Updated: Oct 9, 2018
Have you heard about Bitcoin or cryptocurrency? I was skeptical the first time I ever heard about it. The second time a friend mentioned it, I decided that it was time to perform research and invest time and a little money. This is what I have learned so far:
What is cryptocurrency?
Cryptocurrency is digital or virtual currency that was designed to be a safe and affordable way to conduct transactions in the absence of traditional network systems. Some of us may not be ready to accept digital cash but the truth is our economy already has.
This futuristic cash was created utilizing cryptography (code or algorithms) this coded process securely stores all cryptocurrency on an encrypted strand of data. A technology called "Blockchain" this acts like a ledger which safely stores all transactions. The cryptography process actually stores every transaction that will ever be made by participants along with all balances. These transactions are confirmed by Miners who in term receive small amounts cryptocurrency for their work.
Miners maintain specialized computer equipment that utilize a high amounts of power to problem solve and confirm transactions. After a miner confirms a transaction it can never be reversed, it permanently remains on the ledger. Confirmation is a vital function that validates transactions as part of the Blockchain. Digital transactions are decentralized and allows for peer to peer or peer to business transfers and transactions without the need for a bank.
Types of cryptocurrency
There have been other attempts to create digital currency in the past and unfortunately, they failed without cryptography. The first successful non-tangible currency is called Bitcoin. This is often referred to as the parent coin or Shatoshi named after its elusive inventor (no one truly knows who this guy is). All other digital coins are alternative coins referred to as "altcoins". For an initial purchase one does have to exchange US currency for Bitcoin.
For now banks have not been totally eliminated from the process. To buy altcoins you have to purchase and exchange your Bitcoin for the altcoin(s) of your choice. Please note there are a few senior coins like Litecoin and Ethereum that can also be used to purchase altcoins.
Example: US currency : = amount Bitcoin
Bitcoin: = amount Litecoin or other Alt coin & Litecoin: = amount altcoin
Some cryptocurrency are labeled as tokens instead of coins. Tokens represent a coin creator or company asset. Tokens are pre-sold before a company goes public to fund future coin development. This advance sale is a potential investment opportunity called an Initial Coin Offering "ICO". Even before an ICO coin creator's develop a road map and presents its project objective, technology and financial details. The details are available in the form of fact sheets called Whitepaper. it is best practice to read this before deciding to invest in any coin. There are thousands of different types of coins. For the top 100 visit: https://coinmarketcap.com
Many companies and online businesses accept Bitcoin for payment including hotel and airline booking sites, online retailers, Amazon and soon Starbucks. Like all securities this currency is also subject to market capitalization in which the value is measured by multiplying the supply in circulation by the current price.
Steps to purchasing/exchanging crypto:
1) You need an exchange site with an online e-wallet:
E-Wallets are software programs that interface with Blockchain to store, send and transfer key codes that represent and secure cryptocurrency.
2) Next you will need to register and purchase fractions of Bitcoin/parent coin(s) or whole coins to fill your e-wallet.
To make an initial purchase/exchange for Bitcoin or senior coins you can use a checking account, debit, or PayPal and transfer any amount. You can get started with as much as you can afford and note there are exchange fees. During my initial debit purchase I was charged $3 for the purchase of $100 worth of Bitcoin. Be sure to read exchange rates and rules for each site. Also, fees differ with payment methods as well as processing times. Debit card purchases are immediate. As an added security measure secure key codes are generated and required to complete all e-wallet exchanges.
Here are a few exchange sites:
(Coinbase is one of the easiest exchange sites to navigate & it has low exchange fees)
(Low fees/ owned by Coinbase)
(Reduced fees if using Binance coin)
(No exchange fees)
*There are many other exchange sites so be sure to conduct research before exchanging money.
Cryptocurrency is being adopted by more people and retailers everyday. I believe it is here to stay although it may be governed differently in the future. Be sure to research individual coins further before deciding to invest and read my article "Claim Your Free Crypto: Cryptocurrency".