How “crypto” currencies work – a brief overview of Bitcoin, Ethereum & Ripple

“Crypto” – or “cryptocurrencies” – are a type of software system that provides users with transactional functionality over the Internet. The most important feature of the system is theirs decentralized nature – usually provides blockchain database system.

Blockchain and “cryptocurrencies” have recently become major elements of the global zeitgeist; typically as a result of the “price” of bitcoin to the skies. This has led to millions of people participating in the market, with many “Bitcoin exchanges” being subjected to enormous infrastructural stresses as demand increases.

The most important thing to understand about “crypto” is that although it actually serves a purpose (cross-border transactions via the Internet), it does not provide any other financial benefit. In other words, his “intrinsic value” is firmly limited to the ability to transaction with other people; NOT in preserving / disseminating value (which most people see).

The most important thing to understand is that “Bitcoin” and the like are payment networks – NO “currency”. This will be covered deeper in a second; The most important thing to understand is that “getting rich” with BTC is not the case for giving people a better economic position – it is simply a process of being able to buy “coins” at a low price and sell them at a higher price.

For this purpose, when you look at “crypto”, you must first understand how it actually works and where its “value” actually lies …

Decentralized payment networks …

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

This is important because it emphasizes the real reason why people have really started to think more deeply about the “Bitcoin” proposal; gives you the ability to send / receive money from anyone around the world, as long as it has your Bitcoin wallet address.

The reason why this is attributed to the price of “various” coins “is the misconception that” Bitcoin “will in some way give you the opportunity to make money based on the fact that” crypto “is an asset. It’s not.

The ONLY The way people make money with bitcoin is the result of “increasing the price” of its price – buying “coins” at a low price and selling at a MUCH higher price. Although it worked well for many, it is actually based on the “bigger fool’s theory” – in essence, which says that if you manage to “sell” coins, it is a “bigger fool” than you.

This means that if you want to get involved in the “crypto” space today, you are essentially looking to buy any of the “coins” (even “alt” coins) that are cheap (or cheap) and use them the price goes up until later sold out. Since none of the “coins” are supported by real-world funds, there is no way to assess when / if / how this will work.

Future growth

For all intents and purposes, “Bitcoin” is a wasted force.

The epic rally in December 2017 marked mass adoption, and while its price is likely to continue to rise in the $ 20,000 + range, buying one of the coins today will basically be a big gamble to make it happen.

Smart money is already looking at most “alt” coins (Ethereum / Ripple, etc.) that have a relatively low price but are steadily rising in price and adoption. The key thing to look at in a modern “crypto” space is the way different “platform” systems are actually used.

Such is the rapid “technological” space; Ethereum & Ripple look like the next “Bitcoin” – with a focus on how they are able to give users the ability to actually use “decentralized applications” (DApps) on top of their core networks to get functionality working.

This means that if you look at the next level of “crypto” growth, it will almost certainly come from various platforms that you can identify there.