How "Crypto" Currencies Work – A Brief Overview Of Bitcoin, Ethereum & Ripple

“Crypto” – or “cryptocurrency” – is a type of software system that provides users with the functionality of transactions over the Internet. The most important feature of the system is them decentralized nature – usually provided blockchain database system.

Recently, blockchain and “cryptocurrencies” have become major elements of the global Zeitgeist; as a result, the “price” of bitcoin increases rapidly. This has forced millions of people to participate in the market, and many of the “bitcoin exchanges” have been under great stress in infrastructure as demand has increased.

The most important point to be aware of about “crypto” is that, although it actually serves a purpose (cross-border online transactions), it does not provide any other financial benefits. In other words, his “intrinsic value” is severely limited by the ability to do business with other people; NOT in the storage / dissemination of values ​​(this is what most people see).

The most important thing you need to understand is what “bitcoin” and the like are payment networks – NOT “currency”. This will be considered more deeply in a second; the most important thing to realize is that “getting rich” with BTC is not a case for improving people’s economic situation – it’s just a process of being able to buy “coins” for a low price and sell them higher.

To this end, when considering a “crypt,” one must first understand how it actually works and where its “value” actually lies …

Decentralized payment networks …

As already mentioned, the main thing to remember about “Crypto” – it’s preferable decentralized payment network. Think Visa / Mastercard without a central processing system.

This is important because it highlights the real reason why people have really started to look more deeply at the “Bitcoin” offer; it gives you the ability to send / receive money from anyone around the world as long as they have your wallet address in Bitcoin.

The reason this attributes the “price” to various “coins” is due to the misconception that “bitcoin” will somehow give you the opportunity to make money through the “crypto” asset. This is not the case.

ONLY The way people made money with bitcoin was due to the “growth” of its value – buying “coins” at a low price and selling them MUCH higher. While this has worked for many people, it was actually based on a “bigger fool theory” – essentially arguing that if you manage to “sell” coins, it’s a “bigger fool” than you.

This means that if you want to get involved in “crypto” today, you’re basically buying any of the “coins” (even “alternatives”) that are cheap (or inexpensive), and driving on them the price goes up until you sell them out later . Since none of the “coins” rely on real assets, there is no way to estimate when / when / how it will work.

Future growth

For any purpose, “bitcoin” is a expended force.

The epic rally in December 2017 witnessed mass acceptance, and while its value is likely to continue to rise to the $ 20,000 + range, buying one of the coins today will essentially be a huge gamble.

Smart money is already considering most “alternative” coins (Ethereum / Ripple, etc.) that have a relatively small price but are constantly rising in price and acceptance. The main thing to pay attention to in today’s “crypto” space is how the various “platform” systems are actually used.

Such a rapid “technological” space; Ethereum & 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 core networks to get functionality to work with.

This means that if you are looking for the next level of “crypto” growth, it will almost certainly come from different platforms that you will be able to identify there.