How "Krypto" Currencies work – a brief overview of Bitcoin, Ethereum and Ripple

“Crypto” – or “encryption currencies” – are a type of software system that provides users with transactional functions over the Internet. The most important feature of the system is their decentralized nature – usually offers block chain database system.

The block chain and “cryptocurrencies” have recently become important elements in the global zeitgeist; typically as a result of the “price” of Bitcoin skyrocketing. This has led to millions of people entering the market, and many of the “Bitcoin exchanges” have experienced a massive infrastructure stress as demand rises.

The most important thing to understand about “encryption” is that while it really serves a purpose (cross-border transactions over the Internet), it does not offer any other economic benefits. In other words, its “intrinsic value” is firmly limited to its ability to trade with other people; NOT in storing / distributing the value (which most people see it).

The most important thing you need to understand is that “Bitcoin” and the like are payment networks – NO “currencies”. This is dealt with in more depth in a second; the most important thing to understand is that “getting rich” with BTC doesn’t mean giving people a better financial position – it’s simply a process where they can buy “coins” at a low price and sell them at a higher price.

To do this, when you look at “crypto”, you must first understand how it really works and where its “value” really lies …

Distributed payment networks …

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

This is important because it highlights the real reason why people have really begun to explore the “Bitcoin” proposal in more depth; it allows you to send / receive money from anyone around the world as long as they have your Bitcoin wallet address.

The reason this determines the “price” for different “coins” is due to the misunderstanding that “Bitcoin” somehow allows you to make money because it is a “crypto” asset. No.

The ONLY the way people have made money with Bitcoin has been due to the “rise” in its price – buying “coins” at a low price and selling them at a MUCH higher price. While it worked well for many people, it was actually based on the “greater stupidity theory” – basically claiming that if you manage to “sell” coins, it happens to a “bigger fool” than you.

This means that if you’re going to participate in “crypto” space today, you’re going to buy basically anything from “coins” (even “alt” coins) that are cheap (or inexpensive) and ride with them. prices go up until you sell them off later. Since none of the “coins” are behind the actual assets, it is not possible to estimate when / if / how this will work.

Future growth

For all purposes, “Bitcoin” is a force used.

The December 2017 epic rally showed mass payment, and while its price is likely to continue to rise to over $ 20,000, buying one coin today is basically a huge gamble that happens.

Smart money is already looking at most “alt” coins (Ethereum / Ripple, etc.), which are relatively low in price but are constantly rising in price and take-up. The most important thing in modern “crypto” mode is the way in which different “platforms” are actually used.

Such is the fast-paced “technology space”; Ethereum & Ripple look like the next “Bitcoin” – focusing on the way they are able to offer users the ability to truly leverage “distributed applications” (DApps) over their backbone networks to get functionality to 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.