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

Read here

WHERE DO I BUY BITCOIN NOW?

Calm down, Coin Base is the biggest apps for this

iTunes

PlayStore

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;

Fiat Money

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

https://en.bitcoin.it/wiki/Main_Page

https://bitcoin.org/en/

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.