Let us break this down
1. You have an idea to get into cryptocurrency
2. You get on your computer
3. Get a unique private key
4. Start mining for Bitcoins
5. On something called the “Blockchain”
6. Your mining was successful
7. Soon you receive coins
8. This all equals Bitcoins
Now let us piece this together. You have been hearing all about this crypto-currency business and are interested in owning a piece of the action. So one day you have an idea to get a friend together to see if you can figure out a way to own a few cryptocurrencies. You understand that you need a private key to start “mining” for Bitcoins this being tracked via a Blockchain network. Hazaa! Your mining attempt was successful and soon you receive coins. Congratulation you now have digital currency; but now what?
Again this is simply for educational purposes, Think of the Orca Leaders just showing a new baby calf how to hunt. #podstrong
Bitcoin: Bitcoin is a digital currency that is decentralized and facilitates peer to peer money transfers. It works on supply and demand and is watched over by “miners” who have the computing power and are rewarded with Bitcoins for helping facilitate transfers.
Block Chain: Database that uses a concept called “blocks” to record data, each block has a timestamp and is secured from being tampered with offering a new level of security
Mining: Basically, it involves solving a computationally difficult puzzle to discover a new block, which is added to the blockchain, and receiving a reward in the form of few bitcoins
What is Crypto-currency?
Digital assets that are designed to help facilitate peer to peer sharing using cryptography to secure each transaction and to control additional units being added. Think of this as Venmo, you can share money but it takes 2-3 days to get that money out of Venmo and into your bank account, cryptocurrency is trying to make it instant by using its currency to share. Some of the cryptocurrency out there right now are
And many many more. Each currently has its own market cap that can be found here
Why do you care
• This could potentially help revolutionize the peer to peer sharing of money
• More and more retailers are accepting cryptocurrency payments
• Cryptocurrency is slowly becoming an alternative investment strategy
Alternative Ways to Invest
GBTC: Grayscale Bitcoin Investment Trust
- Publicly traded Over the Counter which means you can invest in it, again work with a professional to determine if this is right for you
- The price is derived from the value of Bitcoins as it tracks the Bitcoin market
- It acts very similar to funds that get their value from tracking Gold.
- Way to invest in Bitcoin without holding on any physical coins
The Good The Bad and The Ugly
•This is a new way to share money, securely and faster with fewer transactions cost with anyone around the world (Good)
•There is no real history to predict the trend of where these currencies will go and with new ones coming up every day there is extreme volatility in the price (Bad)
•Because the money is easy to transfer and generally in the hands of people with the know-how to mine for the currency or be part of the network, it is being offered a lot in “Dark Web” and becoming a new form of “dirty money” because of its intractability (Ugly)