Explaining the Rise of Crypto & the Decline of Fiat to Our Families
The following article was written for my family and friends.
Bitcoin as a brand name spawned a new market of crypto assets. There are now almost 800 different crypto currencies and assets at https://coinmarketcap.com and https://www.worldcoinindex.com The total market cap as of June 2017 was 109 billion USD.
A great intro to get your feet wet with cryptocurrency is a social media website based on blogging and community: Steemit.com. Steemit is free & decentralized platform that generates cryptocurrency rewards for everyone just by blogging, commenting and up voting each others articles, posts and comments. By using it just as you would use Facebook, linking to news articles, YouTube videos, and commenting as a community, the blockchain rewards you and “mines” or generates a STEEM cryptocurrency.
This video interview with Dan is a great intro to the idea behind decentralization. I recommend fast forwarding through the first seven minutes which is ads for an event that has already transpired.
You could cash out this STEEM currency into US dollars or hold it. Very few Steemians cash it out because we believe that eventually we will live in a world that will be decentralized. We will no longer need central banking to “hold” our money for us. Here is a great interview with Dan Larimer, one of the founders of Steemit, who has already developed two cryptocurrency blockchains (Bitshares and STEEM) and is currently working on a third, EOS.
This decentralized site that Dan helped start, steemit.com, takes Facebook many steps further. Not only is it a blog site but it is also decentralized so no one “owns” it. STEEM coin ownership happens when someone follows you, you author a blog piece, or up vote peoples blog pieces or comments. The more STEEM you earn, the more money you make. You can always convert your STEEM into US dollars if you want, but most of us choose to just let our STEEM accumulate. This is how we are building the new paradigm in the STEEM sector. Last time I looked, Steemit.com had a market cap of 381 million.
Blockchain is the first decentralized “out of the box” paradigm and is often called the fourth industrial revolution. Recently there was an ICO for something called IOTA (the Internet of Things). ITOA has created the tangle which is a web of "nodes" that creates clusters of dots. The dots are unlimited, just like stars. They represent smart devices just like we have in our homes now… like light bulbs. IOTA is just getting started at this point. It’s price is about $.39 a MIOTA and the wallets are still in development. This type of thing has a lot of potential, as you can imagine.
ICO’s are a recent crowdfunding race that has picked up momentum in the crypto world. It’s like the gold rush in the Wild West. Before attempting an ICO now, I read the white paper, make sure there is an actual working product, ask myself if I would use the product, and I would generally only enter an ICO with a cap or else my funds would be watered down and I would be better off leaving my funds in ETH. With the exception of EOS which I will cover below. Historically, the whales mostly push out the small investors (minnows) on the day of the ICO because they know how to push to the front of the line. The small investor tends to lose time and sometimes transaction fees. Up until early 2017, it was possible to get into an ICO as a minnow. Unless a new investor knows how to use Ethereum Mist or Parity, it is generally difficult to time an ICO that has a cap at this point in time.
Recently, EOS started it’s ICO which is an extremely ambitious project that positions itself as an operating system for the crypto asset sphere. This has not been attempted before and is off to a great start with a multi-layered ICO that includes the entire community by running for an entire year so that it is truly decentralized and includes everyone that wants to be a part owner of the new system/community. It is possible for new investors to enter the EOS ICO and take part in something that may have a great future. Read the white paper, read the various blog pieces on Steemit.com and decide for yourselves.
As a new investor, if you want to invest in something new, take a look at projects already in development that are inexpensive, have a working product (i.e., Siacoin (SC), might be something that you believe that you might use yourself, and have a white paper that is more than just a theory. This chart by William Mougayar is a wonderful visual that explains this idea. Is it a working product?
Of course, there is a blockchain that is already working: Ethereum. ETH is laying a grid for institutions right now with major companies like Microsoft, Intel, JP Morgan. You will find more on this at https://entethalliance.org Below, you will find an interview by Joseph Lubin describing how consumer awareness will enter the Ethereum sphere in a couple years, after the institutional layer is built. What is happening now, behind the scenes, is a necessary part of building the grid.
Ethereum is created by Vitalik Buterin, a genius kid who loved playing with Excel and made millions on Bitcoin at a very young age after falling in love with what it could do for humanity. He decided to take that idea and run with it, expanding the blockchain to include the ability to execute smart contracts (little programs that could self-execute). Ethereum is technologically where the internet was in 1991, but the excitement and market enthusiasm is around 1998, causing a lot of market volatility. If you buy ETH, be very namaste if you are a daily price watcher like myself.
ETH will likely not penetrate mainstream consumer awareness for another couple years, but this will likely become the Internet 3.0. The world computer. As mentioned earlier, Ethereum executes smart contracts on it’s blockchain. So, for example, in Europe, a smart car like a zip car is housed at a recharge post, picked up by a consumer and checked out, then returned and checked back in. All of this is tracked and processed by Ethereum, all executed by smart contract, see: http://www.trustnodes.com/2017/04/29/germanys-energy-giant-launches-100s-ethereum-based-electric-cars-charging-stations.
Another great interview on Ethereum with co-founder, Joseph Lubin:
So basically, blockchains are giant ledgers that are transparent and rely on decentralization. They do away with “trusted third parties”. In our new paradigm, we will no longer need mortgage brokers, bankers, VISA…and for that matter, we will not need centralized corporations making money on our behalf like Amazon, Facebook or Spotify. Musicians will be able to upload their own music. Ethereum has a new network being built on it for movies and TV called SingularDTV. https://singulardtv.com
In closing, here is a tweet that I captured from Erik Voorhees who owns shapeshift.io, an exchange where crypto can be exchanged from one form to another, i.e. STEEM to Bitcoin. This is a new world and we are the lucky 1% to be a part of it.
Congratulations @blubeast! You have completed some achievement on Steemit and have been rewarded with new badge(s) :
Click on any badge to view your own Board of Honnor on SteemitBoard.
For more information about SteemitBoard, click here
If you no longer want to receive notifications, reply to this comment with the word
STOPBy upvoting this notification, you can help all Steemit users. Learn how here!
@blubeast I can not wait to see what future brings, but I am really concerned that bitcoin lost nearly 30% of its value in just two days, according to numbers from CoinMarketCap.
The entire crypto market had wild growth since January. This is actually a natural ebb and flow. But take a look at the market volume since May. It has grown exponentially. That means we have more people entering the market and moving money. It may be going into other coins, maybe they are just holding and not spending..hard to say. All I know is that the fiat debt ceiling is coming up in October and I do not want to be holding fiat predominantly at that time. Don't worry :) All will be well.
Excellent post brosef! Have an upvote!
Deep thanks.
I was just looking for a good steemit starter post on crypto, to ease a friend into it and stumbled onto yours. Great post, and love the tweet on the end - hilarious:-)
...still damn hard to understand....
Once Ethereum gets going, you won't even realize that you're using it. It will work in the background. Just know that it is possible for our future, through blockchain, to NOT be controlled by an elite 1% who decides when we go to war, who gets voted into office, what currency we will use. We will just live freely. Someday past yours and my lifetime.
...Ok, that sounds interesting. I need to give this some research time.