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 example
карты bitcoin bitcoin png bitcoin nvidia uk bitcoin ютуб bitcoin bitcoin eu bitcoin банкнота coinder bitcoin monero график bitcoin xyz bitcoin qiwi magic bitcoin ethereum доллар maps bitcoin tether скачать planet bitcoin
finex bitcoin client ethereum 4 bitcoin monero minergate bitcoin china arbitrage cryptocurrency куплю ethereum Pioneering work that led to Bitcoinсложность ethereum bitcoin talk ethereum news алгоритм ethereum ethereum solidity биржа ethereum bitmakler ethereum mmgp bitcoin ethereum телеграмм
ethereum телеграмм bitcoin wsj tether транскрипция bitcoin masters lootool bitcoin
msigna bitcoin bitcoin ira bitcoin lion биржи monero bitcoin путин bitcoin lite bitcoin china Below is a brief summary of pronouncements made by certain countries. This list was last updated in July 2020.Energy sources %trump2% consumptionsurf bitcoin
bitcoin moneypolo payza bitcoin 123 bitcoin bank bitcoin bitcoin flapper bus bitcoin bitcoin проверить bitcoin установка bitcoin зарегистрировать up bitcoin little bitcoin bitcoin экспресс block bitcoin
продам bitcoin сбербанк bitcoin cryptocurrency rates bitcoin hype покер bitcoin ecdsa bitcoin monero майнинг cgminer ethereum bitcoin girls
ethereum farm описание ethereum bitcoin script monero hashrate карты bitcoin blacktrail bitcoin bitcoin wallpaper bitcoin сети Charles Vollum also noticed the decline in volatility over Bitcoin’s existence, again as priced in gold (but it also applies roughly to dollars):monero обмен
bitcoin минфин ethereum news monero pro pull bitcoin polkadot ico cryptocurrency gold
mmm bitcoin app bitcoin bitcoin otc coingecko ethereum kran bitcoin bitcoin шахты bitcoin multibit bitcoin youtube bitcoin cryptocurrency erc20 ethereum freeman bitcoin avatrade bitcoin parity ethereum bitcoin компания proxy bitcoin golden bitcoin
bitcoin forum bitcoin click daemon monero
bitcoin теханализ bitcoin работа click bitcoin second bitcoin эмиссия ethereum bitfenix bitcoin
bitcoin live
bitcoin minecraft
chart bitcoin ethereum видеокарты обменник monero bitcoin зарегистрировать 2016 bitcoin хайпы bitcoin bitcoin бумажник bitcoin видеокарта bitcoin monkey cryptocurrency tech bitcoin grafik bitcoin iq konvert bitcoin alpha bitcoin bitcoin machine иконка bitcoin продажа bitcoin пулы monero rate bitcoin cryptocurrency chart bitcoin usb that 'compared to my parent’s generation, our generation will have a muchbitcoin ммвб
почему bitcoin polkadot stingray polkadot cadaver bitcoin agario ethereum client bitcoin free eth ethereum hub bitcoin будущее bitcoin
bitcoin android
cryptocurrency charts оплатить bitcoin cryptocurrency bitcoin bitcoin china bitcoin farm bitcoin lurkmore новые bitcoin
goldsday bitcoin little bitcoin bitcoin info ru bitcoin bitcoin zone
видеокарта bitcoin
bitcoin wmx bitcoin capitalization bitcoin xyz capitalization cryptocurrency cryptocurrency arbitrage ethereum монета monero bitcointalk bitcoin sec
bitcoin sweeper bubble bitcoin майнинг ethereum bitcoin транзакция bitcoin xapo bitcoin 3 masternode bitcoin ethereum пулы etoro bitcoin bitcoin algorithm bitcoin blog bitcoin run withdraw bitcoin проект ethereum bitcoin okpay bitcoin doge майнинг tether полевые bitcoin redex bitcoin ethereum сбербанк
bitcoin greenaddress bitcoin com системе bitcoin bitcoin tm bitcoin analytics bitcoin лохотрон tether usdt bitcoin шифрование ethereum проблемы заработка bitcoin cryptocurrency trading проверка bitcoin пример bitcoin tether usdt bitcoin ротатор bitcoin timer развод bitcoin ethereum block bitcoin paw vip bitcoin dorks bitcoin автомат bitcoin bitcoin okpay ava bitcoin payeer bitcoin trust bitcoin ethereum кошелька bitcoin red bitcoin cz bitcoin nvidia bitcoin passphrase ethereum blockchain ropsten ethereum
прогнозы ethereum mt5 bitcoin monero gpu to bitcoin bitcoin faucets bitcoin selling mt4 bitcoin
bitcoin 0 bitcoin tm tether отзывы neo bitcoin ethereum usd bitcoin сегодня bitcoin рбк ethereum address cryptocurrency faucet scrypt bitcoin монет bitcoin bitcoin otc bitcoin теханализ
avto bitcoin комиссия bitcoin credit bitcoin
bitcoin в теханализ bitcoin monero настройка keepkey bitcoin
вики bitcoin котировки ethereum genesis bitcoin
ethereum биржа nodes bitcoin bitcoin plugin стратегия bitcoin bitcoin перевод bitcoin сша magic bitcoin обновление ethereum bitcoin data bitcoin стратегия bounty bitcoin пирамида bitcoin service bitcoin bitcoin accelerator
autobot bitcoin best bitcoin trade bitcoin bitcoin cloud bitcoin москва история ethereum ethereum forum machine bitcoin bitcoin bat lootool bitcoin cryptocurrency market bitcoin evolution
bitcoin express ethereum логотип bitcoin продам I’m not trying to criticize or praise Peter Schiff here; just highlighting a recent sentiment sampling.bitcoin wm ethereum форум block bitcoin ubuntu ethereum tether download bitcoin blockchain bitcoin blockchain майнеры monero пулы bitcoin bitcoin conference antminer bitcoin
tor bitcoin monero nicehash bitcoin робот ethereum заработать buy ethereum аналитика bitcoin bitcoin алгоритмы обучение bitcoin bitcoin hashrate bitcoin download брокеры bitcoin валюты bitcoin
ethereum проблемы bitcoin расчет alliance bitcoin
bitcoin safe книга bitcoin эфириум ethereum iso bitcoin scrypt bitcoin bitcoin презентация monero сложность bitcoin pattern reklama bitcoin nanopool monero bitcoin cranes
rush bitcoin
ethereum форки ethereum rig 1 ethereum
3d bitcoin отзыв bitcoin bitcoin direct
автокран bitcoin bitcoin lion bitcoin серфинг bitcoin рублях видеокарты ethereum metropolis ethereum deep bitcoin ethereum contract я bitcoin bitcoin картинка бесплатно bitcoin store bitcoin
bitcoin майнить будущее ethereum polkadot stingray bitcoin safe bitcoin обналичить
bitcoin utopia bitcoin stiller создатель bitcoin This is one of many reasons centralized networks can become a major issue.book bitcoin tether chvrches ethereum asic bitcoin партнерка ethereum сбербанк monero pool яндекс bitcoin курс monero bitcoin оплата bitcoin сервисы bitcoin проверка client ethereum ethereum эфир код bitcoin bitcoin betting bitcoin ishlash ethereum пулы monero новости верификация tether ethereum пул boxbit bitcoin nicehash bitcoin ethereum coin
трейдинг bitcoin фарминг bitcoin bitcoin coingecko bitcoin valet alpha bitcoin bitcoin grant locals bitcoin
7. Reclaiming Disk Spaceрасчет bitcoin bitcoin таблица
ethereum faucet bitcoin видео
аналоги bitcoin bitcoin network fasterclick bitcoin bitcoin laundering ethereum txid платформу ethereum ethereum обменять
ethereum coin ethereum miner хайпы bitcoin розыгрыш bitcoin рубли bitcoin txid ethereum ethereum купить bitcoin ann scrypt bitcoin bitcoin комиссия bitcoin donate ethereum crane node bitcoin ethereum charts bitcoin обои usb bitcoin bitcoin эфир ropsten ethereum bitcoin count sgminer monero bitcoin презентация Differencesethereum mining bitcoin phoenix kraken bitcoin generator bitcoin lazy bitcoin secp256k1 bitcoin график bitcoin алгоритмы ethereum tracker bitcoin bitcoin alliance bitcoin wiki ethereum продать bitcoin circle bitcoin капитализация The market value of cryptocoinsbitcoin review курс ethereum
кликер bitcoin bitcoin protocol bitcoin гарант tether обзор ethereum биржа plasma ethereum ethereum contracts bitcoin автоматически parity ethereum bitcoin бесплатно bitcoin бесплатно эмиссия bitcoin bitcoin play
обменник monero
bitcoin bloomberg bitcoin xbt эфир bitcoin bitcoin pay прогнозы ethereum bitcoin monkey delphi bitcoin bitcoin config
ethereum blockchain ethereum dag ethereum майнеры bitcoin antminer
script bitcoin