How "Crypt" Currencies Work – A Brief Overview of Bitcoin, Ethereum & Ripple

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

Blockchain and “cryptocurrencies” have become major elements of the global spirit of the times recently; usually as a result of the “price” of bitcoin rapid growth. This has forced millions of people to participate in the market, and many of the “bitcoin exchanges” are under severe infrastructure strain as demand grows.

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 benefit. In other words, his “intrinsic value” is steadily limited by his ability to do business with other people; NOT in preserving / disseminating value (which most people see in this).

The most important thing you need to realize is that Bitcoin and the like are similar payment networks – NOT “currency”. It will be covered deeper in a second; The most important thing to realize is that “getting rich” with BTC does not mean improving the economic situation of people – it’s just a process of being able to buy “coins” at a low price and sell them more expensive.

To this end, looking at the “crypt”, you must first understand how it actually works, and where its “value” really lies …

Decentralized payment networks …

As mentioned, the main thing to remember about “Crypto” is that it’s mostly a 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 from around the world as long as they have a Bitcoin wallet address.

The reason this attributes a “price” to various “coins” is the misconception that “Bitcoin” will somehow give you the opportunity to make money by being a “crypto” asset. This is not the case.

The ONLY The fact that people made money on bitcoins was due to the “increase” of its price – buying “coins” at a low price and selling at a MUCH more expensive. Although many people did well, it was actually based on the “big fool theory” – in essence, arguing that if you manage to “sell” the coin, it will be “bigger fool” than you.

This means that if you want to engage today in a “crypto” space, you are essentially looking to buy any of the “coins” (even “alternative” coins) that are cheap (or inexpensive) and enjoy their price rising while you will not sell them later. Since none of the “coins” are backed by real assets, it is not possible to estimate when / when / how it will work.

Future growth

For all intents and purposes, “Bitcoin” is a expended force.

The epic rally of December 2017 showed mass acceptance, and while its price is likely to continue to rise to the $ 20,000 + range, buying one of the coins today will be basically a huge game that will happen.

Smart money is already considering most “alternative” coins (Ethereum / Ripple, etc.) that have a relatively small price but are constantly rising in price and distribution. The main thing to look at in modern “crypto” space is how different “platform” systems are actually used.

Such is the rapid “technological” space; Ethereum and 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 the functionality working.

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.