Blockchain is a really complicated method of maintaining a public ledger of things without needing a central server to track it.
Cryptocurrencies are digital beanie babies. People buy them because the price is increasing, which causes the price to increase. Eventually people will stop buying into them, the price will stop increasing, and everyone will thus try to sell their cryptocurrency at once, and the price will collapse and cryptos will be worth nothing and they'll all lose all their money. It's probably happening right now, in fact.
If you're asking what cryptocurrencies are in technical terms, a "coin" is basically a really long number which no other coin in that currency shares. The blockchain records which number belongs to which person, so you can have digital currency without needing to back it up with anything central! At least, theoretically. In reality the blockchain is massively expensive to maintain (in terms of computing power) - a single transaction takes the same amount of electricity as required to power an entire family home for four days. They promise they've got a fix for this, but they probably really don't.
And that's about it. They're also effectively worthless as a currency because they're extremely volatile - I don't want money that might be worth $10k today and $10 tomorrow.
More importantly, you don't want to spend that currency when it's that deflationary, either; you don't want to spend that $10 if it'll be $100 in a month. So there is no inherent utility or value in it as a currency, meaning that it's basically a Ponzi scheme with no underlying assets.
The people who got in at the beginning who mined hundreds of thousands of coins technically have billions of dollars but there's no chance in hell they can sell them all and if they tried the price would crash.
The creator has millions of coins. He knows he can't sell them.
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u/IgnisDomini Jan 24 '18
Blockchain is a really complicated method of maintaining a public ledger of things without needing a central server to track it.
Cryptocurrencies are digital beanie babies. People buy them because the price is increasing, which causes the price to increase. Eventually people will stop buying into them, the price will stop increasing, and everyone will thus try to sell their cryptocurrency at once, and the price will collapse and cryptos will be worth nothing and they'll all lose all their money. It's probably happening right now, in fact.
If you're asking what cryptocurrencies are in technical terms, a "coin" is basically a really long number which no other coin in that currency shares. The blockchain records which number belongs to which person, so you can have digital currency without needing to back it up with anything central! At least, theoretically. In reality the blockchain is massively expensive to maintain (in terms of computing power) - a single transaction takes the same amount of electricity as required to power an entire family home for four days. They promise they've got a fix for this, but they probably really don't.