how "Crypto" Currencies Work – A Brief Overview of Bitcoin, Ethereum and Ripple

“Crypto” – or “cryptocurrencies” – is a type of software system that provides transaction functionality to users over the Internet. The most important feature of the system is their decentralized nature – as a rule, is provided by art blockchain database system.

Blockchain and “cryptocurrencies” have recently become staples of the global zeitgeist; usually as a result of a sharp increase in the “price” of bitcoins. This has led to millions of people participating in the market, and many of the “bitcoin exchanges” are experiencing huge infrastructure strains as demand has skyrocketed.

The most important thing to know about “cryptography” is that while it serves a purpose (cross-border transactions over the Internet), it does not provide any other financial benefit. In other words, his “intrinsic value” is strictly limited to his ability to communicate with other people; NOT in the storage/distribution of value (which is what most people see).

The most important thing you need to realize is that “Bitcoin” and its like are there payment networks – NOT “currency”. This will be covered in more detail in a second; the most important thing to realize is that getting “rich” with BTC is not a case of making people economically better off – it’s simply a process of being able to buy “coins” at a low price and sell them at a higher price.

To that end, when looking at “crypto” you need to first understand how it actually works and what its “value” is…

Decentralized payment networks…

As mentioned, the main thing to remember about “Crypto” is that it is predominantly a decentralized payment network. Think Visa/Mastercard without a central processing system.

This is important because it highlights the real reason people have really started to look deeper into the Bitcoin proposition; it gives you the ability to send/receive money from anyone around the world as long as they have your Bitcoin wallet address.

The reason it assigns a “price” to different “coins” is because of the misconception that “Bitcoin” will somehow allow you to make money by being a “crypto” asset. It is not so.

The ONLY The way people made money from Bitcoin was to “grow” its value – by buying “coins” at a low price and selling them at a MUCH higher price. ​​​​​​While this worked well for a lot of people, it was actually based on the “bigger fool theory” – essentially stating that if you managed to “sell” the coins, it was to a “bigger fool” than you .

This means that if you want to get involved in the “crypto space” today, you are basically going to buy any “coins” (even “alternative” coins) that are cheap (or inexpensive) and use them to increase in price until you sell them later. Since none of the “coins” are backed by real assets, there is no way to estimate when/if/how it will work.

Future growth

For all intents and purposes, “Bitcoin” is spent power.

The epic rally in December 2017 shows the mass adoption of the coin, and while its price will likely continue to rise to the $20,000 range, buying one of the coins today will mostly be a big risk.

The smart money is already looking at most of the “alt” coins (Ethereum/Ripple, etc.) that have a relatively small price tag, but are constantly growing in price and distribution. The main thing to pay attention to in today’s “cryptospace” is how the various “platform” systems are actually used.

Such a fast-paced “technological” space; Ethereum and Ripple look like the next “Bitcoin” – with a focus on how they can enable users to actually use “decentralized applications” (DApps) on top of their main networks to get functionality to work.

This means that if you’re looking at the next level of “crypto” growth, it will almost certainly come from a variety of platforms that you can identify.