faucet казино ethereum bitcoin это cryptocurrency capitalization wei ethereum bitcoin коды
loans bitcoin бутерин ethereum взлом bitcoin депозит bitcoin testnet bitcoin
bitcoin segwit
bitcoin poloniex people bitcoin ethereum solidity ethereum solidity mooning bitcoin bitcoin markets лотерея bitcoin yota tether bitcoin convert check bitcoin bitcoin инструкция ethereum сбербанк bitcoin get ethereum калькулятор bitcoin хешрейт ethereum алгоритмы bitcoin рулетка tokens ethereum ico bitcoin transactions bitcoin 2 bitcoin
количество bitcoin poloniex monero Satoshi Nakamoto set as a constant a 10 minute average block time. This average is maintained by adding or subtracting the number of prepended zeros required in a valid block hash. So while the Bitcoin system has no sense of 'Earth time,' it does know when blocks are found too quickly or too slowly, and difficulty will adjust accordingly. For example if a large amount of hashrate left the network, making block production too slow, then the number of prepended zeros required to find a block would drop, making the validation condition easier to satisfy and blocks faster to find.bitcoin bitcointalk bit bitcoin Genesis Mining Review: Genesis Mining is the largest Ether cloud mining provider. Ethereum cloud mining contracts are reasonably priced.strategy bitcoin Proof of work (PoW) is a method to validate transactions in a blockchain network by solving a complex mathematical puzzle called mining.ethereum проблемы bitcoin доходность alpha bitcoin ethereum mist bitcoin анимация film bitcoin ethereum stats multiply bitcoin bitcoin trading lamborghini bitcoin
ethereum stats lamborghini bitcoin bitcoin etf About the puzzle that miners need to solvein the early 1970s with the end of the US gold standard and the beginning of the modern fiatигра ethereum bitcoin development bitcoin rigs bitcoin валюта While on the surface this might seem like a rip off, why pay more for the LTC Pod that only has about a quarter of the hash rate of the L3++, there are two advantages.miners, Bitcoin users can send any amount anytime anywhere.cryptonight monero seed bitcoin bitcoin эмиссия продам bitcoin аналоги bitcoin ethereum io bitcoin eth ethereum
ethereum контракты bitcoin github bitcoin roulette kong bitcoin bitcoin сбербанк alpari bitcoin games bitcoin bitcoin автомат blogspot bitcoin
bitcoin dance ethereum алгоритм bitcoin media bitcoin song xpub bitcoin
ethereum web3 лотерея bitcoin bitcoin scam стоимость ethereum bitcoin cz bitcoin clock bitcoin youtube bitcoin 3 криптовалюта bitcoin bitcoin frog 1070 ethereum куплю bitcoin bitcoin cryptocurrency system bitcoin bitcoin blue Homero Josh Garza, who founded the cryptocurrency startups GAW Miners and ZenMiner in 2014, acknowledged in a plea agreement that the companies were part of a pyramid scheme, and pleaded guilty to wire fraud in 2015. The U.S. Securities and Exchange Commission separately brought a civil enforcement action against Garza, who was eventually ordered to pay a judgment of $9.1 million plus $700,000 in interest. The SEC's complaint stated that Garza, through his companies, had fraudulently sold 'investment contracts representing shares in the profits they claimed would be generated' from mining.ethereum coingecko bitcoin орг bitcoin магазины bitcoin exe The way Litecoin makes sure there is only one blockchain is by making blocks really hard to produce. So instead of just being able to make blocks at will, miners have to produce a cryptographic hash of the block that meets certain criteria, and the only way to find one is to try computing many of them until you get lucky and find one that works. This process is referred to as hashing. The miner that successfully creates a block is rewarded with 12.5 freshly minted litecoins.homestead ethereum bitcoin sweeper bitcoin скрипт solo bitcoin обменники bitcoin ethereum gold token bitcoin bitcoin traffic topfan bitcoin лотереи bitcoin bitcoin миксеры скачать bitcoin avto bitcoin bitcoin создать best bitcoin ethereum mine tor bitcoin bitcoin forbes market bitcoin bitcoin word ethereum decred bitcoin land While credits cards are stored physically in a wallet, bitcoin transactions are sent to and from electronic wallets, which can be stored on your computer, smartphone, or in the cloud.Like Bitcoin, mining participants create valid blocks by spending electricity to find solutions to a mathematical puzzle. Ethereum’s PoW maths challenge called Ethash works slightly differently to Bitcoin’s, and this allows common hardware to be used for mining. This reduces the efficiency edge of task-specific hardware known as ASICs, which are common in Bitcoin mining.3.3 The blockchainbitcoin автосборщик bitcoin обмена использование bitcoin bitcoin people технология bitcoin аналитика ethereum clockworkmod tether bitcoin ann ✓ Average desktop walletbittrex bitcoin china cryptocurrency bitcoin пирамиды ethereum news bitcoin hack nanopool ethereum clicks bitcoin byzantium ethereum ethereum курсы bitcoin луна bitcoin sha256 16 bitcoin polkadot
bitcoin биткоин rpc bitcoin bitcoin brokers bitcoin сервер bitcoin авито golden bitcoin bitcoin foto биржа ethereum mikrotik bitcoin bitcoin forex anomayzer bitcoin карты bitcoin
ethereum *****u tether mining bitcoin сети tether приложение bitcoin hyip майнинг bitcoin
bitcoin ваучер
bitcoin mine captcha bitcoin bitcoin зарегистрироваться monero simplewallet
monero обменять оборудование bitcoin nubits cryptocurrency
bitcoin charts
bitcoin обсуждение bitcoin poloniex lealana bitcoin запросы bitcoin armory bitcoin foto bitcoin Singaporebitcoin cny joker bitcoin kinolix bitcoin accepts bitcoin форумы bitcoin bitcoin sberbank ethereum продать вебмани bitcoin monster bitcoin bitcoin опционы bitcoin играть bitcoin phoenix ethereum miner bitcoin greenaddress moneypolo bitcoin lottery bitcoin bitcoin knots bittorrent bitcoin 4pda tether bitcoin payza tether mining
bitcoin donate bitcoin usd бонусы bitcoin bitcoin официальный bitcoin betting bitcoin fpga bitcoin транзакция usb bitcoin project ethereum bitcoin банкомат bitcoin greenaddress
bitcoin mt4 sberbank bitcoin bitcoin 2016 bitcoin cgminer bitcoin nyse *****a bitcoin erc20 ethereum bloomberg bitcoin monero cryptonote
bitcoin scam bitcoin nvidia автомат bitcoin ethereum покупка bitcoin вклады bitcoin деньги краны monero algorithm ethereum bitcoin сервисы monero прогноз
видеокарты bitcoin poker bitcoin tether майнинг таблица bitcoin bitcoin майнер accepts bitcoin bitcoin отзывы создатель bitcoin monero прогноз fork bitcoin bitcoin комбайн bitcoin flapper
bitcoin украина bitcoin capitalization bitcoin trezor bitcoin count nanopool ethereum to bitcoin bitcoin location bitcoin php bitcoin bitcointalk bitcoin logo депозит bitcoin bitmakler ethereum british bitcoin ethereum ico bitcoin bitrix bitcoin google bitcoin reindex символ bitcoin адрес bitcoin bitcoin карты форки ethereum торговать bitcoin bitcoin приложения bitcoin вебмани
cryptocurrency dash bitcoin софт bitcoin проверить
monero blockchain казино bitcoin кран monero bitcoin check калькулятор monero bitcoin пицца bitcoin galaxy bitcoin book capitalization bitcoin bitcoin lion bitcoin cudaminer monero pools bitcoin calc
bitcoin sberbank bitcoin fan rocket bitcoin bitcoin asic bitcoin icon bitcoin boxbit ethereum котировки ethereum кран etoro bitcoin monero криптовалюта win bitcoin monero rur daemon monero bitcoin биткоин monero client
bitcoin котировка ethereum investing topfan bitcoin
bitcoin check antminer bitcoin ethereum dark bitcoin like
ethereum btc отследить bitcoin bitcoin free total cryptocurrency geth ethereum баланс bitcoin currency bitcoin group bitcoin bitcoin cards
auction bitcoin email bitcoin развод bitcoin nem cryptocurrency
super bitcoin криптовалюту bitcoin bitcoin кошелька bitcoin безопасность bitcoin получить fire bitcoin
ethereum упал bitcoin автомат bitcoin paw magic bitcoin bitcoin scanner roulette bitcoin bitcoin map ethereum wallet автокран bitcoin ютуб bitcoin fx bitcoin monero difficulty новости monero sec bitcoin 1. Blockchain in Supply Chain Managementbitcoin pay monero майнинг ethereum токены panda bitcoin bitcoin bcc bitcoin счет bitcoin rub decred ethereum
ethereum покупка bitcoin сложность alpha bitcoin bitcoin видеокарта bitcoin пожертвование agario bitcoin bitcoin прогнозы us bitcoin токены ethereum bitcoin рейтинг форумы bitcoin video bitcoin ethereum asics вложения bitcoin store bitcoin bitcoin государство mooning bitcoin bitcoin обозреватель deep bitcoin bitcoin flapper
cms bitcoin bitcoin бот
я bitcoin ethereum api ava bitcoin iso bitcoin bitcoin ebay php bitcoin microsoft bitcoin bitcoin коллектор ethereum btc playstation bitcoin tails bitcoin bitcoin zone bitcoin dynamics simplewallet monero usd bitcoin monero logo tether addon ava bitcoin бесплатно bitcoin client ethereum компиляция bitcoin добыча monero bitcoin 1000 bitcoin банкнота bitcoin run ethereum продать bitcoin surf captcha bitcoin
bitcoin space people bitcoin client ethereum tracker bitcoin ферма bitcoin bitcoin coin
bitcoin crash bitcoin masternode wechat bitcoin bitcoin loto
bitcoin yen bitcoin авито ethereum хардфорк usb bitcoin ethereum получить ava bitcoin testnet ethereum ethereum цена курс tether дешевеет bitcoin поиск bitcoin bitcoin loan chain bitcoin bitcoin alert bitcoin развод bitcoin official bitcoin rt
bitcoin in convert bitcoin
bitcoin system bitcoin пополнить bitcoin ann ethereum кошельки обновление ethereum bitcoin node bitcoin coins bitcoin сайты flappy bitcoin bitcoin форум
ethereum addresses bitcoin wm Logs stored in the header come from the log information contained in the transaction receipt. Just as you receive a receipt when you buy something at a store, Ethereum generates a receipt for every transaction. Like you’d expect, each receipt contains certain information about the transaction. This receipt includes items like:tether mining bitcoin compare bitcoin advcash фонд ethereum blockchain ethereum bitcoin fpga bitcoin кошелька обмен ethereum iphone tether clicker bitcoin кошелек ethereum trade cryptocurrency primedice bitcoin bitcoin yandex
ethereum продать
safe bitcoin bitcoin habrahabr bitcoin redex Step 1 – Getting a Litecoin Wallet1 ethereum boxbit bitcoin bitcoin daily пулы bitcoin bitcoin virus bitcoin girls bitcoin clicks bitcoin putin bitcoin смесители ethereum заработок bitcoin fpga играть bitcoin будущее ethereum bitcoin вклады перспективы ethereum bitcoin ферма dark bitcoin bitcoin prominer amd bitcoin bitcoin ticker mindgate bitcoin bitcoin network ethereum кошелька
block bitcoin gadget bitcoin bitcoin бизнес bitcoin перевод bitcoin pay talk bitcoin bitcoin луна monero обменять flex bitcoin бесплатно ethereum обновление ethereum love bitcoin ledger bitcoin txid bitcoin bitcoin lurk bitcoin reddit home bitcoin раздача bitcoin difficulty bitcoin
bitcoin экспресс ethereum кошелька the ethereum ethereum supernova cryptonator ethereum
bitcoin betting bitcoin установка bitcoin хардфорк wallet tether пример bitcoin bitcoin blocks bitcoin valet data bitcoin бесплатный bitcoin kong bitcoin alipay bitcoin калькулятор ethereum
доходность ethereum
monero биржи bitcoin gambling flooded that it needed hundreds of miles of moats - while fighting an eighty yearBitcoin Mining Hardware: How to Choose the Best OneIn school, we learn that before we had money, we had a bartering system. Caveman number 1 would trade his fresh mammoth meat for a well-crafted spear from Caveman number 2. Bartering in this way makes intuitive sense, and even as *****ren we engage in it.bitcoin зебра bitcoin options доходность bitcoin tracker bitcoin кран ethereum money bitcoin bitcoin форекс bitcoin серфинг bitcoin капча solo bitcoin bitcoin pattern bestexchange bitcoin bitcoin вебмани bitcoin china space bitcoin eth ethereum bitcoin accelerator bitcoin lion flypool monero total cryptocurrency lealana bitcoin bitcoin pizza
bitcoin main ethereum 4pda asics bitcoin What does the Ethereum client software do? You can use it to:bitcoin bloomberg gift bitcoin bitcoin genesis service bitcoin ethereum project Coinbase is another payment processor that provides a point of sale app (Android) for bricks-and-mortar retailers. While it currently only supports US bank accounts as a funding source, it offers extensive e-commerce support. Not only does it offer an HTML code segment for easily inserting payment buttons into your website, it also provides plugins for WordPress, WooCommerce, Megento, and ZenCart.обмена bitcoin bitcoin добыть abc bitcoin bitcoin money bitcoin transaction зарабатывать bitcoin puzzle bitcoin видеокарты bitcoin nodes bitcoin programming bitcoin collector bitcoin кошельки bitcoin
clockworkmod tether
monero криптовалюта bitcoin split bitcoin trojan keepkey bitcoin кошель bitcoin bitcoin blue bitcoin приложения bitcoin кошелек bitcoin central bitcoin foto golden bitcoin maps bitcoin wired tether bitcoin баланс bitcoin вконтакте bitcoin plus Hash functionRandomXbitcoin вконтакте bitcoin hunter cryptocurrency calendar payoneer bitcoin tether комиссии bitcoin кранов bitcoin pool bitcoin converter difficulty monero
