Cryptocurrency 101 – a crash course into the world of Bitcoin, Altcoins, and Blockchain Technology
This episode will teach you all about cryptocurrency, Bitcoin, altcoins such as Ethereum, and the fundamental technology behind it all. Think of it as a crash course into the world of Blockchain and virtual currency. If you enjoyed this episode feel free to donate some Bitcoin BTC to this address: 1MZwVqRq56aHuGXxr2tBHw8TiZfZ4fAwVo
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In today’s episode I’m going to talk about cryptocurrency. And all of the different aspects of it, including Bitcoin and blockchain and other alt coins, it’ll be a crash course like crypto one on one, so you’re really going to be learning the basics in terms of what it is, the characteristics why you should use it up coins the technology it’s built on how to invest or why to invest, and the exchanges. And the first thing that you should know is that Bitcoin was the first one. It’s the granddaddy of crypto in the creators anonymous Satoshi Nakamoto nobody knows who he is. And there’s no government or bank regulations. I mean, they’re starting to do some at the SEC and the IRS and things like that but for the most part, nobody controls it. You can send money anywhere around the world within seconds without many fees or a lot of restrictions in place, bank fees, credit card fees, that kind of thing. It’s very kind of fluid. The market cap at one point was reaching a trillion dollars. It is 100% virtual so there’s no paper money there’s no coins, although they are virtual coins. And believe it or not, we’re still in their early days when I try to explain cryptocurrency or Bitcoin to people, they always say but what is it is it Monopoly money is it fake money do I kind of get coins like what exactly is it.
Well, it’s a decentralized digital currency, and I’ll explain more about what decentralized is in a moment, but it is also a medium of exchange so kind of like money or a barter system. It was especially made with the internet in mind, because the transactions are added to an online blockchain, or, you know, an internet based blockchain, which I’ll also get into if the transactions are confirmed by miners mining rigs, or people who own computers. And then Bitcoin is given as a reward to those miners for performing the transactions. And there are a ton of cryptocurrencies out there. So decentralized, what does it really stand for? It means that it’s not stored on just one server or one computer, it’s split up into many so you know my computer could be a host for transactions and the million other computers around the world or mining rigs can be hosts for transactions. And what happens is, since all of our computers are not based in like a warehouse, we’re all separated by houses and buildings that decentralizes it so that it’s not being controlled by one centralized entity that’s a great example of why centralized systems don’t work well. Are the multitude of hacks that have taken place whether Yahoo or Dropbox, even when Ashley Madison was hacked banks are hacked hospitals were hacked, Equifax had a hack that 143 million American citizens were hacked, me included my identity was compromised my social security number everything because of this Equifax hack my data was stored on a centralized server, and because of that the hackers were able to access it, along with everybody else’s and steal the information. Whereas when it’s decentralized, the data is not stored on a server. It is split up into pieces and stored on multiple computers, around the world. So it’s harder to hack. Not only that but centralized systems. They control the funds.
Okay, it’s not anonymous, and people can hack it, whereas decentralized the users the people they control the funds, it is anonymous, and it’s very difficult to hack, there’s not a lot of downtime on the servers. Now, a lot of people said well, Jason. This all sounds well and good but it also sounds complicated, how do I send money to my uncle in Georgia or how do I send my money to my, my niece in Europe. Well, it’s not that hard. Actually it’s just the same as sending an email or paying through PayPal or, you know, paying with a credit card, you send money to your friends from your Bitcoin wallet to their bitcoin wallet and it uses the Bitcoin network of miners and the blockchain to do that. It happens very quickly. It’s very easy. You just need a Bitcoin address to send it to, you know, and just like the internet uses the HTTP protocol. Bitcoin uses the blockchain. A lot of people say okay great. It sounds awesome on this blockchain. But what exactly is a blockchain. And it’s actually quite simple, a blockchain is just like for example the Godfather, he had a public ledger that he and his people would keep track of that transactions, people who would owe them money or people that he would, you know they have to collect money from these are just transactions think of a spreadsheet where you keep track of your expenses. Okay. And that’s a ledger basically it just shows what
you spent, what you made it’s a profit and loss type of thing, blockchain is a little different. Of course, it’s more about, you know, public transactions and you can actually see those transactions on but blockchain Comm. You can search for transactions and you can see them there. So it’s a very public thing, you know you’re able to see all the transactions. And the people who perform those transactions, like I mentioned are miners. These are people, or it’s a company, they have powerful computers. They run algorithms all day long to solve complex formulas, and they process the transactions, when they do that, not only do they create new coins, but they earn rewards. That’s how people make Bitcoin when you hear someone saying, Oh, I’m making Bitcoin with a machine.
They’re actually processing transactions and getting rewards for that. There are tons of kryptos, if you go to coin market cap calm, you’ll find a ton of them. There are a lot of alt coins, as you’ll find throughout my episode I’ll be talking about a couple. And there are some resources you can use, some of them are coin market cap calm. If you go to coin market cap, calm you’ll find all the top cryptocurrencies by market cap. It shows you their prices, it shows you their percentage change in 24 hours, it shows you their circulating supply. If you click on one of them, you’ll find more information about the coin so if you go to the coin market cap and say you type in ethereum, eth the symbol. You see how much it costs, you’ll see the website for it, you’ll find the historical data, you’ll find some information about the coin, you’ll see its market cap its volume per day, and you’ll find all the ways to connect with people who also like Ethereum, and that’s on coin market cap calm, which is very popular for this type of thing. So what are the characteristics of cryptocurrency like what actually, you know, makes it so that a coin is a cryptocurrency or an entity is a cryptocurrency. Well there’s various different things. The first is, they’re built on algorithms. There is a source code, and it’s usually open source, the coins are traded on exchanges, where you’re able to buy them on coin base calm. There is a finite amount so there is a limit, unlike gold and, you know, minerals and things like that where you can keep mining them in the earth. There is a limit for example with Bitcoin is like 21, million, you know, in other coins you’ll find they’re in the millions or the billions of coins, but there is a limit so once you reach that limit you can’t make them anymore.
It’s global international. I mean it’s all around the world you can do this, there’s no borders when it comes to crypto. It’s usually anonymous in some shape or form, especially coins like Monero that are completely anonymous. And there’s no fees or waiting, I mean I’ll say there are some fees of course when you, when you process a transaction when you send coins you do get charged a fee, but there are minimal fees and the waiting is not as long as like say a wire transfer or sending money around the world Western Union is very slow and what I want to send money to someone to a different country it’s slow I mean I got to use a bank I got to drive to a bank I got to fill out forms I got to give them my ID I got to make sure the money’s in the bank I have to process it. If it’s Western Union I got to fill out some forms I have to drive the Western Union, etc so it’s kind of a clunky process to send money around the world, whereas with Bitcoin or ethereum or Litecoin or, you know, all the other coins out there, it’s actually not that bad. It takes just a couple clicks of the button, a couple clicks of a button and you’re in, it’s it’s it you know and it is growing faster and faster it’s becoming more and more mainstream. And there are a lot of different types of cryptocurrencies, there are some for enterprise level customers, their civic there for retail, there’s entertainment there’s banking. You know it’s software it’s content privacy legal.
There’s so many different things that you can use crypto for. And most of the reasons people use it is because of the transaction speed and the cost, it’s just fast and cheap. There’s a lot of types of algorithms. There are a lot of communities that are supporting these cryptocurrencies and that’s important. The support is important The teams behind the companies are important. And the usage in society and the investor involvement. To me that’s probably the biggest piece. Where can you use Bitcoin Where can you use it theory and where can you use all of these different cryptocurrencies in your life. That’s how you know something is useful. And that’s why I believe it’s still growing. You know, there’s always that joke about the guy who spent 10,000 Bitcoin on a pizza, when it first came out and now obviously he regrets it a little bit but he did go down in history as the guy who spent 10,000 Bitcoin on pizza. So if you could buy a pizza with Bitcoin and now you’re going to spend a fraction of a Bitcoin for pizza. Imagine what else you can pay for with Bitcoin.
You can find a lot of articles on medium.com and wikipedia.org, and also bitcoin.it is a good place to go. It’s a Wikipedia for Bitcoin bitcoin.it, and you’ll find a lot of information about Bitcoin, so I’d suggest if you’re interested, check it out and read all about it. So a lot of people ask me, why should I use Bitcoin? Why should I use cryptocurrency? What’s so special about it that I should be using it might not just use money. Well, again, you can send it everywhere, everyone has access I mean we’re not gonna, you know, cryptocurrency does not discriminate if you have a smartphone or you have a computer, you can use cryptocurrency you don’t need a bank, you don’t need a credit card you don’t need all these accounts, just sign up for Coinbase buy some crypto send it to someone around the world. And you can actually interact with the money. That’s the cool part is, it’s not just getting money in the mail from a cheque or going to the bank and tapping your ATM, it’s actually being able to create the money with these transactions. It’s kind of cool.
You can help create a decentralized internet, which means more control because there’s no banks or government involved and you can earn a profit. If you start investing or trading in alt coins. Now this is where things get a little trickier because people always think well Bitcoin, you know, they always say well Bitcoin is a cryptocurrency but what are alt coins I’m confused. Well, it’s actually not that hard. Alt coins are just alternative coins, it’s another term for cryptocurrencies, other than Bitcoin, and there’s a lot of them. There’s ripple and Iota Litecoin there’s cardano, if you go to coin market cap once again, you’ll find a lot of them. One of my favorites is ethereum, which reminds me of when Henry Ford made the Model T, and now there’s these modern cars. Well, let’s see Bitcoin is the Model T of cryptocurrency it’s the original granddaddy well that these new these new sleek modern cars are coming out and one of them is called a theorem, where they decided to implement something called smart contracts, smart contracts is nothing more than a contract, it’s say you go to buy a house and you have a seller’s agreement word contract. And that is what you consider a smart contract. Now, the difference is, when you have a contract between two people whether you’re buying a car or buying a house. You have to get all this paperwork, you got to go to the notary you got to get things sign you got to, you know, processed transaction, you have to get a check from the bank and you know it’s just a lot of paperwork right Ethereum eliminates all of that by saying, This is the term of the contract. This is a smart contract the terms are on buying this from you, and you’re selling this to me. And we’re putting our funds in escrow in the smart contracts. So, as soon as I receive my house or whatnot.
The smart contract is now complete. And the funds are released to the seller. It all happens automatically. On the blockchain without any paperwork it’s so much better. And that’s why I think aetherium has definitely grown and the Icos the initial coin offerings that were built on the Ethereum blockchain over the years back, mostly in 2016 and 17, and they’re still being built in 2018 exploded because people realize oh we can start making these smart contract applications or daps these decentralized applications on aetherium network. So think, you know, a good example is like the Apple App Store. Okay, you have an iPhone, and you download all these apps. Well Apple made a software called Xcode or Swift, to allow developers to build applications on their platform, and then they release them to the public to use. That’s the same thing as this, you’re able to build these daps, these decentralized applications on the Ethereum blockchain by learning a language that a programming language that you can use to build this smart contract
enabled platform or coin. And this is the best part about aetherium is it does have the smart contracts, another company that I like that as smart contracts are cyprinus, and they’re a decentralized cloud storage company that are relatively new but growing very quickly and they have a great community, it’s encrypted it’s decentralized it’s immutable. So, there are computers all around the world that are hosting people’s data, and it’s split up into pieces, so that it’s harder to hack or manipulate and it makes it a lot cheaper to host your large amount of data, financial spreadsheets, you know your your your video files your all your important documents your photos instead of getting them leaked out on Dropbox and all these other companies Amazon Microsoft and these big names.
You should give a try to a smaller startup that is helping pave the way for potentially stopping things like this happening where Game of Thrones had their script leaked and HBO had some episode delete of different shows. And so by splitting up the information into little bits and pieces and storing it on the cybercrime cloud network. It’s a lot like renting your home on Airbnb or being a driver for Uber, you’re basically renting your hard drive space on your computers to host the data. So it’s another kind of like an on demand storage company. Another popular coin that you’ll probably hear a lot about is called ripple it’s a centralized blockchain solution for global payments it’s enterprise, so it’s meant for big companies and banks, so a lot of people heard about this because it’s very popular in the news and whatnot, but you’ll find that there are a ton of alt coins out there. So definitely do your research, when it comes to alt coins. So now I want to quickly touch on the technology behind all of this, and as you know there are a ton of companies out there like Reddit Airbnb Snapchat, Instagram, Google, eBay instacart Amazon Facebook, you name it. Why is Facebook valuable? Well, the technology connects people. It has a network effect of billions of users, the algorithms it uses to help you get a good feed or to find friends, you know, and it had a great team. To start, and it continued to grow because of that. Well, all coins are tech companies, they have the founders and the developers, they’re coding all day. They add value to some kinds of society. They’re decentralized. People can join in the profits with this next level of crowdfunding using Icos, but you have to make sure, here’s the thing. You have to read their white papers, to make sure you understand exactly what they’re building a white paper is basically just a PDF document that explains to you what they’re going to build, how they’re going to build it, how they’re going to market the product. The problem they’re solving in society.
So just make sure you read them, so that you understand exactly what you’re investing in, and by all means, always research the team behind the company. Check out their LinkedIn pages. Check out what they’ve done in the past. Make sure you understand who you’re investing in because technically, you’re investing in the team behind the coin behind the company. And you’re basically putting your money into someone saying, I think these guys are gonna succeed, they’re very smart. They’ve had exits and other companies before they build other cryptocurrencies. I think they’re gonna succeed so that’s what you’re investing in you’re investing in the coin but you’re investing in the team so make sure you really really study the team. And when it comes to investing. I do have to say, I am not a broker, so I am not responsible for anything here, my disclaimer is do your own research this content is for informational purposes only. Do your own analysis, your own research. I am not telling you what to buy, how much to buy. I am just giving you information so you make your own decisions at your own risk. And as they always say only invest what you can afford to lose. The first thing you can do is look at Icos although there aren’t as many as There used to be. A lot of them are scams, you have to be careful. So again, do your research, I would more than likely just look at coin market cap calm. Look at the volume the circulating supply, but historical data, the available markets, check out the chat rooms look at the marketing, look at the, the social media, check out the announcements, really look at everything before you invest,
and I always jump into their discord, which is discord.com chat room, and I’ve talked to people about the coin. I look at the conversations and I see what they’re talking about. And see what they’re pushing onto GitHub in terms of code. And that’s really how you learn a lot about a company is really looking at the community and what they’re doing. The SEC crackdown on Icos at one point, and they really started putting some regulations in there so definitely check out the SEC when it comes to crypto and Icos. There are some really cool cryptocurrency signals on trading view calm which I recommend if you want to really dig deep use trading view calm, as well as coin checkup calm, these are two really cool websites where you can find some good information about coins. And there’s a cryptocurrency calendar called coin market cap calm, you might want to check out as well. So there’s a lot of resources you can look at where you can invest which would be coin based calm it’s the number one. And there’s of course, exchanges, such as Coinbase, you have bit treks.com you have finance calm. These are all cryptocurrency trading markets where you can trade Bitcoin for other coins and Coinbase is basically where you can really buy and sell a lot easier.
You can also earn some if you invite friends to buy crypto coins with you. But this is really the first place you want to go is Coinbase to purchase anything. And that about wraps it up about cryptocurrency there’s a lot more you can get into so I would suggest going to the coin desk. COMM where you’ll read a lot of great news about cryptocurrency it’s probably the best place to go to learn about it under coin telegraph as well the coin desk is the number one news resource to really learn about it. Go on Wikipedia, go on to the websites of different coins that you’re interested in. And why not just try to buy a little bit of Bitcoin it only has to be $50 worth $100 worth, you don’t have to buy a lot you can buy just a fraction of a Bitcoin and go on coin market cap, make sure you look at all the coins available on there that you’re interested in. There’s a lot of them. I always tell people to look at the top 20 coins, and don’t really go down too far. Sure, you’re gonna see a lot of people saying, oh, but you know this coin is flying high. It’s growing really fast. I should probably get it. But here’s the thing. If you see a coin is flying high and going fast, you already missed that opportunity to buy low and sell high. You always want to try to. I know it’s hard, but you always want to try to buy a coin when it’s low. And then as you see, climb watch when it hits, what you would think is the top or the peak, and then sell it for your profit. And if you’re not trying to trade and you just want to invest because there is a big difference. Just buy the top 10 coins top 20 coins, a little bit of each every month, and just hold it in your wallet, until a couple years from now or five years never whenever you see it really really high in your portfolio now looks great, which I recommend using block folio app which is a really good app where you can keep track of what you have. When you see it really, really grow, sell it. That’s your investment. And I hope this helps you overall in the cryptocurrency world, and Bitcoin is accepted here so feel free to send me some only my address below. And I appreciate your time. Hope you liked what you heard, and I’ll see you on the next one.
