A Bitcoin and Crypto Primer: Part 2
January 8, 2018, 8:51 am

Read Part 1

So you have a vague idea of what Bitcoin and other Cryptocurrencies are. So now you want to buy some, but how?

What is an exchange?

Exchanges are the place to go to do one of two things. You can either place an order into or out of your fiat currency (government issued currencies), or you can trade cryptos between each other. Exchanges are the stock market of crypto.

Whereas Cryptocurrency creation and use is unregulated in the best way, exchanges are unregulated in the worst way. The exchanges are where trades happen, prices change, and the incredible volatility of Bitcoin is birthed. I'm sure that you've read or heard that Bitcoin is a volatile, speculative, market. And you're right, but not because of bitcoin itself. It is because on the crypto exchanges, the price is always moving. Because there is no regulation for these exchanges, sometimes big players can come in and splash the pot around, and sometimes a million average joes come in and make weird moves.

But exchanges are also the only way to move from currency to currency at the moment. So they are a necessary evil. Anyone can become a miner, and begin to slowly accrue a small amount of many coins. But for most people, the way to get in to crypto is to buy on an exchange.

What exchange should I use?

This question largely deals with personal need, personal use, and availability. There are quite a number of exchanges out there. There are whole sites dedicated to just listing exchanges. But generally, you might want to do those two main things, move fiat in and out, or exchange between cryptos. Actually, you'll probably find those two tasks happen on different exchanges.

Fair warning, many of the upcoming links are referral links. Sign up for what you want, and don't just take my word for it. Honestly, it's so hard to give suggestions to people without feeling a tiny bit responsible for their money. I'm honestly just trying to help, and if you sign up with these links, you help me back.

CoinBase.com is a major US exchange for USD to crypto. It has an easy interface, a nice design, and you can exchange USD for a few common cryptos. A couple things to know about this market; it takes about a week for any USD transfer to finalize on the exchange, so don't be surprised when you can't make any other moves for a while. Just hold tight and wait it out. Gdax.com is the more proper exchange for those coins, once you've purchased some from CoinBase. They are two sides of the same company.

Binance.com is a Chinese based exchange that is one of the most popular for trading a large amount of different cryptocurrencies between each other. As of this writing, Binance has limited new signups to random times throughout the day. Binance has a very good App on both iOS and Android, although because of the a number of things, you have to download their app directly and allow it as a trusted developer. It's up to you to make or not make this decision, but understand that a little trust is the price to pay for getting into these unregulated markets.

Kucoin.com is an exchange that looks nearly identically skinned from binance on their website, but their app is different in a number of ways and this exchange has different coins available.

Cryptopia.co.nz is a very large exchange with a huge amount of coins for trading, but they don't have a mobile app, and they are quite complicated as a starting point.

Gemini.com is another option for fiat conversion, but they can be quite slow in their approval process.

Which Crypto Coins should I buy?

I mean, this is definitely not a question with a good answer. Most people's first intro to this space is the coinbase interface, and upon opening that app, you'll be greeted, currently, by four different coins. Bitcoin, Bcash, Ethereum, and Litecoin. Which coin you want to buy is entirely up to you. Most investors would say that the key to long term success is diversification. So perhaps a small amount into each, or a couple, would be a good place to start.

Do I have to buy a whole Bitcoin?

Not at all. Bitcoins, and other cryptocurrencies can be broken down into smaller increments, just like dollars can be broken into cents. 1.0 BTC is one Bitcoin. 0.0001 BTC is one Bit. 0.00000001 BTC is known as one Satoshi. That's four and eight digits to the right of the decimal place.

Now some exchanges do require a minimum amount of exchange between any particular currency, often times equaling out to at least 10 USD worth. But you don't have to spend 15,000 USD to get into cryptocurrency. You can spend 100 USD to purchase about 0.006 BTC. You don't have to purchase in terms of whole coins, you can purchase in terms of initial investment.

To be continued....

Part 1

If you would like to tip me some Bitcoins, you can use this address.


A Bitcoin and Crypto Primer: Part 1
January 6, 2018, 10:11 am

So. Last year around this time, I went nuts for 3D Printing. I mean I bought and constructed about seven 3D Printers. I love it, and I learned a lot.

This year I've gone full bore into Cryptocurrency, and I would like to impart some knowledge onto anyone who reads this.

First off, let's get one thing straight. You may call them all bitcoins if you want, but there are a number of cryptocurrencies now, and you don't want to be your grandma calling all game systems Nintendos. Bitcoin is one of and the first cryptocurrency. It is also currently the most expensive of the cryptos. But what is its worth?

What is Bitcoin worth?

This is perhaps the most wrong question new people ask. As of this writing BTC (the identifier for bitcoins) are worth different things in a lot of different places. Bitcoin is a pure currency, like dollars. What are dollars worth? Nothing. That bill that you hold is worth nothing, except what someone is willing to trade it for. It's not worth anything in gold, or anything else, inherently.

Dollars don't have a value in gold. Dollars are worth nothing. Gold is worth something in Dollars, not the other way around. Dollars are worth nothing except your own trust in a system.

So what are Bitcoins and other Cryptocurrencies worth? Bitcoin can be given a worth in Dollars, because it can be traded into dollars, but it can also be given a worth in apples, a worth in Ethereum, a worth in Euro, and a worth in drugs. It is a currency in the purest sense. The difference is that although your Dollar responds only to your trust in the system, Bitcoin is built around a technology called the Blockchain.

What is the Blockchain?

The blockchain is a digital, decentralized ledger of every Bitcoin transaction that has ever occured. So imagine that you were a bank, and you wanted to accept a check. You would need to talk to the new bank and make sure that that check actually came from the other bank, that it actually belonged to that customer, and that there was actually a worth denoted by the check. At that point, that worth could transfer from one bank to the other.

Now imagine that instead of needing to communicate with a bank, you could just pull 6 random people off the street and tell them you wanted to move money to a new location. What if everyone was their own bank all hooked into the same ledger. Imagine that you would say you wanted to move money somewhere, and everyone knew the original location. If 6 people all were checking around the ledger that day, and they all confirmed that the money from the original location was legit, then the money would go through, and everyone's ledger would update with value in a new location.

That is an overly simplified description of the blockchain, but it's good enough for these purposes. The blockchain is a virtual decentralized guarantee that the amount of currency you say you're transferring came from somewhere and is the amount you said it was.

So how does Bitcoin mining work?

Not all cryptocurrencies are based on the same technology, and some of them have utility beyond their worth as a currency. Bitcoin mining is the way that the ledger is proved. Anyone can become a miner and it serves two purposes.

One, when Bitcoin was first proposed, in order to not allow anyone to be able to fully control it, not all of the coins were produced at once. Coins can be mined by solving complex mathematical problems. As these problems are solved, new coins are unearthed at certain stages. Everyone mining improves the distance for everyone else toward the next coin, but only the last person gets the coin. Everyone chips away at a gold mine, until only one person gets the nugget. This system actually encourages miners to pool their resources and then share the spoils if a coin is unearthed.

Two, as miners mine, they also are the ones proving transactions. When bitcoin transactions are occuring they get passed to miners for approval before being confirmed in the core ledger. Every transaction also incurs a small fee, and these fees are then passed on to the miners to encourage the act of mining beyond the possibility of finding whole Bitcoins, and indeed the time after all Bitcoins have been mined.

How many Cryptocurrencies are there?

Lots. Hundreds, bordering on thousands.

So isn't that bad? Sort of. Not really. Think about it this way, most countries have their own currency. Wouldn't it be better if all countries, indeed all peoples, used the same currency? Possibly, but that's not happening. Although any country can issue its own currency, it doesn't mean anyone will use it.

Likewise, although anyone can create a currency based on a doge, it doesn't mean anyone will use it for anything other than collecting and trading. These days there are not just different Cryptocurrencies, but there are even different underlying technologies. Many of these currencies are based on what's called a fork of the original Bitcoin documentation. They took what Bitcoin was, and made their own version. Some of them even took the same ledger as Bitcoin at the time, and gave everyone who had some Bitcoin some of their new altcoin.

Part 2

If you would like to tip me some Bitcoins, you can use this address.


The Landscape Ahead
January 4, 2018, 8:34 am

What seems like ages ago, one of my first crypto purchases was litecoin. I liked litecoin, and I liked that it was cheap.

When I started trading coins, litecoin was the first one I traded, cuz it was a pawn. It was the nuthin coin. I traded like 1 whole litecoin for like a million of a coin called TRX. An even trashier coin. Because, in my mind, I wanted to have a lot of a coin. It was worth 17 SAT at the time, or in other words 0.00000017 of a bitcoin. It was worth nothing, but that's why I bought it. I just wanted a lot of coins. I wanted to jingle some pennies.

TRX just passed litecoin in marketcap today. That's insane. We used to use the term big 3 to refer to Bitcoin, Ethereum, and Litecoin. But I'm not certain we can use those terms anymore. The whole landscape of crypto has drastically changed in the last 2 weeks, much less the last two months.

TRX has a lot of coins in circulation. Way more than BTC. This means it's worth can only go so high. But it's market cap actually still has quite a ways to go. I'm on the ride though. On this trash coin that I thought would go no where. It might go all the way.

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