Cryptocurrency has been in the headlines off and on for the better part of ten years or so. It’s the subject of much controversy and debate. Some claim that it’s a worthless fad comparable to the Tulip phenomenon from the Dutch Golden Age of the early 1600s. Others promote it as a decentralized answer to fiat currency and central banks. They claim it will provide banking and financial services to people who are without, including the Third World.
Bitcoin is now over ten years old and it’s gaining strength all the time. In that time it has inspired numerous other so-called alt-coins. I believe there are over 1,000 cryptocurrencies, but I could be wrong. Nevertheless, each alt-coin is derived from an individual project that has its own mission and purpose.
Can I Buy Stuff With Bitcoin?
At the present you can make purchases with Bitcoin. The opportunities for this are limited and may involve tremendous fees. However, when Elon Musk invested over a Billion dollars into Bitcoin he said that consumers would soon be able to purchase a Tesla automobile with the electronic currency. In what might be a surprise to no-coin naysayers, consumer purchases aren’t really the best use or even the intended use of the cryptocurrency.
In fact, most financial gurus tend to view Bitcoin as a store of value much like precious metals, art, or other collectibles. In fact, MicroStrategy’s Michael Saylor claimed that Bitcoin is the world’s best store of value and that CFOs would be remiss to not use it for their cash reserves. He calls institutional investing in Bitcoin “rational action in response to monetary inflation.”
How does it work?
Well, that’s complicated. In fact, I cannot claim to be an expert in this matter. However, suffice it to say that cryptocurrency relies on something called the Blockchain. This is the fundamental backbone of the cryptocurrency world. The blockchain ensures encrypted, secure transactions, but also an indelible record of each transaction. That is, in each transaction, both parties have a 64-digit code that is recorded in a ledger.
Before these transactions can complete, a network of disconnected (decentralized) computers much validate the parties and other aspects of the transaction. Thus, each transaction is scrutinized by the computer code in a matter of moments. Pretty slick, but keep in mind that Bitcoin’s transactions seem to be slower than many of the up-and-coming coins.
Decentralization
The key to all of this, and why Bitcoin is both so powerful and reviled, is decentralization. Central banks don’t want to give up their control over the monetary system. Meanwhile, individuals and (increasingly) corporations are eager to avoid inflationary fiat currency that is subject to the whim of regulators, politicians, and other singular people/places/orgs. That is, while Bitcoin is deflationary, it will reduce its supply in measured increments, according to its code. On the other hand, alt-coin Dogecoin is inflationary, but only insofar as its code allows new coins to come to market. Thus, Bitcoin is terrific for storing and building value and Doge is good for spending on caviar and Lambos – or hot pockets and VWs, depending on what you’re into.
Cryptocurrency 101: Mine Your Own Coin
Ok, so this all may seem a bit odd or overwhelming or weird. However, there’s one way to delve into the world of crypto without buying new equipment, investing in risky, volatile assets, or reading a ton of books/blogs and watching endless hours of YouTube videos (tho you should certainly do that.)
This way is to mine your own coins. The Pi Network is in the process of creating a new cryptocurrency using a decentralized network of mobile phone users. Each day users click their phone’s Pi app and increase their holdings. When you join you can read the network’s White Paper which provides loads of valuable information.
Pi Network was created by Stanford PhDs and has gained my trust with its transparency, attention to detail, and, well, my own Fear of Missing Out (FOMO.) That is, I would love for the hundreds of Pi I mine to someday carry the same valuation as Bitcoin, or even Ethereum. Here’s an invitation:
I am sending you 1π! Pi is a new digital currency developed by Stanford PhDs, with over 10 million members worldwide. To claim your Pi, follow this link https://minepi.com/HobieOne and use my username (HobieOne) as your invitation code.
Learn More About Cryptocurrency
Now, you probably landed on this page to learn even more. I am here to help. Here is a list of resources that I have curated to help no-coiners or the curious learn more about the future. Yup, I firmly believe that cryptocurrency is our future. Anyhow, please feel free to copy this list or bookmark this post so that you can return to learn more.
- Finematics (website)
- Finematics (YouTube)
- Cryptocurrency Primer (Investopedia)
- Crypto Primer (Fidelity)
- Technical Info & News on the Crypto Space
- Crypto News
- Tokenomics – (YouTube)
- CoinBureau – (YouTube)
- CoinBureau (website)
- Using Binance (vid)
- Pave the Way to Mass Adoption (CoinTelegraph 2/23/21)
- Outdated but Informative Crypto Primer
- How to Cash Out (CoinBureau vid)
- Crypto Daily – Important Truths (humor/truth/philosophy)
- Bitcoin: At the Tipping Point (Citibank White Paper)
Disclaimer: I'm neither a financial professional, a financial guru, a computer scientist, a cryptographer, nor a lion tamer. Please don't take my advice on financial matters. I do have solid opinions on, well, nothing. It's a Karmic Universe – get out and do stuff.