How "Crypto" Coins work: a brief overview of Bitcoin, Ethereum and Ripple

“Crypto” or “crypto currencies” – are a type of software system that provides transactional functionality to users over the Internet. The most important feature of the system is yours decentralized nature – usually provided by the blockchain database system.

Blockchain and “cryptocurrencies” have recently become the main elements of the global zeitgeist; usually as a result of the “price” of Bitcoin soars. This has led millions of people to participate in the market, and many of the “Bitcoin exchanges” have come under great pressure on infrastructure as demand increased.

The most important point to keep in mind about “cryptography” is that while it really has a purpose (cross-border transactions over the Internet), it does not provide any other financial benefit. In other words, its “intrinsic value” is firmly limited to the ability to transact with other people; NOT in value storage / dissemination (which is how most people see it).

The most important thing to keep in mind is that “Bitcoin” and the like are payment networks – NO “coins”. This will be discussed in more depth in a second; the most important thing to realize is that “getting rich” with BTC is not about giving people a better economic situation: it is simply the process of being able to buy “coins” at a low price and sell them more highly.

To that end, when you look at “cryptography”, you must first understand how it really works and where its “value” really lies …

Decentralized payment networks …

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

This is important because it highlights the real reason why people have really started to delve deeper into the “Bitcoin” proposal; gives you the ability to send / receive money from anywhere in the world, as long as they have your Bitcoin wallet address.

The reason this attributes a “price” to the various “currencies” is due to the misconception that “Bitcoin” will somehow give you the chance to make money by virtue of being a “cryptocurrency” asset. It doesn’t.

He NOT MORE the way people have made money with Bitcoin is due to the “rise” in its price: buying the “coins” at a low price and selling them for a MUCH higher one. While it worked well for many people, it was actually based on the “theory of the biggest fools,” essentially stating that if you manage to “sell” the coins, it’s for a “bigger fool” than you.

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

Future growth

To all intents and purposes, “Bitcoin” is a spent force.

The December 2017 epic rally indicated mass adoption, and while its price is likely to continue to rise to $ 20,000 more, buying one of the coins today will basically be a huge bet for this to happen. .

Smart money is already contemplating most “high” currencies (Ethereum / Ripple, etc.) that are relatively small in price, but that are constantly growing and adopting. The key aspect to consider in modern “cryptographic” space is the way in which the various “platform” systems are actually used.

Such is the rhythm of the space of “technology”; Ethereum and Ripple resemble the following “Bitcoin,” with a focus on how they can provide users with the ability to actually use “decentralized applications” (DApps) at the top of their underlying networks for functionality in to work.

This means that if you’re seeing the next level of “cryptographic” growth, it’s almost certain to come from the various platforms you can identify.