- Bitcoin - I got SCAMMED For $10,000
- Cryptocurrency Blacklist
- “Do you remember back in 1994 when someone was trying to explain the world wide web to you?”
- How to easily scam somone out of cryptocurrency
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- Is Cryptocurrency a Scam?
- What is Cryptocurrency?
I’m new to cryptocurrency. What in the world is this Bitcoin I’ve been hearing about? Is it a Ponzi scheme? Is it legitimate or will it go the way of the VHS and cassette tapes?
Bitcoin - I got SCAMMED For $10,000
Hey, it’s okay, I still have some as well. In fact, my daughter tells me that mixtapes are making a comeback.
It’s important to keep in mind that a lot of really smart people in the crypto community have taken a lot of complicated tech terms and made them even more difficult to understand. At Learn Crypto Investing (LCI), I’m all about keeping it simple.
For that reason, I’ve created a “cheat sheet” of common crypto terms you will hear. I recommend that you keep this list open in your browser so that you can refer back to it at any time.
To do so, just click HERE.
People often ask me what cryptocurrency really is and I usually respond with this question:
“Do you remember back in 1994 when someone was trying to explain the world wide web to you?”
Back then it was tough to explain and really grasp the concept.
Crypto is similar.
How to easily scam somone out of cryptocurrency
What the internet did for information, crypto has the chance to do for transactions.
Okay, the whole idea for cryptocurrency was conceived in January 2009 (on the heels of the U.S. economic collapse) when a genious named Satoshi Nakamotoran a complex cryptographic algorithm (a really complex math problem, like way harder than that college calculus class in which you were thrilled to walk away with a “D”).
This resulted in him mining (creating) the first Bitcoins.
His goal was to create a better way of conducting financial transactions and eliminating governmental manipulation of money.
To this very day, there’s quite a debate about who the pseudonymous Satoshi actually is. Some people have claimed to be him, but no one has actually shown credible proof.
It’s believed that he has over 1 million bitcoins, so that makes him the quietest, richest guy in the galaxy. There are also theories out there that believe that Satoshi is a group of developers. Either way, you’ll see references to Satoshi sprinkled everywhere throughout the world of crypto.
Anyway, a few programmers and techies dabbled in it and eventually someone thought it would be cool to buy some pizza using BTC (the ticker symbol for Bitcoin).
On May 22, 2010, a dude in Florida traded 10,000 bitcoins (BTC) to a British guy for a couple of pizzas from Papa Johns. At today’s BTC value of around $7,500 (USD) per BTC, that makes it the most expensive pizza ever bought at around $75 million USD! At the time that amount of BTC was only worth about $40.
Bitcoin uses something called “open source” which is a decentralized development model that encourages open collaboration.
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Open source is used in almost every industry from software to beer to pharmaceutical companies. This helps moves things along quicker (think Wikipedia).
A cryptocurrency (also referred to as digital or virtual currency) relies on cryptography (a fancy way for saying the study of techniques for secure communication). Even Julius Caesar was using these techniques back in his day. This is used for chaining together digital signatures of token transfers.
This is accomplished by peer-to-peer networking. That simply means that everyone involved has equal access and there is no centralized administrative system.
Think Napster the old music file sharing site.
One of the biggest advantages to cryptocurrency is decentralization. Who can forget the financial crisis of 2007?
I was laid off during the great recession and I’m sure many can relate to that as well. Did you know that centralized regulation required banks to make loans to people they knew wouldn’t be able to afford them? Well, we all know how that ended.
No one government or corporation can control cryptocurrency.
This means that the federal reserve can’t step in and do another round of quantitative easing like it does with the USD. That’s when they attempt to manipulate the dollar by lowering interest rates and increasing the money supply.
This can’t happen in crypto due to their decentralized nature.
All transaction data is permanently recorded in files called blocks.
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The ongoing master accounting ledger for all transactions is called the blockchain. Each block of verified transactions get added to the end of the chain for everyone in the world to see. A block gets added to the chain about once every ten minutes. Every transaction has to be verified a number of times (typically 6) in a block.
The reason for this is to make fraudulent transactions impossible. The verification process is done by miners who are happy to check each other’s work since they receive a fee for each transaction. As more miners verify a transaction, it gets exponentially harder to cheat the system.
In fact, after just a handful of approvals, there currently isn’t enough hashing power in the world that would be needed to hijack and create a new, fake chain. If only it was that hard to produce fake news!
While Bitcoin itself can’t be hacked or reproduced, there are many hackers out there who have stolen Bitcoin from other people or exchanges. Incidents like the 2014 Mt. Gox theft of 750,000 Bitcoins made headlines and tarnished crypto as a whole.
In May 2017 the infamous WannaCry hackers took over people’s computers and held them ransom for Bitcoin.
Why did many people not pay up even though the hackers wanted a relatively small amount from each victim? Because they said Bitcoin is too hard to understand!
It’s stories like those that inspired me to start learncryptoinvesting.com as a place where people could learn more in an easy to understand format.
Another advantage is that more and more merchants and countries are starting to accept it worldwide as a mainstream type of currency.
In countries like Japan and the Czech Republic, it is now being treated like fiat currency. A fiat currency is legal tender whose value is backed by the government that issued it.
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The U.S./Canadian/Australian dollar, the Euro and Peso are all examples of fiat currencies.
Merchants and exchanges who accept Bitcoin as payment can set their own threshold as to how many blocks are required until funds are considered confirmed.
This eliminates double-spending that happens often with credit card transactions. If you’ve ever had to call your credit card company to reverse a charge you know it can be a cumbersome process.
If your head is hurting right now, believe me, I understand.
Let’s do a quick recap.
- A cryptocurrency is a type of digital currency. The name crypto is used because it is relies on the cryptography technique of solving crazy hard math problems
- Decentralization – no one group or person can control or manipulate it
- Security – there isn’t one centralized area to hack into
- Acceptability – more merchants are accepting it worldwide everyday
- Bitcoin is the most popular and valued the highest, but there are some serious competitors out there now like Bitcoin Cash,Ethereum, Ripple and Litecoin
- There are over 1,500 different cryptocurrencies in circulation and a lot of them are nearly worthless
We’ll get more into the number of currencies and coins out there later.
To view a list of all of them, Coin Market Cap is a great resource. As a general rule of thumb, you’ll want to focus on the top 20 coins by market cap as they most likely have the highest chance of remaining relevant and increasing in value.
While doing this on your own can be daunting, I will show you how easy it is to setup a secure digital wallet.
Is Cryptocurrency a Scam?
That is what enables you to buy and sell cryptos online. For example, you can buy Bitcoin (BTC) and then sell it later for U.S.
dollars. Or you can exchange Bitcoin for another crypto like Ethereum (ETH). It’s quick and easy once you learn how to do it.
What is Cryptocurrency?
My favorite part is that unlike the stock market, the crypto market NEVER closes.
When you are ready to learn how to buy Bitcoin, clickhere. (Don’t worry, clicking this doesn’t sign you up for anything, it simply takes you to another article where I will go into further details.)
Keep in mind, I always encourage you to start off with a small amount that you are comfortable investing.
Trading and investing in digital assets like Bitcoin and other altcoins is highly speculative and comes with many risks.
This analysis is for informational purposes only and should not be considered investment advice. Past performance is not necessarily indicative of future results.