Lots of words we don't understand okay. Now decentralized
meaning it takes the traditional model of central banking in the US. The
Federal Reserve is responsible for printing money.
Now Bitcoin was created by Satoshi, Nakamoto. Which is a
pseudo name for someone. Who we don't know who this person is which makes it
even more elusive and weird and creepy in crypto.
But I don't even know who invented the dollar. I could
google that and find out. But whatever, the point is this guy or girl created
this system as a response to the financial crisis in 2007 and 2008.
But if I was the owner of the Federal Reserve, I personally would print money for myself my friends and my family. I'm just saying let's be real. So there are pros and cons with having our centralized an extreme example of Power, that's miss used is Zimbabwe. The reserve was printing lots and lots of dollar bills son and their currency lost its value. The medium of exchange was valueless. You couldn't use money to buy groceries. They printed a trillion dollar Banknote that had zero value. so currently Zimbabwe uses the USD.
I believe the use of South African Rand. They use everything
but their own dollar. They don't have a currency because that's how the value
just completely dropped. An extreme case of hyper hyper inflation.
And you can watch documentaries on Netflix, “Banking on
Bitcoin” is a good one. Capitalism: A love story by Michael Moore is a good one.
It doesn't talk about cryptocurrency but it does talk about the financial
crisis.
Now supply and demand is a thing in economy. When you keep
on printing money and there's no end, how can you store value in that exchange?
With cryptocurrency, there is a fixed supply. There is a
market cap on how many coins can circulate in the market and that is 21 million.
That's the most in theory that can ever be Generated in the system. Beyond it
being a fixed market cap system that in theory creates value. There's only 21
million collect all 21 special edition coins.
It relies on Blockchain technology. Now blockchain
technology is what has blown the minds of everyone in the space. With
blockchain it is recording transactions and verifying and ensuring that that in
fact happened. That you got this money from this person and this money went
there.
With blockchain it
can't be duplicated, it can't be counterfeit. It can't be double spent.
Everything is accounted for and verified and that takes a lot of time to
process. So the act of verifying these transactions is time consuming with
Bitcoin.
So they are now considering Bitcoin, instead of a currency
that they hope to use in the system day to day. It's now considered a commodity
like gold.
Are you still with me?
Bitcoin is the popular cryptocurrency, but there are other
cryptocurrencies out there. And they are referred to as alt coins. Alternative
coins besides the Bitcoin. Now there is a Ethereum. There is Lite coin. There
is ripple. There is OMG there is Monero there's Neo. There are a ton of coins
out there.
Your job is to research the tech behind it, and you could
read the white papers which is basically a document that the creator has listed
what the purpose of the Technology is and does, but nobody really reads that.
Well the beginners I doubt will, but you know what you should actually just
read it just for some giggles.
Right now we're in the very early stages of cryptocurrency. It
isn't widely adopted yet.
The idea is Cryptocurrency will be the new currency and
we're gonna shift from what we use today USD, Canadian, Euro, Pound, Pesos.
We're gonna shift from that system to the crypto system.
This system is referred to as fiat. Not the car. Fiat the
money, and we're going to shift to the cryptocurrency system.
The only Place I've seen accept cryptocurrency actually
there are a few there's a Lamborghini store that accepts Bitcoin. Monero is
another currency out there. And on the news Mariah Carey, G eazy and a few
other Musicians were saying that they would be accepting Monero. So I went to
their site to try to purchase.
But I'm trying to wrap my head around ok, so if all these
currencies are out there. Which one is gonna be the one that wins and that's
the biggest question. We don't know. The system that we use today is very long
for me to send money home to Toronto.
Not only does it take a couple days for the wire transfer to
clear? Because there's banks between. There's the US Bank. There's the Canadian
bank, and then there's the actual banks, so there's like four banks in the
whole process.
The idea is cryptocurrency eliminates all of those banks,
and I can send money to my family right away without the fees and without the
delay.
That isn't the case right now because in order to convert your
current currency, your fiat currency into cryptocurrency you need to use an
exchange.
Now this exchange to me defeats the whole point of decentralized
networks because now it is centralized. Coinbase which is a very popular app I
use coinbase is an exchange place where I can convert my US funds into Lite
coin Bitcoin, Ethereum, Bitcoin cash. They're gonna be adding more. But that
process took me a week to convert my U.S. Funds to crypto funds.
Coinbase is the easiest place to exchange your fiat for
crypto. However, there are other exchanges out there and also depending on the
country. You might have another exchange that's more popular.
Most exchanges that have affordable cryptocurrency under
$100. I'm talking a dollar, five, ten dollars, they only accept Bitcoin or
Ethereum, not your typical cash/fiat currency.
So you have to do two steps: The first step you have to
exchange your fiat currency at the exchange for Bitcoin or Ethereum. The second
step you have to exchange that Bitcoin or Ethereum that you just acquired for
the more affordable currency that you really want to get. But now you have to
back up your information onto a cryptocurrency wallet.
Cryptocurrency Wallet
Now a wallet is Not like a traditional hard wallet, although
they do sell hardware wallets that you can store your information on it. But
it's software that stores your private keys.It sounds crazy, I know.
But you need your own personal wallet to store your
information, because of this exchange goes bankrupt and closes you still have
your Blockchain, your private keys, your information on this wallet.
So I've taken a small amount of money that I'm okay with
losing. And I've already tripled that. It can become very addictive, so I do
say put in what you're willing to lose and no more than 10%.
But it in investing in the whole game of cryptocurrency.
It's blown my mind and opened my wealth of knowledge into a space I was never
really paying too much attention to money. What is it besides getting paid by
the hour or paying bills like how to build wealth.
And I don't come from
a family that has stocks invested to pay for my college or whatever the case
is, buy me a new car, I have to buy my stuff with the money that I earn.
I'd like to hope that cryptocurrency right now. It's kind of
like stocks. It's investing in something that may or may not materialize, the
difference is stocks are regulated.
But I do this because you could still lose it. But it's way
more secure because it's been around that much longer. With cryptocurrency this
hasn't been around that long and even more unsettling is it is not regulated. So it is going to a casino and playing your
hand at the table. But it's fun and that's exciting and if I can learn and grow.
I'm just way more aware of money, and now when I'm in stores.
And then when I'm talking to like my friends we talk in Satoshi's and in coins
like that is like 0.0067 of a Bitcoin.
the way to do that is to Invest you can even put in $10 $50.
You can put in $10 into a Bitcoin. I'm trying to invest in something to believe
and like. I wanted to grow over the course of a few years, so ideally you know
in five to ten years. I can have my
money that grew, I want my money to work for me. Okay, and I I don't want to I
want to hustle, but I'm gonna hustle smarter. And I feel like cryptocurrency is
an opportunity to do that.
No comments:
Post a Comment