Bitcoin and Cryptocurrencies have, of late, been associated with being overhyped scams. Lack of understanding and ignorance drive away retail investors and business owners away from virtual currencies.
This book attempts to throw light on what these currencies and technologies are and how they work.
Bitcoin in a Nutshell
Bitcoin has emerged as a peer-to-peer virtual currency rather than a government-regulated fiat currency.
Fiat currencies that are regulated and centralized by governments are backed by gold deposits.
Bitcoin’s valuation is determined by the number of people using it instead. This is bound by many laws of supply and demand rather than being regulated by government policies and regulations.
How can I get my hands on Bitcoin?
The author keeps it simple here and elaborates that one needs to identify the company/exchange where he can buy Bitcoins from.
Bitcoin can be bought in different Bitcoin units, the smallest unit being a one hundred-millionth Bitcoin.
Bitcoin costs a kill. Is there any other way here?
Bitcoins can be obtained by mining. It is a process where software is utilized to solve complex math problems. Once the problem is solved, one is rewarded with a percentage of the currency that is unlocked.
One can download the entire Blockchain to mine solo or join a mining pool. In pool mining, many individuals collaborate and mine and the rewarded coins are shared among them.
Bitcoin mining is very energy-intensive, and the best value is when mining is done with renewable energy.
Bitcoin and its Uses
The author does not go into details about how a Bitcoin is mined or how its value is calculated. Instead, he briefly explains what a Bitcoin is and how it can be obtained or used.
Bitcoins, as you know, is a virtual currency; its transaction happens online. There are several uses for Bitcoin, considering its huge valuation has grown rapidly. The growth has happened to unimaginable levels when compared to other investments.
Bitcoin for Online Purchases
Bitcoins can be used for online purchases just like you would pay for your online purchases through a card or a wallet. A Bitcoin can be used as a payment only where a Business accepts Bitcoins as a payment method.
Bitcoin as an investment and trading instrument
Bitcoins can be used as an investment just like any other you would buy and hold. Bitcoins are considered a highly risky investment option that can also generate high returns in the long run, considering the kind of valuation it has seen in the past.
Bitcoin can be used as a trading instrument where one studies its price trends and buys low to sell high, expecting to make profits from the difference. Unlike other stock valuations are done basis of their revenue and profit generation, Bitcoin’s valuation is based on its demand and supply.
The author says a thorough study is required by an individual before he chooses to invest or trade in Bitcoins. Historically, Bitcoins have shown wild swings, so one should be aware of their risks.
What is Blockchain?
Blockchain is a technological revolution that was originally invented by Satoshi Nakamoto as part of the Bitcoin idea. It is a technology that enables codes behind a program to be made public.
Making Blockchain decentralized allows for its development as well as verifies its source code. As it is decentralized, hackers cannot corrupt it as they could do a centralized host or server.
Blockchain is a digitized ledger that creates a database of every transaction linearly. This database can be widely shared among a large user base while constantly updating itself.
How to Make Money with Blockchain?
The author brings us to probably the most important part a reader would be interested in. How to make money using Blockchain technology? There are quite a few, and the author briefly discusses them.
Build your Blockchain
Several companies are seeing value in using this kind of technology. This saves them time and money and keeps things secure.
If you are someone who can build your Blockchain, then you can sell it to companies like these who would pay you handsomely.
Add-ons
You could do this if you could build something that could make an existing Blockchain more effective. You could sell this as part of a service.
Mining
This is another way of making money with blockchains. Miners take transactions and write code to keep everything in place.
Investing
You can look to invest in companies that build blockchains. You make money when the company sells or provides its services
Cryptocurrency and Blockchain
The overall technology that holds Bitcoin and other Cryptocurrencies is Blockchain. When you buy Bitcoin or any other Cryptocurrency, you are going to start your Blockchain.
Several terms explained in the book will allow a layman to get started with Cryptocurrencies.
• Exchange.
• Fiat.
• Blockchain.
• Node.
• Mining.
• Fork.
• Sharding.
• Software wallet.
• Hardware wallet.
• Cold storage.
• Smart contract.
Benefits of Being Anonymous
One of the benefits people enjoy working with Cryptocurrencies instead of traditional currencies is they get to be anonymous. On the pretext that Blockchain technology remains anonymous, your personal information is safe and secure.
The author feels Cryptocurrency appeals to many people as they don’t rely on a central governing authority or any financial institution. They are tired of having someone in the middle of their business, adding more fees, and slowing down the process of commerce.
Are There any Risks of Cryptocurrency?
With many benefits that one can enjoy from the Blockchain and Cryptocurrency, there are also some risks one should be aware of.
Government interventions.
Criminal activity.
E-Wallets.
Watching out for genuine sellers.
Myths of Cryptocurrency
For someone new to Cryptocurrencies, there’s always a fear surrounding them due to Myths about these currencies. The most common ones are called out by the author in the book. He goes on to clarify these myths in the book.
it’s not backed by gold or silver, so it’s no good.
Only criminals use it.
A government agency controls it.
it’s a scam.
Cryptocurrencies can’t be hacked.
Transactions in Cryptocurrency are untraceable.
Merchants won’t accept Cryptocurrency.
Conclusion
Cryptocurrencies and Blockchain may well be the future of how we transact and build more efficient businesses. Many people are still averse to this type of technology, but they will for sure be amazed by its growth and potential as years go by.
To read more about how you can profit from Blockchain technology, get your copy of the book now.
(Amazon paid link)
Guest Post - Written by Mr. Lal Bajaj, Bangalore
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