The Newbie’s Guide To Bitcoin and the Cryptocurrency Market
Summary: What even is cryptocurrency? Some kind of dog coins and bits of coins or something. I don’t know so if you don’t either, we can find out together because this episode is the newbie’s guide to the cryptocurrency market.<br> What is Cryptocurrency?<br> Money has been around for <a href="https://www.listenmoneymatters.com/dolla-dolla-bills-yall/">thousands of years</a> and now there is a new form of money on the scene.<br> A cryptocurrency is a form of digital money. It uses cryptography to create secure, digital transactions that are in theory, anonymous. That’s why it’s the preferred medium of payment when buying illegal things like drugs on the dark web. <a href="https://www.listenmoneymatters.com/go/coinbase/">BitCoin</a> was the first cryptocurrency, created in 2009 and is the most well-known.<br> How The Cryptocurrency Market Works<br> Cryptocurrency is a decentralized currency network. Users can pay for things with anonymity and without the need for a bank. The currency is generated by “mining.” A computer solves extremely complex math problems to generate the coins.<br> Once the coins are mined, they can be stored in digital wallets and sent from one wallet to another.<br> <br> Blockchains<br> Cryptocurrency is decentralized; there is no governing body tasked with its oversite. But the payments have to be secured in some way. Otherwise, it’s too risky for either side of buy/sell equation to rely on. The security comes from the blockchain, a ledger of each transaction.<br> Each transaction is received by a mining node, and it puts each one into a block, each block contains all the transactions that have happened in the last ten minute period. Each transaction uses encrypted validation to link to the next one forming a continuous chain.<br> It takes an enormous amount of energy for a computer to confirm each transaction by solving a very complex math equation. That expenditure is the proof that the transaction has been validated.<br> Why would anyone want to spend so much time and energy doing this? Because it’s very, very lucrative! The reward for mining a block is 12.5 BitCoins, and currently, one coin is worth $6,007.01so a miner makes $75,087.63.<br> Thinking about mining? It’s not a hobbyist pursuit. You would spend way more on the kind of computer and the amount of electricity required to mine than you would make back. People pool resources to mine and then split the proceeds kind of like a lottery pool.<br> The Purpose of Cryptocurrency<br> Why do people use cryptocurrency? We already have a well-established currency system in place.<br> It’s very secure. <a href="https://www.listenmoneymatters.com/go/coinbase/">Cryptocurrency</a> can’t be counterfeited and once sent, the transaction cannot be reversed like you can stop payment on a check or request a chargeback like you can with a credit card payment.<br> You are not risking all of the coins in your wallet when you make a payment, only the amount you send can be pulled from your account. When you use a credit or debit card to make a purchase, the entire amount of your credit limit on that card or all of the money in your bank account can be fraudulently charged.<br> The fees to use BitCoin are low compared to other forms of payment. The fees are set by time. If you want your transaction to be verified in 10 minutes, the fee is currently $2.09, it’s the same for 30 minutes and the fee for 60 minutes is $1.64. You can see how this is appealing to those sending large sums; senders aren’t charged on a percentage of the amount being sent as you are with many conventional transactions.<br> No bank account is required to use cryptocurrency, only an internet connection. Many people in the world do not have or have access to a bank account for a variety of reasons, so cryptocurrency is an alternative open to them.<br>
