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The Intro To Crypto

Updated on August 5, 2018
Chris O Sanders profile image

Chris is an IT professional with over 10 years experience in the field. He specializes in cyber security and cryptography in networking.

Crypto: Currency Of The Future Or Wishful Thinking

It is important to remember that cryptocurrency is actually the by product of another invention, "Peer-to-peer electronic cash". It was developed by a person(s) named Satoshi Nakamoto. He has always been an anonymous figure in the crypto world but widely considered the father of cryptocurrency. The most important part of his invention was that he created a decentralized digital cash system. Many had tried prior to Nakamoto, in the 90's, but none had succeeded.

After seeing dozens of third party centralized platforms fail, Nakamoto decided to decentralize the process and make the process peer to peer, like a file sharing network (uTorrent). In normal banking transactions there is central ledger that keeps track of all transactions, in this process every node is responsible for keeping records.

His goal was to take private and government interest out of the equation when conducting financial activity. With that being noted, there has been an explosion of support for this effort and countless new iterations to enhance and solidify Satoshi Nakamoto's ideals.

Bitcoin had a value of $0 per coin, but now sits at $7,000 dollars per coin, having grown over the past 9 years.It peaked at point reaching $20,000 a coin.It looks as if it is here to stay with its rapid adoption rate by financial institutions and it's price predictions of one day being a million dollar coin.

How It Works:

Peer-to-peer transaction process
Peer-to-peer transaction process | Source

So What Are They In A Nutshell?

Take the money in your bank account, Isn't it numbers in a database that can only be changed under specific conditions? You can even take physical coins and notes out of your account. What else are these but limited entries in a public physical database that can only be changed if you meet the conditions that you physically own the coins and notes? Money is all about a verified entry in some kind of database of accounts, balances, and transactions.

Cryptocurrency essentially speeds it up!

The Tech Age Of The Economy

Cryptocurrencies are like digital gold. Money that is secure from political influence. Money that promises to preserve and increase its value over time. Cryptocurrencies are also a fast and comfortable means of payment with a worldwide scope, and they are private and anonymous enough to have enticed black markets and any other outlawed economic activity to use it.

This while being handy, has caused the biggest roadblocks for the crypto world. With sites like the Silk Road which are ran off crypto currencies. But government regulators have been swift in addressing and taking care of these problems.

Top 3 Crypto Price's

Coin
Price
Max Coins
Bitcoin
$7525.00
Total Coins: 21M
Ethereum
$418.71
Total Coins:101.098M
Ripple
$0.44
Total Coins:100B
Coin Price, And Market CAP

Because Of It's Design You Don't Have To Buy Whole Coins

The beauty of this currency is that it can be broken down and sold to the decimal. So if Bitcoin as of now cost $7,000, you could buy say 0.05312719 BTC or $393 worth. But say you spend that on a small coin such as Ripple, well that gets you about 800 XRP coins. The goal is to find something you can afford to invest in and HODL.

A Passive But Expensive Way To Make Crypto Is Mining

An advanced Bitcoin mining operation.
An advanced Bitcoin mining operation. | Source

Short Intro To Mining

Each time a cryptocurrency transaction is made, a cryptocurrency miner is responsible for ensuring the authenticity of information and updating the blockchain with the transaction. The mining process itself involves competing with other cryptominers to solve complicated mathematical problems with cryptographic hash functions that are associated with a block containing the transaction data.

The first cryptocurrency miner to crack the code is rewarded by being able to authorize the transaction, and in return for the service provided, cryptominers earn small amounts of cryptocurrency of their own. In order to be competitive with other cryptominers, though, a cryptocurrency miner needs a computer with specialized hardware.

This essentially is the hardest part weighing the cost of operating the equipment versus what you'd make everyday. But it is a really easy passive income once you get started.

Markets and Exchanges

An exchange in crypto is essentially the place where you buy your cryptocurrencies. It is pretty simple once you've found a exchange that suits you online. They essentially act just like any exchange for the stock market, you are allowed to see today's volume as well as current trading prices.

You can set limit, market, and stop-limit orders as you would on any other stock exchange. If you are already an investor the learning curve for you is really low, as you aren't learning anything you don't already know.

Below I'll show you an example of a typical cryptocurrency screen so you can gain an understanding of what they look like. I'll also be doing an article on exchanges and some of the best ones.

I'll show you some of the ones I personally use for trading.

A Look At An Exchange

An example of an crypto exchange, daunting I know but simple once learned.
An example of an crypto exchange, daunting I know but simple once learned. | Source

But How Does Bitcoin Have Value?

Right now the price of Bitcoin is determined purely by what people are willing to invest in it. The coin has been in somewhat of a bubble (though at this time we have seen a steady decline in the coins value) and it's price has been driven purely by speculation and media hype. Which is why we see tremendous rises in its price and rapid falls. Though the price is said to grow more stable once the media and general population get tired of it.

But that does not mean the coin does not hold intrinsic value, and cannot grow to being adopted en mass. Quite the contrary it's value will only grow as it is adopted by more and more legitimate investors. And the more it is adopted the lower it's volatility will become, encouraging more to adopt the coin.

Bitcoin must ultimately lock down it's place as an medium of exchange in the market. It must gain a value akin to gold or at the least a percentage of it.With the projection that one day there will be only 21 million coins in circulation, bitcoiin must reach a market cap of 10.8 trillion dollars, or $514,000 dollars a coin.

Also we must look at what markets bitcoin may actually disrupt, and see how that market begins to adopt bitcoin going forward.

Bitcoin Growth

How Bitcoin has grown over the years.
How Bitcoin has grown over the years. | Source

How Intrigued Are You By Crypto?

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