How "Crypto" Currencies work – Bitcoin, Ethereum and Ripple Overview

“Crypto” – or “crypto-currencies” – is a type of software system that provides users with the function of the Internet. The most important feature of the system is theirs decentralized nature – usually provided by blockchain database system.

Blockchain and cryptocurrencies have recently become key elements of the global zeitgeist; usually as a result of a stormy rise in the “price” of Bitcoin. This has led to millions of people entering the market, and many “Bitcoin exchanges” have come under great infrastructural stress as demand has grown.

The most important thing to understand about crypto is that even though it actually serves one purpose (cross-border transactions over the Internet), it does not provide any other financial benefit. In other words, its “intrinsic value” is strictly limited by its ability to deal with other people; NOT in maintaining / spreading value (as many people see it).

The most important thing you need to understand is Bitcoin and things like that payment networks – NOT “currencies”. It will be covered more deeply in a second; The most important thing to understand is that “getting rich” with BTC does not give people a better economic position – it is simply a process of buying “coins” at a lower price and selling them at a higher price.

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

Decentralized Payment Networks …

As mentioned, the main thing to keep in mind about Crypto is that it is basically a decentralized payment network. Consider Visa / Mastercard without a central processing system.

This is important because it highlights the real reason why people are really starting to explore the Bitcoin offer more deeply; it allows you to send / receive money from anywhere in the world, as long as they have the address of your Bitcoin wallet.

The reason for attributing this to various “coins” is the misconception that Bitcoin will allow you to make money as a “crypto” asset. It won’t happen.

The ONLY The reason people make money with Bitcoin is because of the “rise” in its price – by buying “coins” at a lower price and selling them at a higher price. While it worked well for many people, it was actually based on a “bigger stupid theory” – essentially saying that if you could “sell” the coins, it would be “more stupid” than you.

This means that if you want to deal with the “crypto” space today, you can mostly buy cheap (or cheap) “coins” (even “bottom” coins) and the price goes up until you sell them later. None of the “coins” are backed by real-world assets, and there is no way to predict when / if / how it will work.

Future growth

Bitcoin is a force expended for all purposes and purposes.

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

Smart money already has a relatively low price, but looks at the majority of “bottom” coins (Ethereum / Ripple, etc.), which are constantly increasing in price and acceptance. The main thing to consider in the modern “crypto” space is the actual use of different “platform” systems.

This is a rapidly evolving “technology” space; Ethereum and Ripple look like the next Bitcoin – focusing on a way they can provide users with the ability to use “decentralized applications” (DApps) on their main networks to gain functionality. work.

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