Cryptocurrency has profound social, economic, legal, and philosophical implications. I love a good revolution, and this one can return honor to the money supply; it's a very exciting time to be alive!
I'm going to tell you everything I know about cryptocurrency. As I'm relatively new, it's not a lot, but hopefully this can serve someone else just beginning their research. It's hugely fascinating, and I'm hooked! I invite more information - please teach me more, senseis!
Math and tech skills and a strong sense of humor are super helpful but not required to unravel the mysteries of crypto. I am not mathy or techy, but I'm clever AF and it gets me by very well.
There are tons of cryptocurrencies out there: this site tracks 3555. According to the ads on this site, people interested in crypto are also very interested in boobs, so I couldn't resist a voluptuous thumbnail photo for clickbait!
Most important of all the cryptos is Steem*, which builds on and improves Bitcoin technology.
Bitcoin (BTC) was invented in 2008 by Satoshi Nakamoto (a pseudonym for someone who remains anonymous). He wrote and published a white paper online that declared bitcoin into existence, and POOF! life got better.
They thought this guy was Nakamoto; he denies it.
Bitcoins are created by individuals running open-source software on super powerful computers to solve mathematical equations. Correct solutions are rewarded with a bitcoin. The supply is capped at 21 million, and as more and more bitcoin are "unlocked", the mining rewards decrease.
This is global, decentralized money - there is no ultimate authority that sets value, interest rates, or other parameters. That's huge, as it totally bypasses the Federal Reserve (which is 100% privately owned, FYI) and other central banks. There is a high degree of anonymity, accounts can't be frozen or blocked, and political volatility is removed.
According to The Rise and Rise of Bitcoin (watch it here on Youtube - it's pretty cool), it sat around for awhile essentially worthless, until some people got excited about it. Notably, when Bank of America, Mastercard, Visa, Paypal, and Western Union blocked payments to Wikileaks for publishing classified documents from the US government, Julian Assange's team began to accept Bitcoin as an alternative for donations towards exposing the truth. By the power of economics, people's interest in it gave it value, and the price has gone through the roof--and crashed--many times since then.
When it began, 1300 BTC were worth $1. Today, 1 BTC = $743.
There has been both political support and resistance towards virtual currency, and that's a rich topic in itself.
Bitcoin runs on the blockchain. The "blockchain" is an open accounting ledger that records every BTC transaction in the history of eternity. It is an ethereal and immutable place in the cosmos, held together somewhere in the digital realm by mathemagicians and beautiful women. It is an invincible force in that it can't be altered or destroyed and will exist forever. There are internet and computery things that make it go, and it runs on coffee. Every computer on the network can see every other computer on the network. It is open-source, meaning the code is public and anyone can add their amendments to it.
Steemit is built on it, and thus concludes my knowledge of the blockchain.
It may save us all, plus we can all hold hands!
When you succumb to the seduction of the cryptocurrency, you'll want to trade everything you have for it. When that happens, you have to take your assets to a marketplace to make that exchange. These are some "shops" to go to for transactions:
- Bitshares - Includes other financial services. Thanks @dantheman!
- Blocktrades - You don't have to make an account to use this. Thanks @blocktrades!
- Poloniex - I have used this to trade SBD for BTC. Thanks @poloniex, whoever you are!
- Coinbase - The US government wants access to their user data.
There are many, many more. Just like in real life, you want to do business with a trustworthy and reliable entity. I'm in no position to give advice on any of them; I have yet to research the pros and cons of each.
The account/file where you store your crypto is called a wallet. Hot wallets are linked to the internet; cold wallets are not.
Assets stored online are at risk of cyber attack. The only fully secure option to protect from hackers is to store cryptocurrency in a computer that has never been connected to the internet - such a file is called a "cold wallet" (either paper, hardware, or software wallet). This link tells you how to generate a cold wallet.
Human brilliance, innovation, and technological advances over the last decade or so have improved transaction times, trading volume, and security for cryptocurrency. People created upgraded platforms for buying, trading, holding, and paying with Bitcoin, and the economy is bigger than ever - current market cap is almost $12 billion!! The next biggest cryptocurrency, Ethereum, has market cap of about $750 million, according to https://coinmarketcap.com/.
A FEW OTHER COINS
- Lebowskis (!!!)
- Viva coin by @williambanks - ICO (initial coin offering) launched on Steemit!
- Tatiana Coin created by singer/songwriter @tatianamoroz (She also created a most helpful series of tutorials with Stephanie Murphy. Watch them on Youtube here!)
Steemit is a hugely important evolution for cryptocurrency! This is the platform that can lead to mass adoption, because it makes virtual money exciting and accessible. Plus I'm told Steemit is way faster than Bitcoin or Ethereum!
So here we are, all together on Steemit, and there are some important aspects of this economy. (For a super beginner's guide to Steemit, @gardenofeden wrote a nice reference for getting started from square one.)
The brains at Steemit, Inc created a cryptocurrency called STEEM that is divided in 3 parts:
- Steem - volatile tokens intended to be held short term; can be converted to SP via powering up or SBD
- Steem Power (SP) - shares/vests
- Steem Dollars (SMD/SBD**) - pegged to the USD
then they gave us a censorship resistant social media platform where we can earn it by blogging. Post/curation rewards are paid out in some combination of these 3 elements. It's brilliance! For someone like me, it's incentive to learn more about and get involved with crypto.
Here's the white paper. Some parts are already outdated: powering down can now be done in 13 weeks instead of 104, and inflation is drastically reduced.
Some fine Steemians have written some helpful articles about buying into Steemit and trading STEEM for other cryptocurrencies including BTC, and from there you can exchange it to any fiat currency you support:
- How to send Steem Dollars from Steemit to Bittrex exchange by @blocktalk
- How to Transfer STEEM From Poloniex to Steemit.com [GUIDE] by @cryptos
- How to convert your SteemDollars (SBD) To Cash (USD) + transfer it into your Bank Account! by @blueorgy
- [TUTORIAL] How to transfer steem from a wallet/exchange to steemit by @mrkuujo
I'm sure there are many great articles out there; these are a few I bookmarked from my early days here.
Obviously, there's plenty more to address, and I have plenty more to learn. Please share your wisdom with me, and I will pay it forward!
*you may accept this as irrefutable fact if you wish
**I thought SBD was the acronym for Steem dollars and have used it extensively, but according to the white paper the correct acronym is SMD. Poloniex calls it SBD.