Cryptocurrency for Newbies - What is It, And Why Should I Care?

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Crypto, or cryptocurrency to give it its full name, is basically money, not very different from the paper money you use daily. There are many different cryptocurrencies, just as there are many different fiat currencies, those which have been issued by governments or central banks. Fiat means "Let it be." No, I don't understand it, either, so let's just move on.

The ideas behind crypto began in 1998, and there were a number of proof of concept experiments over the next ten years. In 2009 was born the bitcoin; you've probably heard of it. It was the first decentralized cryptocurrency. It is credited to Satoshi Nakamoto, a pseudonym for an as yet unidentified mathematician. Many have followed, largely based on the bitcoin.

Cryptocurrency is "mined," usually by solving complex mathematical problems. Basically, the miner turns electricity into electronic coins, from which I believe he or she gets a cut. The transactions are recorded on a "blockchain." As best I can figure it, the blockchain is a database with a huge level of redundancy, so that if one part becomes corrupted it can be removed or rewritten. If you understand raid, Redundant Array of Inexpensive Drives, you sort of understand the concept of a blockchain. If not, you'll have to wait until I learn more.

Should you become a miner? Probably not. Mining for profit requires a special computer with very expensive graphics cards. A good mining rig can cost up to $10,000. The electricity to power that rig is not insignificant. Those graphics cards are hungry and there are a lot of them. If you would like to try mining on a small scale, just for fun, theunmentionables' own @bwar wrote a wonderful article which will get you going. You can find it here: The World’s Saddest Little Mining Rig and it's not sad at all!

"Okay, so if I'm not going to mine crypto, how do I get me some?" I hear you ask. The easiest way is to buy it. It will take a little while to get set up initially, but it's not difficult, and once you are set up it's easy to conduct transactions. First, you need to sign up with an exchange, so you can create a wallet. An exchange is like a bank, but for crypto, and a wallet is like a bank account.

The exchange I use is Coinbase. I like them, but there are other good exchanges available. See the links at the bottom for help choosing one. Now, I said wallet, but if you are going to deal in multiple currencies you will have multiple wallets, each with its own address (account number.)

My bitcoin address, in case you have a couple of bitcoins looking for a new home, is 1GJQsJpGHfd5Hew51U2mJVnex9AhVSSnCC - you can deposit into that address, but you can't withdraw. As far as I know, there is no way to withdraw from a wallet, I would have to deposit from my wallet to your address -- your account number. Even if I'm wrong about that, I do know that having my bitcoin address does not give you access to my bitcoins. It is one-way traffic.

Having obtained cryptocurrency, whether you mined it, bought it, or were paid or gifted it, you might want to do something with it. You can send it to a friend or your ne'erdowell nephew who's stranded in Madrid and needs a bus ticket to Amsterdam. You'll need to ensure they can accept your crypto; your exchange will exchange your 40,000 Coinnobodybutyouhaseverheardof into something more suitable, assuming that your exchange deals with Coinnobodybutyouhaseverheardof.

You can buy drugs on the darknet. I'm not going to explain that, and I really don't recommend it. I'm just saying it's an option. You can pay for services. Or, and this is where it really gets interesting for me, you can buy goods from an increasing number of online stores. The one I plan to test this on first is newegg. For shopping you will almost certainly need bitcoins, so save yourself time by doing the exchange first.

In 2016 an interesting new method was devised for mining. It still relies on turning electrical energy into currency, but instead of that energy being consumed by powerful computers solving problems it is consumed by thousands of bloggers posting articles and comments. The blockchain, in this case, is maintained by special, elected bloggers called witnesses. Each witness has a computer with a copy of the transactions. The currency is Steem, and the blog site is steemit.com. Maybe you've heard of it?

So, now that you are a miner, what use is it? Well, if you are a good writer/artist/poet/photographer/technical guru, and if you are patient, and if you can interact well with your fellow Steemians, you can actually get paid for writing. How that works is the subject of many articles; I'm going to skip the details.

There are many articles on Steemit about all aspects of crypto, and many of them are good. One of the best external sites is 99bitcoins. Here is the link to help you choose an exchange, and here is a list of online stores which accept bitcoins.

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