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What are cryptocurrencies? (Part 1/5 tutorial for beginners) by arhitekt

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· @arhitekt ·
$268.17
What are cryptocurrencies? (Part 1/5 tutorial for beginners)
<html>
<h2>Bitcoin, Ethereum, Litecoin, Ripple, and other cryptocurrencies: you've heard of them, but what are they? How many are there and how it all works?</h2>
<blockquote>I'm sure you heard about Bitcoin, Ethereum or some other cryptocurrencies.. But what are cryptocurrencies? What is the difference between cryptocurrency and "normal" currency? This is a quick guide with purpose of referring readers to the world of cryptocurrencies without goind into too much details. We recommend that you read our whole 5 part tutorial in order and do not skip parts.</blockquote>
<p><img src="https://i.imgur.com/bS5awGE.jpg" width="1803" height="1020"/></p>
<blockquote>Image source: <a href="https://bitcointalk.org">Bitcointalk.org</a></blockquote>
<p>Cryptocurrencies are currencies based on<strong> cryptography</strong> (information encryption maths) that have started to emerge since 2009, shortly after a major financial crisis. The first cryptocurrency ever created was called <strong>Bitcoin </strong>(When some still claim that Ripple was first), and was made by an unknown developer under the pseudonym <strong>Satoshi Nakamoto</strong>.</p>
<h3>IS THAT MONEY THAT ONLY EXISTS ON THE INTERNET, AND IT IS NOT IN A PHYSICAL FORM?</h3>
<p>This is often an explanation, but it's quite wrong. Cryptocurrencies does not exist on the Internet, they are primarily software, that is, records within a program that is installed on multiple computers that are interconnected. This is not significantly different from standard money, eg the dollar or euro.</p>
<p>Let's explain this: most people and all companies have an open bank account. There is some amount in the account, let's say in dollars. Some also have the money in physical form, banknotes and coins. By summing up the sums on all bank accounts from all people and companies counting all the amount people have with them in the form of banknotes and coins, we would get how many dollars we have in circulation. This figure is about 5000 billion dollars (the amount is made up for the example). But how much money is in physical form? For example 250 billion or &nbsp;5%.</p>
<p>Thus, 95% of the dollar is virtual, this money exists solely as a record in databases and programs of computers of banks and other institutions that are interrelated. Thus, business without physical money is actually not a new change in the current system.</p>
<blockquote>Cryptocurrencies do not have their physical form, they are used the same as when you pay with a card or transfer money to another account. All this is just a change in records on the accounts, without the physical exchange of money.</blockquote>
<h3>WHAT IS DIFFERENCE BETWEEN CRYPTOCURRENCIES AND "COMMON" MONEY?</h3>
<p>In the comparisson itself - there is no significant difference. When you pay something in the store with a card, you do not see that money, you just see a change in your account balance. Similar is with cryptocurrencies - a change in the number in the program is made, that shows the balance of the account.</p>
<p>There is a big difference in (de)centralization. Your dollars are currently stored in the form of banknotes / coins at your own risk and in the form of a bank account number, that is to say, in the database in the bank telling you that as a client of that bank you have x amount of USD in your account. These bases are strictly protected, but if a security breach occurs? Does the change of base records means a loss of money? Actually, yes. Since all this information is stored in the central point of the bank, on one or more computers, this data is subject to loss. But this is a unlikely situation. Much bigger problem is the enforcement. The Bank is subject to the laws of the country in which it operates and has the right to freeze the funds in the client's account. That's why they say that the safest money is the one you have with you "in your pocket".</p>
<p>The cryptocurrencies in comparisson against this system do not have one center where data of the amounts in the account is stored. These data is distributed, meaning they are multiplied to a large number of copies, almost on every computer in the network of a specific cryptocurrency. Most computers on which cryptocurrency software have been installed have records of all transactions ever made. In order to change the value of another account, it is necessary to change the same data on most computers, ie 51% of computers. That is why we say that the cryptocurrencies system is decentralized. Thus, since there is no central party, the possibilities of seized money are blocked. No one can "freeze" your account and prevent you from using your money in the form of a cryptocurrency.</p>
<blockquote>Cryptocurrency is a software whose data is encrypted and copied to all computers in the network, and it functions as standard bank accounts - every transaction is just a change of amount between 2 accounts in the database.</blockquote>
<p><strong>I suggest that you check out the video below that explains the cryptocurrency on the Bitcoin example in 5 minutes!</strong></p>
<p>https://youtu.be/l9jOJk30eQs</p>
<p><img src="https://cdn.steemitimages.com/0x0/https://i.imgur.com/ttjvDJQ.gif" width="1277" height="240"/></p>
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vote details (166)
@alex0708 ·
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@arhitekt ·
@surpassinggoogle
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@bitcointravel ·
$0.36
good info thanks
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@boomerang ·
This post has received a 7.67 % upvote from @boomerang.
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@btcehelper ·
Hey! Buddies I wanna add something:
In this crypto world there are many a scams so be careful about them.
Moreover, many fake cryptocurrencies are being launched so be aware of them.
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@chamviet ·
https://sfomo.com/img/app2.png
Tool for crypto holder trader https://steemit.com/crypto/@chamviet/cryptocurrency-tool-sfomo
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vote details (1)
@coolguy123 ·
$0.06
> Thus, business without physical money is actually not a new change in the current system

Great explanation about the money circulation and example is awesome.

Your posts are so informative and I learnt a lot from yesterday's post on different types of mining and the advantages and disadvantages of each.

Thanks for your effort in sharing these articles. Have a wonderful Friday :)
👍  ,
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@arhitekt ·
$0.03
Thanks. I'm very happy if I know that my contributions are usefull. Tomorrow I will publish part 2.

You too, thanks ;)
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@coolguy123 ·
I will keep an eye on your posts. Yes, those are informative and helpful for me to understand the basics of blockchain and cryptocurrencies.

Thanks again :)
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@cryptojolt ·
Cryptocurrency is the hottest topic on Google for 2017 because of Bitcoin and I think maximum no of people have knowledge about it.
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@cyberblock ·
$0.50
I sold everything for BTCP Bitcoin Private because John Mcafee said it would take over Bitcoin :)
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@cyberblock ·
$0.61
I sold everything for BTCP Bitcoin Private because John Mcafee said it would take over Bitcoin :)
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@littleboy ·
$0.53
BTCP to 10000$ by December! To the Moon!! BTCP will overtake monero because monero dev goes are trolling people on twitter! BTCP will be worth 1 million in a few years!

.
.
.
.
.

Note: this comment is complete bullshit.
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@cyberblock ·
$0.48
Hi little boy. dadda's here to teach you about bitcoin private lol
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@yonny ·
$0.48
This comment is not bullshit, it’s a fact of the future. I am certain it is true :))
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@denisgo ·
Awesome post! Steem coin is missing but for all those crypto and tech enthusiast: I made this image with the 3D Steem logo so you can use it in your cryptocurrency posts! here's the [link to my post](https://steemit.com/art/@denisgo/3d-steem-quality-logo-for-your-cryptocurrency-post)  
images are clean and completely free! just make sure to upvote! have a nice one!

![STEEM SBD.jpg](https://cdn.steemitimages.com/DQmcYDW23P3DNsycL4EFiNztgUTDmKgiCdvMHczKHCqqz9d/STEEM%20SBD.jpg)
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@doktarufas ·
$0.06
Being a crypto enthusiast, I feel you have failed to stress importance of the role played by public ledgers 9blockchain), decentralization, and the democratic features of cryptocurrencies. However, the breakdown is simple and effective, Thanks
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@arhitekt ·
Hello, yes i agree. The whole point of the tutorial series is to show everything in a simple way, so that anyone can understand and get an idea of how everything works.
👍  
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@doktarufas ·
Some of these features such as decentralization, proof of work concept, democratic voting, among others are what distinguishes Bitcoin from fiat. In my opinion, they are crucial to the very definition of it. A balance has to be achieved somewhere...
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@faady92 ·
Thanks For Explaining such a Huge topic in such precise way!
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@frederichs ·
gran publicación,,,,
👍  
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@geovanny1000 ·
Muy buena publucacion.. Me sirve de mucho para conocer mas de los temas .
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@kaeley ·
So, obviously, the biggest advantage of cryptocurrencies to normal currencies is that cryptocurrencies are decentralized whilst normal currencies are centralized. This, therefore removes the bureaucracy of past. Most governments are trying very hard to suppress the emergence of cryptos because in their view they fund terrorism. But the advantages here seem to far outweigh their narrow-minded reasoning. Instead of focusing more on trying to fight cryptos, they are well advised to start finding means of incorporating them into their systems.
👍  , ,
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@cryptoinvesthub · (edited)
You are right, but there is another huge upside: Cryptocurrencies are deflationary while fiat currencies are inflationary.This means that crypto will rise in value while fiat will decrease in value over time.
👍  
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@leesujin ·
your information so great. thank so much.
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@arhitekt ·
Thanks very much @leesujin
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@magic-dust ·
This is a very good start-up explanation on what are cryptocurrencies which eventually (well, I hope so)open up the mind on most Filipinos. I am a Filipino and not part of the millennials anymore but I am very open for modernization and new changes. Most of my fellowmen are still skeptical about this and would even say these are just scams (but anyway, there are really scammers out there that exist in this field so let us just be careful). I am hesitant to open up this in my social media accounts for the fear of bashers. Hehehe... Anyway, I am hoping this will somehow be accepted the soonest...
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@majibullah ·
$0.05
thank you very much for your clarification on cryptocurrency.I hope cryptocurrency is stronger than normal currency as well
👍  
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@miliatsis ·
$0.06
Great article for us new to cryptocurrency! Can't wait for the next one in the series!
👍  
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@arhitekt ·
Thank you, i will be posting part 2 tomorrow
👍  
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@naryvip ·
Yeah block chain is very growing technology everywhere and every country must adopt this system but the problem if for the places where there is no internet access and electricity 🤔
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@paulnulty ·
Great post but I'm not sure why people suggest ripple was first... I only heard of it last year...
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@paveit ·
We are all gathered here on steemit, which is based on a blockchain. Therefore, I think everyone already knows the crypto basics. Otherwise great post! Keep up the good work	&#128077;
👍  
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@pheonixdown-dee ·
Very informative article, thanks for sharing. I've smashed the upvote button for you and i look forward to the next part. There needs to be more articles like this as crypto only becomes powerful through mass adoption. 

Also, if you are looking to get some tokens without investing or mining check out Crowdholding (https://www.crowdholding.com). They are a co-creation platform were you get rewarded for giving feedback to crypto startups on the platform. You can earn Crowdholding's token as well as DeepOnion, ITT, Smartcash and many other ERC-20 tokens.
👍  
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@rickyislam ·
I like this post
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@simplywomen ·
I like this article. It's always useful to have different kind of explanations to have an overview.  Excited to read more about it .... :)    I hope you will like my storys too :)))
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@arhitekt ·
Thanks, will be posting part 2 tomorrow.
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@spaminator ·
$0.36
[Source]()
Using irrelevant tags, especially popular tags, makes it hard to find good and relevant content. Please try to use only relevant tags when posting. 

steemit
- A tag for posts about the Steemit website itself. Posts can include suggestions on how to use the website, improvements, or discussion about Steemit Inc.

steem 
 - This tag is for discussing the STEEM/SBD tokens or the STEEM blockchain itself.

More information:

[The Game of Tags](https://steemit.com/steemcleaners/@steemcleaners/the-game-of-tags)
👍  
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@supremekage ·
This is a great post!

Posted using Partiko iOS, join the beta testing program [here](https://goo.gl/forms/tBhlrSiG1LYOMAZM2)
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@teenovision ·
Nice and explained in a very simple manner
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@themoehawk ·
Unrelated topic, the photo in this article reminded me of POGs, anyone remember those? lol
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@transparencybot · (edited)
<h3>This post has received votes totaling more than $50.00 from the following pay for vote services:</h3>

smartsteem upvote in the amount of $180.14 STU, $242.62 USD.
promobot upvote in the amount of $100.14 STU, $134.88 USD.
therising upvote in the amount of $17.38 STU, $23.41 USD.
boomerang upvote in the amount of $6.89 STU, $9.50 USD.
ebargains upvote in the amount of $6.52 STU, $8.78 USD.

**For a total calculated value of $311 [STU,](http://steem.supply/rewards) $419 USD before curation, with a calculated curation of $77 USD.**

This information is being presented in the interest of transparency on our platform **and is by no means a judgement as to the quality of this post.**
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@tts ·
To listen to the audio version of this article click on the play image.
[![](https://s18.postimg.org/51o0kpijd/play200x46.png)](http://ec2-52-72-169-104.compute-1.amazonaws.com/arhitekt__what-are-cryptocurrencies-part-1-5-tutorial-for-beginners.mp3)
Brought to you by [@tts](https://steemit.com/tts/@tts/introduction). If you find it useful please consider upvoting this reply.
👍  
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vote details (1)
@yivg ·
excellent publication, very instructive, when will the second part of the tutorial go up?
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@arhitekt ·
Hey, i will publish part 2 tomorrow. Thanks
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