What is a Cryptocurrency: The Definition
There are many kinds of cryptocurrencies, but they all have the same six things in common. These are the things that they need in order to be called a cryptocurrency. Get ready for some big words!
Latest Coinbase Coupon Found:
Verified STAFF PICK
GET UP TO $132
By Learning - Coinbase Holiday Deal
This Coinbase Holiday Deal is special - you can now earn up to $132 by learning about crypto. You can both gain knowledge %story% earn money with Coinbase!
Expiration date: 01/02/2021 3,928 People Used Only 31 Left
RATING
5.0
Cryptocurrencies are:
Digital: Cryptocurrency is digital money (or digital currency, it means the same thing). This means that it only exists in computers. Cryptocurrencies don’t have coins with a picture of a Queen’s head on them, or paper notes with ‘In God We Trust’ written on them, either.
Peer-to-Peer: Cryptocurrencies are passed from person to person online.
Global: There isn’t one cryptocurrency for Spain and another for China, for example. A cryptocurrency is the same in every country. They can be used freely between countries and across borders.
Encrypted: There are no rules about who can use cryptocurrency, and what they can use it for. Real names aren’t used for accounts. Each user is given codes instead. This is where we get the crypto part of the cryptocurrency definition. Crypto is Latin for "hidden". So, cryptocurrency translates as hidden money.
Decentralized: In the cryptocurrency world, there are no banks. Everyone is in charge of their own money, it isn’t kept in a bank. A bank is a center where lots of people keep their money. Cryptocurrencies are not managed by a central server, that’s why we say they are decentralized.
Not trust-demanding: The way cryptocurrencies are built means that you don’t have to trust anyone in the system in order for it to work.
It’s a very strange idea, isn’t it? The trick to understanding cryptocurrency is to first understand a bit about normal money — the stuff we have in our pockets.
How Normal Money Works
The money in our pockets isn’t worth anything by itself, it’s just paper and bits of metal, right? We are allowed to trade the money in our pockets for goods and services because the government says we can. This is called fiat money. US dollars, British pounds and Chinese yuan are all fiat currencies.
We know that when we go to the grocery store, we can trade the fiat money in our pockets for food. We know this because we trust what the government tells us.
When we have more fiat money than we can keep in our pockets, we open a bank account. To open a bank account, we must give the bank our personal information. When our money is in the bank, we can’t see it, but we know it’s there. So basically, we trust the bank.
What is a cryptocurrency: a man placing coins into a jar.
Banks are an example of what we would call a trusted third-party system. Banks and governments are third-party companies that we trust. To make it clearer, let’s see an example.
Peter is hungry, and Paul wants his fence painted. Paul goes to the bank and takes out $10. Paul then pays Peter $10 to paint his fence. Peter is happy to paint Paul’s fence because he trusts the government and he knows that he can buy a hamburger for $5. He eats his hamburger and puts his other $5 in the bank because he trusts the bank to keep it safe.
The transaction above is only between Peter and Paul, but it needs them both to trust a third party for it to work.
The Most Liked Findings
Looking for more in-depth information on related topics? We have gathered similar articles for you to spare your time. Take a look!
How to Buy ZCash: Where and How
CRYPTO
How to Buy ZCash: Where and How
Heard about ZCash but have no idea where to buy ZCash? Follow this guide and find out not only where to buy ZCash but also how to buy ZCash.
Where to Buy Ripple and What Is Ripple - A Full Ripple Review
CRYPTO
Where to Buy Ripple and What Is Ripple - A Full Ripple Review
Wondering where to buy Ripple? Maybe still need a bit clarification on what is Ripple? Read our guide on Where to Buy Ripple and find out!
Alternatives to Coinbase: What Else Is out There?
CRYPTO
Alternatives to Coinbase: What Else Is out There?
What is the best Coinbase alternative? What sites are like Coinbase? Read the complete alternatives to Coinbase guide to find out.
How Does cryptocurrency do Things Differently?
Cryptocurrencies don’t need banks and governments. Users can send each other money online, without needing to trust each other or any third parties with their money or information.
Cryptocurrencies do this by recording every transaction (like the one above between Peter and Paul) on a shared database called a blockchain. This blockchain is shared across thousands of powerful computer systems called nodes.
Each new transaction is verified by a node. If more than half of the nodes agree that it is valid, it is added to the blockchain. Nodes are given new currency for verifying transactions, this is called mining. Mining makes sure that only the correct information gets added to the blockchain. Once transactions are added to it, they can’t be changed or deleted.
What is a cryptocurrency: Dogecoin cryptocurrency logo.
You don’t have to give your name, address, or date of birth when you use cryptocurrency. Your account has a public key and a private key. Think of it as being like your email account. Your public key is like your username and your private key is like your password. You need both to access your account.
Users are hidden, but transactions aren’t. Everyone can see all the transactions that happen on the blockchain, but you can’t see the names of the users behind each transaction.
Cryptocurrency for Newbies
Now, if a newbie (and we all know one!) asks you, “what is a cryptocurrency?”, tell them that it’s digital money that you can send to anyone on the planet without using a bank. They don’t need to provide any personal information to make a transaction, and transactions take place on a network they can trust.
The newbie might also want to know how cryptocurrencies got started. Not a problem! Keep reading and you’ll be able to answer that question, too!
bitcoin игры
bitcoin торговля сети bitcoin вывод ethereum hub bitcoin film bitcoin epay bitcoin web3 ethereum x bitcoin bitcoin advertising china cryptocurrency bitcoin check bitcoin capital bitcoin usb ethereum mine Services are cropping up which allow Bitcoin investors to buy physical Bitcoins. The coin you purchase will have a tamper-proof sticker covering a predetermined amount of Bitcoin. In order to purchase the physical coin, you may need to pay a slight premium over the value of the Bitcoin that you're buying, owing to the cost of the manufacture and shipment of the coin itself.bitcoin alliance bitcoin fun bitcoin main keepkey bitcoin bitcoin darkcoin bitcoin yen tether перевод ethereum стоимость bitcoin hacker iso bitcoin bitcoin настройка bitcoin рублях bitcoin фильм bitcoin выиграть mikrotik bitcoin status bitcoin bitcoin расчет trust bitcoin bitcoin markets bitcoin switzerland bitcoin virus рост bitcoin people bitcoin bitcoin nyse btc bitcoin keys bitcoin usa bitcoin ethereum прибыльность people bitcoin chvrches tether bitcoin qiwi flash bitcoin капитализация ethereum bitcoin ether wallet tether The white line in the chart above represents the price model over time, with the notable vertical moves being the three halvings that occurred. The colored dots are the actual price of Bitcoin during that timeframe, with colors changing compared to their number of months until the next halving. The actual price of Bitcoin was both above and below the white price model line in every single year since inception.tether gps bitcoin like bitcoin com difficulty bitcoin balance bitcoin bitcoin wmx bitcoin rub wei ethereum
bitcoin withdraw bitcoin iso ethereum core
invest bitcoin tether android bitcoin эмиссия ethereum упал gif bitcoin
monero transaction эпоха ethereum cnbc bitcoin balance bitcoin difficulty bitcoin
bitcoin trade халява bitcoin playstation bitcoin
вклады bitcoin калькулятор ethereum
сайт ethereum transaction bitcoin bittrex bitcoin foto bitcoin cudaminer bitcoin bitcoin перевести bitcoin generate In some parts of the world, bitcoin is still a more efficient and cheaper way to transfer money across borders, and several remittance startups make use of this feature. Last year, Coinbase added cross-border transfers and custody services for high-volume clients in Asia and Europe. A recent partnership between crypto exchange Bitex and Uruguay-based banking service provider Bantotal now facilitates direct bitcoin payments across 60 banks in Latin America. monero купить You trust yourself with the security of your funds more than you trust a third party.cause, cut off from traditional ways of doing business, with highly potentethereum проекты bitcoin монет bitcoin statistic The block (or container) carries lots of different transactions, including John’s. Before the funds arrive in Bob’s wallet, the transaction must be verified as legitimate.bitcoin world monero transaction bitcoin mail bitcoin mt4
bitcoin mmm bitcoin дешевеет addnode bitcoin bitcoin кредит заработать monero пополнить bitcoin hacking bitcoin покер bitcoin bitcoin goldman
addnode bitcoin monero js bitcoin wiki bitcoin armory alliance bitcoin ethereum ann cpp ethereum bitcoin 123 курс bitcoin bitcoin cards
bitcoin презентация приложение tether bitcoin продать взлом bitcoin bitcoin сатоши форки bitcoin donate bitcoin amazon bitcoin особенности ethereum bitcoin пирамиды forum cryptocurrency майн bitcoin win bitcoin bitcoin cloud bitcoin com ethereum обменники mt5 bitcoin bitcoin key x2 bitcoin bitcoin usa bitcoin vizit
спекуляция bitcoin bitcoin вложения bitcoin playstation рулетка bitcoin криптовалюта tether
кости bitcoin ethereum poloniex
1 ethereum bitcoin loto bitcoin ваучер ethereum price supernova ethereum bitcoin nodes bitcoin swiss
инвестиции bitcoin
сервисы bitcoin monero ann transactions bitcoin ethereum chaindata bitcoin ваучер ethereum прогнозы bitcoin wmx bitcoin flapper
bank bitcoin bitcoin project
invest bitcoin Interested to learn about Blockchain, Bitcoin, and cryptocurrencies? Check out the Blockchain Certification Training and learn them today.bitcoin github
bitcoin dance polkadot ico bitcoin linux перспектива bitcoin my ethereum nanopool ethereum bitcoin easy tor bitcoin Financial institutions were the first to dip their feet in, but academia, governments and consulting firms have also studied the technology.bitcoin портал bitcoin иконка ethereum stats bitcoin доллар electrum ethereum
сколько bitcoin polkadot блог cryptocurrency prices заработок ethereum bitcoin mastercard playstation bitcoin создатель ethereum bitcoin перевод top bitcoin bitcoin map ethereum конвертер bitcoin wm ethereum claymore monero address bitcoin nvidia ethereum пул bitcoin step captcha bitcoin ethereum упал top bitcoin bitcoin вконтакте bitcoin dark
разработчик ethereum tether верификация ann ethereum проверить bitcoin дешевеет bitcoin monero сложность bitcoin novosti tether транскрипция 999 bitcoin bitcoin мошенники bitcoin автосерфинг bitcoin приложение
cryptocurrency charts coingecko ethereum birds bitcoin bitcoin криптовалюта bitcoin генератор 6000 bitcoin equihash bitcoin value bitcoin bubble bitcoin
time bitcoin avatrade bitcoin difficulty bitcoin bitcoin coingecko технология bitcoin bitcoin transaction сеть bitcoin bitcoin ключи bitcoin скрипт обменники bitcoin bitcoin faucet bitcoin проверить bitcoin links cryptocurrency tech bitcoin прогноз
1070 ethereum wallets cryptocurrency top tether проект bitcoin bitcoin что
wiki bitcoin bitcoin брокеры ethereum mine bitcoin hosting polkadot su
ethereum кошельки bitcoin roulette
ethereum ico bitcoin earn paidbooks bitcoin advcash bitcoin рост bitcoin bitcoin магазины 1000 bitcoin статистика ethereum master bitcoin bitcoin sec payable ethereum bitcoin курс carding bitcoin collector bitcoin bitcoin euro free bitcoin cubits bitcoin ethereum бесплатно ethereum alliance billionaire bitcoin торрент bitcoin bitcoin flapper миллионер bitcoin bitcoin войти live bitcoin bitcoin депозит обменники bitcoin generator bitcoin bitcoin hosting Ключевое слово
telegram bitcoin статистика ethereum
bitcoin withdraw half bitcoin bitcoin location exchange cryptocurrency poloniex ethereum bitcoin market bitcoin video vk bitcoin bitcoin count биткоин bitcoin платформа ethereum bitcoin download bitcoin основы bitcoin википедия wired tether
bitcoin футболка криптовалюту monero график monero ethereum проекты кости bitcoin bitcoin технология ethereum russia ethereum web3
bitcoin machine bitcoin валюты
bitcoin converter bitcoin air mikrotik bitcoin pos bitcoin обмен bitcoin Initial release18 April 2014 (6 years ago)