Published: Jan 9, 2018 4:46 p.m. ET You have to distinguish between market value and intrinsic value — and cryptocurrencies have no intrinsic value It’s hard to go a day without someone asking me a question about bitcoin. Let’s start our discussion with the technology that made bitcoin possible.

It’s called “blockchain.” In simple terms, blockchain technology is a record of all transactions ever done in bitcoin. Imagine a gigantic piece of paper that lists every transaction ever completed.

Then imagine that there are thousands of copies of this paper, and all of them are automatically updated when any two people agree to exchange bitcoins. Every time a transaction takes place, all these copies are checked for consistency to make sure you actually have the bitcoins you claim to have.

If everything checks out, the new transaction is added to all the pieces of paper at once. This is the heart of the genius idea that is blockchain, and what makes it possible to have certainty over a bitcoin balance someone owns, without needing any central party (such as a bank) to verify it.

If all the pieces of paper agree, then the balance is correct, and trying to doctor or fake all the pieces of paper at once is impossible. The best (and worst) thing about this technology is that it has been made available for free to anyone who wants to use it. Read more from…

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