Understanding the Language of Cryptocurrency

in crypto •  8 months ago

“At its very basic level, money isn’t value. Money represents an abstraction of value; it’s a way of communicating value. It’s a language.” — Andreas M. Antonopoulos

When I first began my crypto journey, all I knew was that cryptocurrencies were valueless in the same way paper money is valueless: neither are comprised of any materials of worth. One is made of paper and the other is a sequence of digits. They are exactly what Mr. Antonopoulos says: objects that communicate the value of another object but contain no value themselves.

So if crypto, like the dollar, has no value other than what it communicates, then how do we know what it “says” without understanding the language it speaks? Like any language, the easiest way to learn is to immerse yourself in the culture and among fluent speakers, and also by understanding its roots. Learning the language of crypto is my Education Tip #2 and this article describes how I learned what you need to know.

Money Talks: What Does it Say?
All languages constantly evolve and the language of crypto has evolved from financial languages of the past. Understanding what early money said is key to understanding what crypto is telling us today.

Money 1.0: Coins
The first iteration of modern money was in the form of precious metal coins. Silver and gold coins had an intrinsic value because of their physical composition. A person could look at a coin, hold it, and weigh it to verify that it was authentic and worth the value assigned. Precious metal coins spoke directly to us because they had intrinsic value.

Money 1.5: Leather Money
Leather money was used in ancient China after an emperor decided to cure an inflation crisis by issuing bills made from the hide of an ultra-rare white stag. Decorating the rare skins with ornate designs to further prevent duplication, the emperor arbitrarily decided that each piece was worth 400,000 coins. When princes visited the emperor, they were compelled to purchase one of the skins using coins which ensured their circulation and the crisis was eventually resolved.

The language spoken by leather money was created by the emperor. He assigned value as the central governing authority and everyone trusted one skin was worth 400,000 copper Chinese imperial coins. Leather money didn’t speak directly to the people; it communicated on behalf of the emperor.

Money 2.0: Paper Money
Paper money was the next logical step in the evolution of money. Lighter than coins and easier to transport, it took the arbitrary assignation of value a step further than leather money. It was capable of representing many different tangible assets (beyond an emperor’s 400,000 imperial coins), and new possibilities fostered new monetized exchanges.

Today, paper money, such as the USD, for example, speaks to us too. Made of money, it tells us that it is easily duplicated and contains zero intrinsic value whatsoever. Like leather money, USD is backed by a central authority and investors trust in the value it communicates because it is guaranteed by the American government. Paper money today fluctuates and is easily manipulated by governments, bad actors or is just subject to basic market variables. It speaks a complicated language and is becoming increasingly untrusted which is part of the reason why crypto came about and speaks the language it does.

Money 3.0: Cryptocurrency
Learning the language of crypto is especially important because most crypto isn’t valued and supported by a tangible asset.

Bitcoin, for example, is unsupported by any central authority, and there are many complex aspects of the crypto language that requires study. At the beginning of my journey, I knew I needed to interact with traders who were fluent in crypto language so I could understand the value of what each coin communicated before investing my money. If one crypto coin is valued at a number unsupported by a tangible asset and is truly a currency of, by and for the people, then I needed to understand the people invested in the market and driving its value. Reaching out to them on Twitter was my first step and ultimately it proved invaluable. It still does. Here’s what happened…

What I Did to Start Learning?
I started an anonymous Twitter account and got to work. I recommend an anonymous account because it gives you more freedom to communicate honestly about your money (which is nobody’s business but your own), and it lets you feel free to ask dumb questions as you are a “noob” in this financial space. (“Noobs” is a word used by crypto enthusiasts to describe new investors.) I began actively listening and learning on Twitter daily, searching and studying posts of other crypto-minded subscribers who made comments and predictions that were insightful and accurate.

When I saw who seemed to be making the most sense and whose forecasts were most reliable, I engaged with them through DM’s or simply followed them. I also became active on Telegram and this exchange of communication expedited my journey of self-education and financial success exponentially. I learned more in a month of active engagement on these platforms than I would’ve in six months of reading books or otherwise. Even today, the contacts I made in the early stages of my journey continue to be some of my most valued resources as an investor.

Learning the language of crypto is an investment and I approached it like a part-time job. This is how investors should approach their research and decisions about which coins to purchase, trade and which ICO’s to involve themselves with. Parsing out which coins and which crypto experts communicate anything of true value requires an understanding of the language of cryptocurrencies. Like words, cryptocurrencies are intrinsically worthless unless they communicate anything of value. The value communicated by crypto is information but information lacks value without trust. At Tradebits, truth is our trademark and our coins communicate trust — a value you can bank on.

Please look for my post for more information on how online contacts can help guide your understanding of crypto investing @MillennialMike7

Please follow us on Twitter at @MillennialMike7 and @TradebitsX

About Tradebits
Headquartered in The Hague, The Netherlands, Tradebits is building the digital currency trading platform for the next 100 million users. It is the most high-performance, flexible and reliable digital currency exchange platform, capable of scaling and handling an unparalleled number of users and transactions per second and adaptable to the skill level of any trader.

Tradebits uses the same principles that power and secure the world’s most demanding stock exchanges. One of Tradebits’ hallmark features its configurability to match the sophistication level of every cryptocurrency trader. Users of the exchange will have access to 24x7 live customer service as well as a myriad of 3rd party trading apps and resources through the Tradebits Marketplace. Tradebits gives back to its community by using 40% of all trading fees for the continuous purchase of XBITS tokens across various exchanges to generate upward price pressure.

Join the discussion on our Telegram channel: https://t.me/tradebits_exchange

Read our whitepaper: https://tradebits.co/whitepaper

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More info: tradebits.co

Author: This article was written by Mike Rogers, VP of Crypto Education & Research at Tradebits #Millennial

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