22 December 2017
Happy Mother’s day mom, here is A bitcoin
Who wants a return of more than 100% weekly?
-At least that was offered by bitcoin up to this point
25,000% Return on Bitcoin Hedgefund managed since 2013
WHERE DO I BUY BITCOIN NOW?
Calm down, Coin Base is the biggest apps for this
Check this full guidance on choosing exchanges and more how to. Here!
HOW DO I DO IT?
Here’s how [Although you might need to have deep pocket to buy 1 now (reached $17,000 by December, when this post was made it is around $14,000)]
Example on setting up account on Coinbase. This link
Although the gain is alluring, let’s answer these questions first
IS IT THE TRUE VALUE?
IS IT SAFE? Security, hacks and on
Further below is money, crypto-currency and bitcoin, what’s on
I am too, trying to understand what’s the buzz and the fuzz of this promising new investment
What is Bitcoin?
Simple explanation with infographic from CNN. Link
It’s a cryptocurrency, created by a man named Satoshi Nakamoto; a fictional name really
Before we got woo-ed and wow-ed by the new thing, I’d like to go to my understanding about media of exchange; a favorite of all, money
What is money?
By definition: “Something generally accepted as a medium of exchange, a measure of value, or a means of payment”
((4 basic functions: unit of account, store of value, medium of exchange and standard of deferred payments))
Long ago, after people started to do barter, they created something to store value. The first type is called commodity money, e.g. gold. The value is stored and backed by the price of the goods. Money value equals gold value.
Later they evolved to have;
It is valuable down to a promise given by government
How could you be sure that $3 can buy you a hot dog? Why can this paper be valuable?
It was issued by a central bank (The Fed) of US government; this paper (bank notes) was promised by the US government can be exchanged to hot dog or anything else, the buyer and seller across USA believes and accepts the value of it
A little bits of personal note:
It was created to be a generally accepted value of exchange with “trust” as its value
Because we believe that it has value, then it becomes valuable (if that makes sense)
Back to crypto-currency
Wait, what is currency?
Currency is a form of money, usually backed by the government. Basically different types of money, you could have US currency (USD), Indonesia (Rupiah), Korea (Won) and more.
Yet, Bitcoin is also a currency
Crypto-currency is a digital asset as medium of exchange and using cryptography (secret code) to secure its transactions
Bitcoin was made as an open-source and it needed people to mine (re:produce) Bitcoin. Bitcoin is produced by calculations (right calculations presented, you get bitcoin). More to technicality below
Bitcoin is the first decentralized crypto-currency, as no government issued them, no power house could rule the value except for the society who owns them.
Then who backed Bitcoin?
Security that was made through the recorded transactions using block-chain method among peers that owns bit coin. No one holds too much power to its production or distribution
PURPOSE on Bitcoin
Society will decide the value of bitcoin, it’s going to be accepted people in Cuba, France or Ethiopia, without exchanging currency and we need to pay for it.
Currently we are paying money to get money in another currency, we pay money just to transfer, transactions fees are everywhere, even obtaining records of transactions, we have to pay for it, that’s what makes circulation of money expensive, something bitcoin wants to reduce.
We pay banks to record society’s transactions, bitcoin is here to disrupt with no cost of recording transactions.
Government guarantees our money, bitcoin presents to a decentralization, to put power and transparency in our society, transferable in no time, stored safely within e-wallet accounts and low transaction fees, with a system (block-chain) that guarantees bitcoin’s transactions.
WHERE CAN I SPEND MY BITCOIN?
This is the main reason bitcoin was created, he wanted it to be a new alternatives and more stable value to proceed transactions
Buying burgers and nuggets at MC Donald, apparently.
Tour, tickets, electronics
From Expedia.com (tour booking agency online) , Microsoft (our beloved operating system) , Virgin Galactic(phone and airlines) , Overstock.com (lower price of goods due to overstocking!) , Newegg (electronic things) , eGifter (We do love gift cards) , Zynga (who does not play?)
but no longer can buy online games at Steam. Read the story here
How Bitcoin works? A little technical snippets,
Bitcoin is build up on a “block-chain” system, the same as email and apps using “internet” network system
Currency produced by creating new ledger/block containing bitcoin with a fix amount (21 millions) and time (by year 2140); compare to ordinary money, government can print as much as they want
Only 2016 coins produced every 2 weeks
Thus, it also controls the flow (fix flow)
How’s this safe:
Connecting & transparent ledgers (blocks) will verify each other in every transaction
To record transactions, it needed network to record and confirm through nodes for block to be created
Block is a permanent transaction records that could not be modified or changed, once one block is completed (linked with help of miners to validate block), a new block is created and miners get bit coin rewards
Blocks after blocks are made; thus making it a block chain
On the other hand, as it is anonymous for the person (who only owns a wallet to keep bitcoin) and untraceable, it could be used for illegal buying; one of them is Silk Road (illegal drugs), DO NOT PROCEED
Bit Coin Mining?
Full explanation here
Miners: the person who owns super computer to find new block
It’s made by proof of work to achieve a target (where Hash< Target value)
It takes a long time and rigorous attempt with a processor
One of the factor has random value; it can decentralized distribution
They are being rewarded by the bitcoin produces by the new block, halves every 210, 000
The value of exchange into money, goods and services derived from the bitcoin community (whoever accepted bitcoin)
Security, HACKS and on
Safety is another thing to consider. A relatively new system has been introduced to the world, a breakthrough system to oh-good-old financial system
It does not yet prevent scammers to take advantage of this. So, before buying bitcoin, better to study about the exchange and e-wallet you will be using.
You could have all sort of fraud; fake bitcoin exchanges, fake wallets, phishing scams and Ponzi claimed (to double bitcoin, etc)
Choose a safe bitcoin exchange as it could be hacked and filed for bankruptcy as what happens to Youbit, a Korean exchange. Read the story Youbit
Here is the tips
Bitcoin guidance on fraud from bitcoin community, link
We can conclude that the transaction is safe, protecting lines of exchange, yet Bitcoin can be stolen from its pool. It could trapped users to give their personal account information to take bitcoins or it could goes inside the exchange and emptied all the wallets inside, etc.
Who is this genius Founder?
Yet to be found, this person has become one of the most mysterious puzzle in our time.
There are some speculations about him,
Elon Musk, yet he denied
Nick Szabo, he wrote something similar before bitcoin era. You can also read his blog posts in Unenumerated
Craig Steven Wright controversial, this was a scam made up. Story
Dr. Vili Lehdonvirta and Irish student Michael Clear
Neal King, Vladimir Oksman and Charles
Long story short this guy who proposed a paper suggested Bitcoin as early as 2008 and fully disappeared by 2011
IS IT THE TRUE VALUE? Have we earned it?
Record of its volatility (here) and how you could not blindly believed that the price is the true value. The real value would appear if demand is pure from people who wants to guard the network, use bitcoin as it was purposedly made for
I was rather skeptical a week ago, about how the future of this unproven currency could survive.
I am convinced as per now, Bitcoin price is in a bubble. People buy them for speculation, because they want as they believed the value will go up and more. They have not using up to its potential where bitcoin was meant to be a reliable source to do exchange. We need some time until digital currency could be accepted by general population and all sorts of businesses, yet I am positive about this. It was still volatile but it will reach its true value.
Bitcoin and another currency will be a success if it has been delivered its initial objective by serving as a generally accepted transactions and be a value of investment, not just a price-hike mainly caused by speculators.
Emotions and news more too often drives people mad and follow the trend, yet rationality is what we need to win the game
Now I started to believe at a point in time, all of us might have bits of bitcoin, or another crypto-currency in our e-wallet to buy juice down the corner.
Should we buy it now? Bitcoin or bitcoin cash?
If you want to get closer to the community
In August in order to increase number of transactions can be recorded inside a block, bitcoin community launches BitCoin Cash; hard fork currency of bitcoin (derivative), new branch (separate) of block chain that does not linked or valid to the old block-chain or previous software.
Next up is ICO
Open for feedback and comments on this piece
Disclaimer: I am nowhere near a professional financial advisor nor a tech gig; learning to be, though.