Sofia Lambrou
Jan 24, 2018 · 10 min read

If you are having a hard time wrapping your head around either what a Blockchain is or how to start investing in cryptocurrencies this article is for you.

As Bernard Marr highlights it in one of its recent articles in Forbes:

Although it’s often referred to as new, Bitcoin has existed since 2009 and the technology it is built on has roots going back even further. In fact if you had invested just $1,000 in Bitcoin the year it was first publicly available, you would now be richer to the tune of £36.7 million”.

The fact that you probably have heard this statement a million times right about now, doesn’t make it any less relevant to our purpose here. Indeed, it is important to note that because its popularity has been skyrocketing amongst non-tech experts, Bitcoin is currently subject to an increased level of speculation, making it quite a risky investment to dive into. The higher the risk, the higher the profits though, right?

Let’s start from the beginning.

What is Bitcoin?

As Stephen J. Bronner explains, Bitcoin is “a digital currency that isn’t controlled by a central authority such as a government or bank. It’s created by “miners,” who use computers and specialized hardware to process transactions, secure the currency’s network and collect bitcoins in exchange. Supporters say it allows for more secure transactions over the internet. That’s in part due to blockchain, a technology that records a variety of transactions chronologically in a public digital ledger.

This definition could thus be subdivided in 6 key axes:

No central command

“Bitcoin isn’t owned by anyone. Think of it like email. Anyone can use it, but there isn’t a single company that is in charge of it. Bitcoin transactions are irreversible. This means that no one, including banks, or governments can block you from sending or receiving bitcoins with anyone else, anywhere in the world” (

With Bitcoin thus comes responsibility to inform yourself and to be prepared to face challenges without a safety net to rely on.

Optional wallet securitization

“Most wallets, allow the user to be in charge of their own private keys. This means that no one in the entire world can access your account without your permission. It also means that no one can help you if you forget your password or otherwise lose access to your private keys. If you decide you want to own a lot of Bitcoin it would be a good idea to divide them among several different wallets. As the saying goes, don’t put all your eggs in one basket.” (

Wallets are programs which are set to send, receive and store Bitcoins, as well as monitor Bitcoin balances. Simply put, if Bitcoin was an email, Gmail or Outlook would be its wallet. What defines a wallet is where its private key — which accesses your wallet’s password — is stored. There are two types of wallets: hot wallets and cold storage wallets. Hot wallets are the most convenient as they enable to buy and sell Bitcoins at a moment’s notice (either through the internet — web wallets -, your desktop — desktop wallets -, or your smartphone — mobile wallets), but they are nonetheless the least secure solutions as they store the private key for you, making it quite sensitive to hacking attempts. Hardware wallets, on the other hand are much more secure, as they store your private key in locations that are independent from any internet connection — such as a piece of paper or a USB key -, and therefore cannot be stored remotely. Those can be paper wallets, brain wallets and hardware wallets.

Bitcoin price

“Like everything, Bitcoin’s price is determined by the laws of supply and demand. Because the supply is limited to 21 million bitcoins, as more people use Bitcoin the increased demand, combined with the fixed supply, will force the price to go up.” (

Currently, one bitcoin costs approximately $11,500. One can also decide to buy subunits of a Bitcoin. The smallest unit of the currency to have been recorded on the Blockchain is called a “satoshi” — after its inventor — and is a one hundred millionth of a single bitcoin (0.00000001 BTC).

Non-anonymity & Tax payment

“Because all Bitcoin transactions are stored on a public ledger known as the blockchain, people might be able to link your identity to a transaction over time. Some companies offer various tools such as Bitcoin mixers to help achieve greater privacy, but it takes a huge amount of effort to use Bitcoin anonymously. You may want to follow your country’s tax regulations regarding Bitcoin in order to avoid trouble with the law, but you have the power not to should you choose to take that risk. To improve privacy, most newer Bitcoin wallets will use a new Bitcoin address each time someone sends bitcoins to you.” (

While governments might have trouble being notified of each of Bitcoin owners’ investment, Bitcoin owners are nonetheless required to pay capital gains tax through an annual assessment. In other words, you are supposed to do so, but whether you do it or not depends on your own will. See the trick there?

What is a Blockchain?

A blockchain is a digitized, decentralized, public ledger of transactions. While its applications could cover a large array of applications, it is currently being used in three ways: for plain and simple asset transferring (currencies, shares, etc.), to ensure enhanced traceability of assets and products, as well as when it comes to smart contracts (“self-executing contracts with the terms of the contract between buyer and seller directly written into lines of code” —

Constantly growing as ‘completed’ blocks (the most recent actions) are recorded and added to it in chronological order, it allows participants to keep track of all activities without central recordkeeping. Each node (a computer connected to the network) gets a copy of the blockchain, which is downloaded automatically.

It is important to note that while the Blockchain concept did emerge through the popularization of cryptocurrencies, it is now used for other purposes such as the “uberization of management” in “future of work” reflexions through what is called Decentralized Autonomous Organizations (DAOs) see article on the subject here.

When did it all start?

Bitcoin emerged in 2009, when a certain Satoshi Nakamoto published a paper called Bitcoin — A Peer to Peer Electronic Cash System to a mailing list discussion on cryptography. While his contribution to blockchain is undeniable, Mr Nakamoto’s identity nonetheless remains an unsolved mystery to this day. The first official non-digital purchase was made in 2010, when a Bitcoin investor decided to trade 10,000 of its bitcoins for two Papa John’s pizzas. That very first trade marked the true beginning of cryptocurrencies’ history. Since then, more than 800 digital currencies have emerged and continue to do so, paving the way to a new blockchain-powered market.

How does one invest in Bitcoin?

Starting investing is quite simple: simply choose the wallet that best suits you and start buying your Bitcoin units. Once you have chosen your wallet, simply follow its instructions, buy and monitor your Bitcoin balances. And “voilà” !

  1. Choose either you prefer Hot or Cold Storage Wallets
  2. Choose the provider of your wallet

Here are 3 Hot Wallet and 2 Cold Storage Wallet providers suggestions to help you out:


Less secure, more convenient

COINBASE (USA) — Web and Mobile Wallet

Coinbase is one of the biggest wallet brands in the Bitcoin space. The service has an unparalleled reputation, great management, strong technology, rigorous regulatory compliance and plentiful funding to keep the website as close to the cutting edge as possible (

KRAKEN (EUROPE) — Web & Mobile Wallet

Kraken is a global Bitcoin exchange and supports European residents along with residents of the United States, Canada, and Japan.

Kraken offers excellent liquidity as its average daily volume is around 10–12 million euros. So if you want to buy large amounts of bitcoins, Kraken is a good option (

BITCOIN CORE (USA) — Desktop Wallet

The most important software wallet that you’ll find is the native Bitcoin software. It comes attached with a core node and gives you all the features that you could possibly desire. Bitcoin Core builds on the native client by giving the option of handling all your tasks through a graphics user interface (GUI). So really, this is the wallet for you if you’re seeking a balance between power and access (


More secure, less convenient

LEDGER NANO SHardware Wallet

The company, that used to be the second runner up in the Bitcoin hardware wallet race seemed to have matched it’s main opponent TREZOR. The Nano S has a sleek design, intuitive user interface and a wide support of altcoins from Ethereum to Litecoin, Dogecoin, Zcash, Dash and Stratis (

TRESORHardware Wallet

This is the oldest hardware wallet on the market and probably the most reputable one as well. TREZOR has a nice design, a very easy to understand user interface, and it supports Zcash, Dash and Ethereum aside from Bitcoin. ETH is supported through an external wallet called MyEtherWallet (

Should one invest in Bitcoin?

Choosing whether or not to invest in Bitcoin is entirely up to your own faith in its long-term viability. If you believe in its reliability, invest. If you don’t, well, don’t invest. It is as simple as that.

Blockchain does have the power to shift the very way our societies function. From the way we acquire things to the way our organizations — profit or non-profit — are built. Blockchain is offering an alternative framework meant for governance systems and collective organization. Still foggy to you? Let’s take a look at a concrete example. Let’s say you want to build a school for your children to go to. The first idea would be to send the project proposal to either an investor or a public organization. If they were to decline your proposal you would be left with no money to finance your project. Well, that was before Blockchain. Today, another idea would be to submit your project to a DAO service provider, such as Backfeed. Backfeed is a Decentralized Autonomous Organization (DAO) service provider aimed to transform users into owners. Often financed through either Bitcoin or Ethereum cryptocurrencies, DAOs enable large-scale public fueled projects to come to light, independent of any hierarchical subordination.

As Backfeed suggests it on its website:

“Facebook owned by its users, decentralized transportation networks independent of Uber, markets dominated by open-source communities where contributors are also shareholders, and where the value created is redistributed both fairly and transparently. Imagine the innovative potential of such organisations decoupled from the rigidities of hierarchical structures”.

DAOs thus could become the “hackers” of our current belief systems. This is particularly interesting, not just because it offers new possibilities, but because it fuels a brand new mindset: no central command, no management, no hierarchy ; autonomous organisation. In that sense, Blockchain holds a significant power, which goes beyond any kind of Bitcoin financial profit.

Such a conception could, nevertheless, give some people goosebumps. What happens if a DAO venture gets hacked? The recent hack of one of those ventures has raised a series of security compliance issues that remain unsolved. While programmers were performing fixes on several vulnerabilities, a hacker exploited an operational fault that allowed them to siphon the tokens from the DAO to a separate “child DAO” designed to prevent the tokens retrieval by the parent DAO. An unfortunate consequence of this child DAO following the same format as the parent was that the 28 day non-access funding period still applied. Within days, ether (unit of the Ethereum currency) to the value to $3.6m had been appropriated, with the currencies market price dropping 25%.

Therefore, while Blockchain does provide traceability, it does not, however, provide complete safety and thus remains quite tricky. That is fine, as long as the risk is accurately acknowledged and accepted. However, if its popularity were to pursue its growth, it would mean that a growing number of uninformed individuals would decide to invest in cryptocurrencies such as Bitcoin, thus increasing its speculation and inherent risk of loss by misjudgement or lack of protection. Ultimately, this could result in a growing number of unhappy users who would massively decide to sell their Bitcoin units, thus resulting in the collapse of its balance. Nonetheless, cryptocurrencies remain a powerful concept and as each one of those digital currencies serves a specific purpose, the alternative question could be:

Should I invest in Bitcoin or in another cryptocurrency?

If each cryptocurrency serves a purpose, then maybe Bitcoin’s was to test and democratize the whole Blockchain concept. What happens once this concept is democratized though? Does Bitcoin still serves a purpose? It might thus be interesting to turn to other digital currencies such as Neo, Ripple, IOTA or EOS. To sum up: find a cryptocurrency that serves a purpose in which you believe in, choose your wallet and get to it.

Either to invest or not in a cryptocurrency can only be up to your own personal beliefs both on Blockchain’s future and the currency’s purpose. However, what value does a personal belief hold, if it isn’t fueled by an accurate knowledge? Find a purpose, get informed and dive in.

Luxury Worldwide Service

From ordinary to extraordinary let's take a look at the Luxury 2.0 world ☄️

Sofia Lambrou

Written by

Product Designer & Manager. Merging Analytical Thinking and Creative Approaches to build the products & services of tomorrow ☄

Luxury Worldwide Service

From ordinary to extraordinary let's take a look at the Luxury 2.0 world ☄️

Welcome to a place where words matter. On Medium, smart voices and original ideas take center stage - with no ads in sight. Watch
Follow all the topics you care about, and we’ll deliver the best stories for you to your homepage and inbox. Explore
Get unlimited access to the best stories on Medium — and support writers while you’re at it. Just $5/month. Upgrade