Blockchain and Cryptocurrencies
Unless you’ve been living in a cave, you must have heard about blockchain and cryptocurrencies. That said, hearing about something doesn’t necessarily mean understanding it properly.
Cryptocurrencies are fun, but also demanding to explore because they challenge the notion of what we’ve known so far to be true when it comes to money, payment policy, money/bank transfers, and so on.
However, once you gain a more in-depth understanding, blockchain and cryptocurrencies won’t appear so complex. What’s more, you may even end up buying some cryptocurrency too!
But first, let’s cover some basics and see what all this crypto fuss is about.
What Are Blockchain and Cryptocurrencies?
Crypto glossary may sound simple, but many find the deeper explanations behind it anything but simple. That said, they aren’t so complex either - it’s just that they require a bit of a technical approach, which is why we’ll use Investopedia to provide you with proper definitions of both blockchain and cryptocurrency.
a system of recording information in a way that makes it difficult or impossible to change, hack, or cheat the system.
A blockchain is essentially a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems on the blockchain. Each block in the chain contains a number of transactions, and every time a new transaction occurs on the blockchain, a record of that transaction is added to every participant’s ledger. The decentralised database managed by multiple participants is known as Distributed Ledger Technology (DLT).
On the other hand, a cryptocurrency has been defined as
a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks based on blockchain technology—a distributed ledger enforced by a disparate network of computers. A defining feature of cryptocurrencies is that they are generally not issued by any central authority, rendering them theoretically immune to government interference or manipulation.
Throughout our article, we’ll focus on both blockchain and cryptocurrency in greater detail, so things will become much clearer. Plus, it’s not only about understanding these two terms theoretically - it’s also about realizing how they apply into practice and real life, how people use them, and what their place in our society is.
Talking about cryptocurrencies is fun, but it’s always better to have some stats and facts along the way. So, below we share some useful statistics about cryptocurrency to boost your knowledge even more:
- It is alleged that every three seconds there’s a post about Bitcoin on the social media platforms.
- Bitcoin’s price has increased by 66% in February, 2021.
- As of February 22nd, Tether has become the biggest cryptocurrency with a $109 billion 24-hour volume.
- By March 2020, there was 6667 million new crypto malware.
- One Ether is said to be worth $15000.87 (this is as of February 25th, 2021).
- In 2020, Ethereum received around 1 million transactions on a daily basis.
- There are 18.6 million Bitcoins as of January 2021.
- The first real-life purchase using Bitcoin as a cryptocurrency was for two pizzas - it cost 10,000 BTC.
- As of 2021, there are more than 4000 cryptocurrencies.
- 65% of all the cryptocurrency users are said to be Bitcoin owners.
- Around 40% of the users cling onto the coins instead of selling them;
- 11% are said to use it for buying services/goods;
- It’s presumed 22% use it for lending;
- Bitcoin is responsible for $6 billion of all the online transactions which occur on a daily basis.
- By February 2021, it’s assumed there were 68 million wallet users.
- In the first quarter of 2021, Bitcoin’s daily transactions are said to have almost reached the 400,000 mark.
- 79% of the cryptocurrency owners based in the UK are said to have invested in Bitcoin.
- Nigeria was said to be the leading country when it comes to cryptocurrency ownership and usage, with 32% in 2020.
- By 2023, the global blockchain market is expected to rise to $23.3 billion.
- Crypto theft was down by nearly 60% in 2020.
Top 10 cryptocurrencies based on their market cap
We’ll wrap up this section by listing some of the top ten cryptocurrencies based on their market cap and current prices (please note this info is changing all the time, so use the link to make sure you’re always seeing the latest data):
- Bitcoin has a market cap of $722,098,627,845 and its current price is $38,697.11.
- Ethereum has a market cap of $324,121,993,318 and current price is $2,799.07.
- Cardano is said to have a market cap of $58,102,881,723 and its current price is $1.84.
- Binance Coin’s market cap is $63,385,541,252 and its current price is $417.06.
- Tether has a market cap of $61,714,898,927 and its current price is $1.
- Polkadot is assumed to have a market cap of $25,538,165,812 and its current price is $27.80.
- XRP has a market cap of $47,354,980,113 and its current price is $1.03.
- Chainlink’s market cap is $13,657,520,486 and its current price is $32.28.
- Litecoin is said to have a market cap of $12,642,143,529 and its current price is $191.51.
- Stellar’s market cap is $9,679,805,155 and its current price is $0.4233.
We explained what blockchain and cryptocurrencies are, but things don’t stop here. In fact, there’s so much classification, explanations, and details, that you may find yourself overwhelmed.
That said, besides understanding the basics regarding cryptocurrencies, it’s important to know the different types of cryptocurrencies and what each of them entails. Plus, it will help you understand that there’s so much more to cryptocurrency than just Bitcoin (although that’s the one we’ll start with).
Bitcoin is considered to be “the king of all cryptocurrencies”. It’s the leader, as it’s the first one of its kind. Bitcoin is striving to obtain a global status, and it’s more or less the most stable one out of all the cryptocurrencies out there. That makes it the most popular too. Plus, with a lot of companies being open to the idea of accepting Bitcoins as a means of payment, its popularity shouldn’t come as a surprise.
This cryptocurrency was invented in 2008 by an individual/group of people under the pseudonym Satoshi Nakamoto.
Bitcoin is decentralized, and it can be sent from one user to another one on the peer-to-peer bitcoin network without any mediation. All transactions that take place are verified using network nodes.
Bitcoin’s current price is $37,981.
LItecoin is yet another digital currency. When it comes to the technicalities, it’s more or less the same as Bitcoin.
That said, the Litecoin Network is said to process a block every 2.5. minutes (whereas Bitcoin does so in 10 minutes). This means Litcoin can confirm its translations faster than Bitcoin.
This digital currency was released in 2011 by Charlie Lee, a former Google employee.
Litecoin’s current price is: $188
Ethereum is an open-source blockchain, and it’s said to be one of the largest cryptocurrencies on the market (right after Bitcoin). It’s also the most actively used blockchain.
This digital currency is the first one to introduce smart contracts that enable developers to design both mobile and desktop decentralized apps which are powered by blockchain technology.
Vitalik Buterin, a Canadian-Russion programmer, is one of the co-founders of Ethereum. Ethereum was initially released in 2015, after being announced at a North American Bitcoin Conference back in 2014 in Miami.
Ethereum’s current price is: $2,765.
Cardano is a very affordable digital currency. It was released in 2015 by Charles Hoskinson, and it’s a public blockchain platform. It uses the Ouroboros proof-of-stake technology (Bitcoin uses a so-called proof-of-work system). This means that this currency comes with two blockchains rather than a single one.
This makes Cardano truly scalable.
An interesting fact about Cardano is that most of its investors are Japan-based. Thus, Cardano is referred to as the “Japanese Ethereum”.
Cardano’s current price today is: $1.7
5) Binance Coin
Binance was founded in 2017 by Chagpeng Zhao (known as CZ), a developer who used to engage in high frequency trading software.
It’s an ethereum-based (ERC) token which is used for trading cryptocurrencies and paying fees on the Binance exchange. This digital currency is a great option for individuals who wish to diversify their portfolios.
Users can also speed up their transaction processing through using an accelerator node (a special infrastructure), which is said to work together with the validator nodes.
Binance Coin’s current price is: $411
Dogecoin was created 7 years ago by Billy Markus and Jackson Palmer, software engineers, who were eager to develop a payment system that was different from the traditional baking fees.
Also, the name Dogecoin isn’t a mere coincidence. Its logo contains features of the Shiba Inu dog from the so-called “Doge meme” (hence the Dogecoin name).
It’s worth noting that Dogecoin popularly went over the roof once people such as Elon Musk started tweeting about it. Musk also stated that “fate loves irony. The most entertaining outcome and the most ironic outcome would be that Dogecoin becomes the currency of Earth in the future”. His SpaceX started accepting Dogecoins as a means of payment too.
It’s quite popular as a cryptocurrency transaction service among websites such as Twitch and Reddit.
Dogecoin’s current price is: $0.401.
TRON is a blockchain-based operating system. It was founded in 2017 by Justin Sun, a tech entrepreneur. It uses the proof-of-stake algorithms to process the transactions.
It’s worth mentioning that TRON is also an entertainment and content-sharing digital platform. It’s very influential and has quite a powerful team behind it.
TRON is also referred to as TRX. So far, it has established some big partnerships - such as the oBike one. oBike is one of the largest bike-sharing companies in Singapore. The company ended up launching its own token - oCoin, and the token was launched on TRON’s network. The company enables its users to earn oCoins simply by riding their oBikes.
Tron’s current price is: $0.078.
Zcash is a cryptocurrency which makes use of cryptography in order to provide users with enhanced privacy. This means it’s able to hide your financial history and offer a high level of confidentiality. Also, transactions are confirmed rather quickly, and there are low transaction fees.
It’s said to have a lot of similarities with Bitcoin.
Overall, Zcash is an open currency and you can send, receive, and/or spend using a phone, digital wallet, or a computer. It offers each person equal access.
The work on this cryptocurrency began back in 2013 by Matthew Green, a John Hopkins professor, and several of his students.
Zcash’s current price is: $305.40
- digital/virtual currencies;
- also referred to as simply crypto;
- different from the traditional financial system;
- said to have challenged the notion of money as we know it;
- secured by cryptography;
- decentralized networks (at least a lot of them are);
- digital assets;
- constantly developing and upgrading (for instance, Chia, a new cryptocurrency, claims to be eco-friendly);
- becoming more and more popular (this is why it’s important to get informed about the different types of crypto, which we already discussed);
- taken with a grain of salt and are faced with a lot of criticism (some blame them for making individuals prone to illegal activity and tax evasion);
- also praised (so, it’s not all about criticism) - they’re usually commended for their portability, divisibility, and inflation resistance, to name a few.
- embraced by everyone (in fact, a lot of people believe cryptocurrencies and blockchain technology have the power to disrupt the financial system);
- just Bitcoin;
- meant to completely put banks out of businesses (at least for now :))
- mainstream or used as much as people think they are (it’s worth mentioning that some countries have even banned Bitcoin such as: Kyrgyzstan, Bolivia, Bangladesh, Iran, Nepal, Thailand, India, Denmark, and Ecuador).
The History of Blockchain and Cryptocurrencies
Many connect the beginnings of crypto with the appearance of Bitcoin. And while Bitcoin is indeed the first decentralized cryptocurrency which came out in 2009, it’s also worth mentioning certain events prior to it.
Namely, in 1983 David Chaum, an American cryptographer, devised ecash, an anonymous cryptographic electronic system. This made digital currencies untraceable by the government, the issuing bank, or third parties.
In 1996, the National Security Agency (NSA) published a paper: How to Make a Mint: the Cryptography of Anonymous Electronic Cash, in which a cryptocurrency system was described.
Then, Wei Dai, a computer engineer, published a description in 1988 describing “b-money” (explained as an anonymous and distributed electronic system).
Now, after the appearance of Bitcoin, a lot of other cryptocurrencies (which we already listed) and developments followed.
For instance, crypto ATMs started appearing, more and more websites and stores started accepting cryptocurrencies as payment, and people engaged in crypto trading. In general, it seems as though now society has a greater trust in this new form of payment.
And while a lot of it may have started with Bitcoin, things have progressed beyond it. No one knows what the future holds for cryptocurrencies, but one thing is for sure - a lot of people will be interested in knowing.
Why Are Blockchain and Cryptocurrencies Important?
Blockchain and cryptocurrencies may be intimidating for many - either because they still haven’t tried them, or because they don’t fully understand their purpose. But those who have had the chance to engage in them can probably understand why they matter and what makes them special.
First of all, cryptocurrencies are significant because they show the current baking system is not the only option there is. It also shows us how strong cryptography is, as it provides secure transactions and very fast transfer of digital assets.
Cryptocurrencies reinforce our independence. In other words, we can do stuff from the comfort of our home without depending upon fixed bank hours, bank employees, and so on.
Of course, even the traditional bank system has moved a lot of things online, but we’re still very much dependent upon “strict” bank rules and regulations. With crypto, freedom is much more accessible and tangible.
We go deeper about the importance of crypto in our FAQ section, where we dwell on the advantages that crypto provides users with. That said, we do mention some common disadvantages too.
Ultimately, blockchain and cryptocurrencies show us that a new, fresh approach to payment is much more than just necessary. It might very well be the future. Or as many argue: it already is the future.
How To Create Cryptocurrencies?
We know most of you reading this article are probably interested in learning more about crypto from a potential user point of view, and not a creator one. In other words, you’ll likely engage in crypto trading and crypto investing, rather than actually creating a cryptocurrency.
Still, to satisfy the requirements of our article, we’ll briefly walk you through the steps of creating your very own cryptocurrency:
1) Pick a Consensus Mechanism
Consensus mechanisms refer to specific protocols which periecve transactions as legitimate or not, and then add to the block.
2) Choose a Blockchain Platform
The blockchain platform you’ll choose will depend on the consensus mechanisms you have settled on previously. If you want to pick one of the top platforms, consider one of the following:
- IBM Blockchain;
- Chain Core;
- and Hyperledger Fabric.
3) Focus on Node Design
You need to focus on the way your blockchain and nodes function. In other words, you need to design the nodes based on your needs. For example, are the permissions going to be public or strictly private? Is the hosting going to be on-premises or on the cloud? Perhaps both options are in play?
4) Pay Attention To the Blochain’s Internal Design
You need to take into account even the smallest details before you end up launching your blockchain. Otherwise, you won’t be able to make changes to certain parameters once your blockchain is up and running.
5) Integrate the APIs
API is an acronym for Application Programming Interface, and while not all platforms provide pre-built APIs, it’s good to ensure yours will. In case it doesn’t, here are several such blockchain API providers: Tierion, Bitcore, Colu, BlockCypher, ChromaWay, and Gem.
6) Interface Design
It doesn’t matter what crypto innovation you create if you neglect the interface design. Your FTP servers, databases, web, and the likes need to be top-notch and you need to pay attention to future upgrades when it comes to both front-end and back-end programming.
7) Legalize Your Cryptocurrency
Finally, you need to ensure your crypto complies with the international crypto regulations. In this way, you not only protect yourself and your crypto, but you also ensure there are no unlikely surprises for your potential crypto users too.
Examples of Cryptocurrencies in Everyday Life
You probably never thought you could pay your bills using cryptocurrency, but you absolutely can!
You can use cryptocurrencies to pay a wide range of bills such as:
- phone bills
- electricity bills
- gas bills
- credit card bills
- rent bills
- tax bills
- gym memberships
- car insurance
- home insurance
- health insurance
For instance, there are more than 45,000 companies registered on billpayforcoins.com which accept some type of cryptocurrency to pay your bills.
In general, you can use various cryptocurrency bill payment platforms, or pay your bills directly to your biller. If you’re using Bitcoin, you may use a Bitcoin debit card too.
That said, before you decide to pay any of your bills using a cryptocurrency, make sure you’re informed about both the advantages and disadvantages of this process.
First and foremost, paying your bills in such a manner is very easy to do and quite efficient. This is what makes it so convenient. Also, it allows you to use your cryptocurrencies in “the real world”. Finally, a lot of people think they can only use Bitcoin for such payments - in fact, as we mentioned, you can use a wide range of cryptocurrencies for this purpose.
However, it’s worth mentioning that this process comes with certain fees. In other words, there will always be some extra cost you need to consider with such services, so make sure you’re aware of it in advance.
What’s more, getting your money back may not always work in the same way as with “traditional payment”. If a biller says they haven't received your payment and/or they have another issue with it, you may struggle to resolve this issue.
Finally, not all bills are eligible for such payment, so make sure you get informed and know the type of bills you’re allowed to pay using crypto.
If you check out Coinatmradar, you can find the closest ATM which converts cash into crypto. You’ll also find out that there are currently:
- 19878 crypto ATMs;
- 276310 other services;
- 71 countries this applies to;
- 41 producers;
- and 594 operators.
But even if you’re not that into numbers, it’s enough to know there are more than 70 countries that accept this! Using such maps (or getting information elsewhere) only shows you how easy it has become to convert your crypto into cash at proper ATMs.
Also, don’t forget about actually buying crypto at a properly designed machine. For instance, Bitcoin ATMs allow you to purchase bitcoins and/or other cryptocurrencies with deposited cash.
That said, crypto ATMs are all about convenience and the right location. In fact, these two are their main advantages. As George Mac, KELTA’s CEO, stated:
Location is everything. A crypto ATM should be installed where a lot of potential investors pass. We chose the River Park multifunctional complex in Bratislava – it includes shops, restaurants, a 5-star hotel, and luxury apartments. At the same time, the spot offers complete privacy: nobody should be able to stand behind your shoulder and see what you're doing. With our upcoming ATMs, we'll pursue the same strategy, choosing locations that are both exclusive and intimate but at the same time offer easy access.
Many online stores are accepting cryptocurrencies because many people are willing to use them to pay for their online purchases. There’s not a definitive list of online stores and websites that accept such payments, plus you need to know which currency is accepted.
For example, here’s a list of some of the top online stores which accept Bitcoin:
- Planet Express;
- Reeds Jewelers;
- Start Jets International;
- Norwegian Air;
- More Stamps Global;
- Garbarino Viajes;
Finally, if you wish to see which physical shops accept crypto payment, head over to coinmap.org and find out.
Crypto Debit Cards
Crypto debit cards are similar to the conventional ones in the sense that they enable you to fulfil your daily transactions using your preferred cryptocurrency.
That said, they differ from the traditional cards in the way we spend our digital assets. In essence, we need to top up our crypto debit cards first with our preferred digital currency, and once the cards are loaded, you can start purchasing (both in-store and online).
Some crypto debit card providers have the tendency to provide their users with two card types: one for online buying, and another one for in-store purchases.
There are many crypto debit cards to choose from. Also, some are more suitable for a certain type of purchases, whereas others are better for different types.
Bitwala Debit Card
For instance, the Bitwala debit card is the best option for travelers. It provides users with free cash withdrawal globally, and enables you to make contactless payments. It’s also very easy to simply trade your coins into euros and have the funds ready for when you need them.
This card also includes a 3D secure feature, which is a private code that adds an additional security layer when you’re buying online.
Cryptopay Debit Card
The Cryptopay debit card is great for everyday use. It has two options for those who wish to maximize their purchasing experience. So, you can use a plastic card which is accepted at all Visa locations. You can also engage in ATM withdrawals and just spend your cryptos; or you can get a virtual card for online usage and larger purchases.
The card also contains an overdraft protection, which means you shouldn't worry about overdraft fees. Also, Cryptopay’s advanced system allows you to easily convert your cryptos into the supported currencies such as EU, GBP, and USD.
Wirex Debit Card
The Wirex debit card is a great option for those wanting to benefit from its unique Cryptoback™ rewards program, which allows you to earn 1.5% in Bitcoin each time you pay in shops, bars, restaurants, and/or on transport. Then, you can convert and spend all the bitcoins you’ve received through the program.
The Wirex debit card supports over 150 currencies and it’s accepted at more than 61 million locations.
Binance Debit Card
The Binance debit card is capable of doing everything your conventional card can, but at zero fees. The card is free, and there are no administrative fees. That said, some third party fees might occur.
Binance allegedly promises up to 8% cashback on all purchases made with its Visa card. There are high security levels too.
The BitPay mastercard is a card that allows you to instantaneously reload your credit card without any conversion fees. You can use the card across a wide range of locations worldwide, and you can freely withdraw cash from compatible ATMs. BitPay also has an EMV chip which provides high security, and there are several options to control your spending, and even lock your card if necessary.
The BitPay card allows you up to three withdrawals per day, and they should exceed $2,000. The card doesn't come with any monthly and conversion fees, but you do have to pay a $5 inactivity fee (per month) after ninety days without any transaction.
You can also check your balance, request a new PIN, and even convert your crypto into giat currency by using the BitPay app. In order to get this app, all you need to do is download it, load your wallet, and then order your card.
CoinZoom Visa Card
The CoinZoom visa debit card enables you to convert crypto into fiat with the speed of light. Also, you can spend your cryptos at any location which accepts contactless, PIN and/or chip Visa payments. This card also provides users with Preferred, Gold, Platinum, and Black VIP options. This will depend on the ZOOM tokens you have.
BlockCard Visa Debit Card
When this card says zero crypto transaction fees, then it really means zero transaction fees. Indeed, you won’t pay a thing, regardless of whether you’re transferring crypto, making a deposit, or exchanging fiat currency.
If you deposit Bitcoins into your BlockCard account you can use them in places that accept Apple Pay, Samsung Pay, and Google Pay.
Nexo Debit Card
This card secures your digital funds through its 256-bit encryption which also contains a 24/7 monitoring mechanism. This ensures the safety of your transactions and funds. You can order your Nexo debit card using the Nexo Wallet app.
The Nexo Wallet app allows you to make free virtual cards for online purchases, monitor your transactions, and get notifications about your transactions. It enables you to freeze and unfreeze your card too.
Coinbase Debit Card
We see this debit card as the best option for direct spending. In essence, the card allows you to spend money directly from the Coinbase account without you moving your funds to your other bank accounts. Your cryptocurrency gets converted to dollars before completing your various purchases and/or ATM withdrawals.
You can also earn rewards through what you spend on a daily basis - for instance, one option is to earn 4% back in Stellar Lumens, and the other one is 1% back in Bitcoins.
Finally, the Coinbase application enables you to properly manage all your rewards preferences and organize your spending too.
TenX Debit Card
Once their application is approved, TenX provides its users with a virtual Visa card. You can use this card at locations where Visa is accepted. Cryptos are converted to fiat money very easily, and the 24/7 security card only further reinforces the card’s commitment to its users.
You can also lock and unlock your card, and a 2-factor authentication is added for extra security.
Monolith Visa Debit Card
The Monolith Visa debit card is a type of crypto card which works well within the Ethereum ecosystem. This is so because all of its crypto tokens that are being supported are, in fact, part of that Ethereum ecosystem.
That said, the card itself has its own token, the so-called TKN token. You can use it to waive some fees when you use the card.
Also, if you download the Monolith app, you get updates about your transactions. There are also daily spending limits which prevent your crypto funds from being stolen.
All in all, cryptocards are very beneficial because they allow you to switch between currencies (as we discussed, you can easily access both your crypto currencies as well as fiat money), eliminate card costs (whenever possible), and enjoy high security standards (most cards really make their best to provide high security measures for their users in order to protect their digital funds).
Earning Passive Income
Crypto allows you to earn passive income too, and below are some of the most common ways to approach this:
Mining is probably the oldest method of gaining passive income. In simple words, mining refers to the process of collecting cryptocurrency as a type of reward for the work that you may have completed.
Staking is very similar to mining - it usually involves keeping your funds in an adequate wallet and engaging in different network functions (for instance, validating transactions) in order to receive staking rewards.
Staking is a great way of boosting your crypto assets with almost minimal efforts.
Lending refers to the process of you lending crypto funds to other borrowers, and by doing so you earn interest. It’s an alternative investment form, and the whole point is that you’ll probably end up getting more crypto than you’ve initially lent.
In other words, you earn profit without having to actually do something proactively.
Certain crypto platforms have the tendency to reward thier users if they manage to attract new ones onto their platform. These may come in the form of affiliate links, some form of discount codes, and/or referrals.
A masternode is very similar to a server, but it runs within a decentralized network and has different functions and much more specialized permissions from the rest of the nodes.
Explaining masternodes in greater detail may be a bit complicated, but here are the basics behind it: when you run a masternode, you’re essentially aiding in securing the network. At the same time, you provide services to the blockchain network. Hence, in return you receive compensation in the form of a reward. So, when a new block becomes part of the blockchain, the masternode receives some percentage of the block reward.
How to approach this?
- Why do you need cryptocurrency? Are you interested in exploring them as an individual or you’re part of an organization?
- How do you keep yourself informed about the latest crypto developments? What sources do you consider reliable? Are there people you see as “crypto experts”?
- Do you have some doubts and/or reservations when it comes to investing in crypto? Why? What are they? How can you make up your mind? What are some risks for individuals when they start engaging in crypto trading?
- Do you have a preferred digital currency? Why?
- Do you think Bitocin is overrated and there are other cryptocurrencies worth exploring? If yes, how do you know? What made you conclude that?
- Do you really think crypto is the future, as many claim? Do you think it can completely eradicate the traditional form of money or can both co-exist? Why? Why not?
- According to you, what are the main benefits of having crypto?
- In what way are cryptocurrencies superior to traditional money (if at all)? Also, do you think the traditional finance system may experience some sort of decline due to the rapid development of cryptocurrencies? Can this be stopped?
- Do you think one needs to have a certain amount of experience before engaging in crypto trading? If yes, how can they get that type of experience?
- If there’s a sudden ban on all cryptocurrencies, what will the consequences be?
- How can you calculate your gains or losses when you pay for services/goods using virtual currency?
- Can crypto become mainstream?
- How likely do you think it is for new cryptocurrencies to emerge in the near future? Do you think they’ll be a huge threat to the already existing ones (especially leaders such as Bitcoin)?
- If you already have some experience using cryptocurrencies, what will you advise beginners? What are some challenges they need to look out for? How can they make sure they’re using crypto in a risk-free manner? What was confusing for you when you were starting out?
Famous Quotes About Blockchain and Cryptocurrencies
“Incorporating cryptocurrency in the traditional centralized financial system not only speeds up transactions exponentially, but also it makes the system more user-friendly, whereas in a decentralized system cryptocurrency will only breed insecurity and chaos, due to the utter absence of liability.”
“The divine line "Bitcoin/Cryptocurrency is for criminals" is a cunning defensive strategy created by so-called traditional financial services sector.”
“Cryptocurrency is here to stay, so we hear on cryptosphere everyday. But there are some fundamental situations that needs to take place for this speculated ‘store of value’ to really have its foot to stand on, and that is, government’s ability to enforce taxation on businesses and individuals making gains with this currency. So, either we like it or not, crypto taxation needs to be enforced for government to really entertain any form of adoption. Asian countries dominates the cryptocurrency spaces but the governments are finding it a bit hard to really tax crypto transactions.”
“By 2030, some form of Crypto will become the global reserve currency but it will not be based on what exists today. Existing cryptos need to transform or will disappear. Also around 2030 or so, the first Nobel Prize in Economics will be awarded to a Cryptoeconomist.”
“Cryptography shifts the balance of power from those with a monopoly on violence to those who comprehend mathematics and security design.”
“The governments of the world have spent hundreds and hundreds of trillions of dollars bailing out a decaying, dickensian, outmoded system called banking when the solution to the future of finance is peer-to-peer. It’s going to be alternative currencies like Bitcoin and it’s not actually going to be a banking system as we had before 2008.”
“Gold is a great way to preserve wealth, but it is hard to move around. You do need some kind of alternative and Bitcoin fits the bill. I’m not surprised to see that happening.”
“Cryptography is the essential building block of independence for organizations on the Internet, just like armies are the essential building blocks of states because otherwise one state just takes over another.”
“The bitcoin world is this new ecosystem where it doesn’t cost that much to start a new Bitcoin company, it doesn’t cost much to start owning Bitcoin either, and it is a much more efficient way of moving money around the world.”
“When I first heard about Bitcoin, I thought it was impossible. How can you have a purely digital currency? Can’t I just copy your hard drive and have your bitcoins? I didn’t understand how that could be done, and then I looked into it and it was brilliant.”
Frequently Asked Questions (FAQ)
What are the advantages and disadvantages of cryptocurrencies?
One of the most important advantages of using crypto is the technology behind them - the blockchain technology. This makes crypto independent from any form of authority, meaning there’s no one to dictate any strict rules that users have to comply with.
Crypto allows you to make unlimited transactions and send them right away to anyone, whereas fiat money translations take time to be processed (you might even end up waiting several days to receive money depending on the type of transaction). Crypto transactions require very low transaction fees as well.
A lot of people like the anonymity and the high security that comes with crypto.
Crypto has its disadvantages too. For instance, they’re not accepted everywhere across the world, so this may cause trouble depending on where you’re located on the type of payment you wish to make.
Also, transactions with crypto are non-reversible. You may send a request for a refund, but if you get rejected, there’s no way to retrieve your funds back.
Another thing is that many users end up forgetting their private keys which means they can’t access their digital funds. This means kissing your assets goodbye. And while such things may happen, it’s worth considering whether you’re willing to accept such a risk.
What are the best places to buy Bitcoin?
Coinbase is a great place to start if you have no idea where else to go, what you should look for, and in general - if you’re new to the concept of Bitcoin and cryptocurrency. Coinbase supports most of the popular cryptocurrencies, and it’s said to offer high security levels. This security is due to its two-factor authentication, its Coinbase vaults, as well as the offline storage it provides.
Allegedly, there are more than 56 million verified users on Coinbase.
On the whole, when we talk about Coinbase, we're definitely talking about a “leader” in the sense that it’s a very large wallet provider, and it’s present in more than 100 countries. Its fees are relatively reasonable, but there are higher fees for debit card transactions.
BlockFi is a great option for those who want to earn interest when you decide to deposit your Bitcoin into an account. It allows you to buy and sell bitcoins and some other cryptocurrencies without any extra trading fees.
That said, BlockFi has loan interest rates, and they can be as high as 9.75%. This is what usually makes people reluctant to use it. It has no added fees for the cryptocurrency trades though. Plus, it allows you to use your bitcoin as collateral for loans in U.S. dollars.
BlockFi has a rewards credit card which pays you in Bitcoin. This just shows you how much it is committed to progress and innovation.
We recommend Bisq for those who have at least some experience with cryptocurrency. It has decentralized features, which enhance Bitcoin buyers’/sellers’ anonymity and privacy via an open-source desktop application.
Also, no identity verification or registration is required. That said, it’s not very ideal for active traders and it has the potential for slower transactions as well. This may be a deal breaker for some.
However, it’s the anonymity option that draws users in. Bisq can support several payment methods such as Western Union, Popmoney, Zelle, Chase QuickPay, and even bank transfers. Its trade fees are between 0.05% - 0.70% (depending on how you pay and what you’re planning on doing).
Robinhood is a great choice for those who wish to enjoy commission-free Bitcoin trades. In other words, there’s no commission to both buying and selling Bitcoins. As a platform, Robinhood resembles stock trading quite a bit.
Those who have some prior experience with stock market investing will find using Robinhood a piece of cake. So, if you’re relatively new to Bitcoin, but familiar with the concept, you’ll likely get the hang of it quite fast.
It has a rather short list of currencies it supports, though. Also, it doesn’t provide the option to withdraw Bitcoins to a crypto wallet.
CoinMama is known for offering instant Bitcoin purchases (plus a wide range of payment alternatives). Your bitcoins or other cryptocurrency can be developed to any crypto wallet. There’s a fairly quick account setup, but some users may find its fee structure rather complex.
Also, there’s an extra 5% fee for the instant deliveries. CoinMama doesn’t provide any support for ACH bank transfers for USD. ACH transfers are used for moving money electronically between accounts at distinct banks (hopefully this may be changed in the future).
That said, if you have no problem with the fees, and have a debit/credit card, you can buy bitoins pretty much instantaneously.
eToro is the perfect option for beginners because it has a very user-friendly platform. It also provides practice accounts that allow you to test our Bitocin purchasing without you having to risk any real money. These free accounts come with $100,000 in virtual money. Once you get comfortable enough (and knowledge for that matter), you can engage in real live trading using your real funds.
eToro is also known for its copy-trading system which enables users to learn from the other ones.
One of its disadvantages is that there’s a 0.75% spread fee for Bitcoin purchases and there are even higher fees for the other cryptocurrencies.
All in all, eToro does not only offer a great Bitocin buying experience, but it provides users with a learning experience too.
Is there a dark side to blockchain and cryptocurrencies?
There are many individuals who are sceptical about using blockchain and cryptocurrencies. And it shouldn't come as a surprise. After all, they’re not so mainstream (yet).
There’s still a huge lack of market regulations to start with, so it’s understandable why some may have certain reservations about it. Even governments and financial instructions have some doubts about it. And it’s precisely this lack of regulations that provides fertile ground for dark trading. Hence, many see cryptocurrencies as being susceptible to “financial chaos”.
Also, many link crypto with power inefficiency. For instance, mining bitcoins in India takes almost INR 180000 worth of electricity. Many believe that unless there’s some form of renewable source energy, this simply isn’t worth it.
What they have to say...
According to Abhijit Naskar “Blockchain itself is not dangerous, but if we start using decentralized blockchain as a complete substitute for our traditional transaction methods, then I am afraid, it would destroy the very human foundation of our financial system.”
Olawale Daniel stresses that many do not know how to implement cryptocurrency properly (which may prove to be an issue later on):
Several business sectors, companies in healthcare, financial services, agriculture, as well as other entrepreneurs and solopreneurs are rushing to adopt the blockchain technology and secure their financial transactions to provide a clear record book among individuals with the digital coin’s technology, “cryptocurrency.” Meanwhile, many of these businesses are doing so basically because of the fear of being left behind (FOMO), without having crystal understanding about the basics of blockchain technology and how it should be applied to optimize their business performances.
Finally, Warren Buffet thinks that people should “stay away from it. It’s a mirage, basically. In terms of cryptocurrencies, generally, I can say almost with certainty that they will come to a bad ending.”
Suggestions for Further Reading
Reading about cryptocurrencies can always get you more insight into the matter than relying on assumptions and unreliable information. There’s always a lot of controversy and disputes about this topic, so you’d be better off reading much more “credible” material.
That said, reading what some cryptocurrency experts have written about the subject doesn’t necessarily mean you shouldn’t question their motifs, opinions, and claims. We always encourage critical thinking!
So, here are our reading suggestions:
- The Age of Cryptocurrency: How Bitcoin and the Blockchain Are Challenging the Global Economic Order, by Michael Casey and Paul Vigna
- Blockchain Bubble or Revolution: The Future of Bitcoin, Blockchains, and Cryptocurrencies, by Aditya Agashe, Neel Mehta, and Parth Detroja
- Mastering Blockchain: A deep dive into distributed ledgers, consensus protocols, smart contracts, DApps, cryptocurrencies, Ethereum, and more, by Imran Bashir
- Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business, and the World, by Alex Tapscott and Don Tapscott
- The Basics of Bitcoins and Blockchains: An Introduction to Cryptocurrencies and the Technology that Powers Them, by Antony Lewis
- The Crypto Trader: How anyone can make money trading Bitcoin and other cryptocurrencies, by Glen Goodman
- Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond, by Chris Burniske and Jack Tatar
- Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money, by Nathaniel Popper
- Bitcoin and Cryptocurrency Technologies: A Comprehensive Introduction, by Arvind Narayanan, Steven Goldfeder, Joseph Bonneau, Edward Felten, and Andrew Miller
- The Truth Machine: The Blockchain and the Future of Everything, by Michael Casey and Paul Vigna
- The Everything Guide to Investing in Cryptocurrency: From Bitcoin to Ripple, the Safe and Secure Way to Buy, Trade, and Mine Digital Currencies, by Ryan Derousseau
- Digital Cash: The Unknown History of the Anarchists, Utopians, and Technologists Who Created Cryptocurrency, by Finn Brunton
For those of you who identify more with watching stuff rather than reading about them, here’s a list of documentaries/films about cryptocurrency:
The Rise and Rise of Bitcoin (2014)
The Bitcoin Phenomenon (2014)
Life on Bitcoin (2014)
Bitcoin: The End of Money as we know it (2015)
Banking on Bitcoin (2016)
Bitcoin Heist (2016)
Magic Money: The Bitcoin Revolution (2017)
The Blockchain And Us (2017)
Trust Machine: The Story of Blockchain (2018)
Crypto Rush (2020)
Cryptopia: Bitcoin, Blockchains and the Future of the Internet (2020)
All in all, learning about blockchain and cryptocurrencies, and their importance along with their implications matters because as many say - cryptocurrencies have been around for a while and they’re probably here to stay.
Regardless of whether this ends up being true or not, getting further informed wouldn’t hurt. In other words, it will help you understand the concept behind it even more, rather than you relying on other people’s experiences, thoughts, and advice.
With that said, we invite you to take a look at our brand new online course about blockchain and cryptocurrencies, and deepen your knowledge. Or if you’re an absolute beginner, we’d love to guide you into the world of cryptocurrencies!
Joining us means you’ll get to learn all about:
- history of payment methods and the complexity of payment processes;
- public and private keys;
- ethereum and smart contracts;
- international credit regulation;
- mining and currency supply;
- storage of cryptocurrencies;
- digital signatures and hash value;
- blockchain ethics, and much more!
Finally, Olawale Daniel said: “Buy small units/bits of Bitcoin a day to keep poverty away.” And while we can’t persuade you or force you to buy Bitcoin (or any other cryptocurrency for that matter), we’ll give you enough information so that you can decide on your own.
Ready to explore the world of blockchain and cryptocurrencies with us?
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