Being scared of the BitCoin generation is based on misinformation promoted by those that don't take the time to understand what is happening
This is not a technical analysis
If you want to deep dive into this new world packed with great acronyms and terms that are designed to confuse you go right ahead.
However, I am laying out my Crypto 101 learnings that will help you understand reality and not be perceived by those that are scared of change.
This is a time of transformational technology that changes our lives over a relatively short number of years. Think of Amazon. Google and Facebook are all products that have changed what we do.
Now enter Tesla the new market darling that is bringing Electric Vehicles mainstream. If you are not noticing it just wait a few years until half the cars on the road will be electric and you will say “gee I didn't see that coming”
Furthermore, early adopters creamed the investment opportunities in some of these technologies that did not look real at the time.
Remember Amazon was a retail book store without a future, Google just a search term without income, and that Facebook thing for horney university types, what a joke.
How did the crypto business all start
This is as strange as the market itself. A man named Satoshi Nakamoto dreamt up the whole blockchain idea and gave it to the market. It is unknown if Nakamoto is a made-up name a group or a business and we will probably never find out.
We do know that about 1.2 billion coins are nominated to them and held in storage.
The beauty of this is that there are only 21 billion coins on the issue and no more can ever be released. This adds scarcity to the product.
Many institutions and investment Groups use this as a store of value, they deposit funds and let it ride the distance. They understand that local currencies (FIAT) lose value over time and gold has become fixed at a price so this is an ideal place to store excess cash.
The whole base is attended by Miners that control the data and earn rewards in coins.
This can be a big hedge against inflation that currently grips the world and changes many asset structures.
Bitcoin Fear is heralded by FUD promoters
Reading a Twitter group yesterday someone asked if Bitcoin had any value at all. Now, this is a reasonable question that we all ask at the start of a journey of discovery.
What amazed me was the totally uneducated crap that followed saying ludicrous statements that came from ancient reviews espoused by doubters and fear mongers.
The first thing I always do when writing an article is search the Google questions. This is to see if there is any traffic and what they are saying.
The first one was from a noted publication saying Bitcoin would never go over $20,000 and would crash and burn very soon. I looked at the date and it was 2018 so I understood the anguish. However at today's price some three years later of $65,000 I think they may have underestimated the future.
In the Twitter, feed one said that bitcoin used more power than most small countries and that they were creating all the global warming problems.
I guess all the home computers in the world would create the same issue however that is just silly.
The power of Mining Bitcoin
Bitcoin depends on a mass of transactional data done by what are termed, Miners. These guys use Rigs which are basically computer farms to do all the heavy lifting. Yes, you can do it from a small rig and many do however the returns are hard to get.
The majority of Miners are ultra-large businesses that operate in areas of very cheap power.
Many were in China using excess capacity from Hydropower however the Chinese Government spat the dummy and kicked them out because they were supporting an American operation.
Now the miners are spread across the world in areas of low-cost excess Electrical supply.
Hydro Power, wind power, and solar energy even using Volcanic Geothermal action in El Salvador.
The miners get paid in coins for achieving their obligations to network support. This will continue for the next decade or so however the need is slowly declining over time.
Blockchain, Bitcoin, and Alt-coins are all the same
Blockchain is the distributed ledger that handles transactions between users in a secure, cheap, and fast process.
Bitcoin is a store of value and a trading currency that uses Blockchain to support independent transactions. One fallacy is that the coins are real and you can wear them around your neck as a show of wealth. But no, they are simply bits of data highly encrypted and stored under secure strings of codes,
Altcoins are the support network for both the above. Put simply anything other than Bitcoin on the Blockchain network is an Altcoin.
Many of the Altcoins have mining activities similar to bitcoin.
What has changed so dramatically with this new regime of trading
The Crypto trading platform is Just like stocks and shares however it trades in virtual assets and not real bricks and mortar.
Just like any investing arrangement, it is subject to highs and lows however they are more exaggerated than normal trading regimes.
The market is still controlled by bulls and bears that can manipulate the trading activities so they are just one part of the volitivity.
Nothing can go up continuously, there will always be corrections based on all things including market speculation. That is part of the game.
The major consideration is long-term growth that continues to rise over time.
Disruptive networks explained
It all comes with a warning
There are Crypto stocks that do very little yet are regularly traded by speculators. They are open-ended and do nothing except provide fodder for the speculators. Yes, they can be manipulated as we found when Elon Musk made a joking reference to Dogecoin. It went up on a joke reference and this was a coin established as a Joke coin without any foundation.
So stay in the top 100 coins where there is some safety in numbers. There are about nine thousand coins so there must be one for you.
What do Alt-coins actually do?
Remember Alt-coins are anything other than Bitcoin. They are Alternate coins.
Let's start at the top of the tree with Etherium. These are smart contract providers
Ethereum is a decentralized, open-source blockchain with smart contract functionality. Ether is the native cryptocurrency of the platform. Amongst cryptocurrencies, Ether is second only to Bitcoin in market capitalization. Ethereum was conceived in 2013 by programmer Vitalik ButerinFrom The wik
Others similar to this are Solano and Cardano. Much lower market perspective but like in operation.
DIFI and what they do
I promised some acronyms and really starting to deliver them now.
CeFi — Centralized Finance — users trust the people and institutions storing funds to ethically manage these funds and execute on services the business is offering.
Defi — Decentralized Finance — users trust that the technology will function as intended to execute on services being offered.
DiFi — Distributed Finance — users trust that the technology will function as intended to execute on services offered and that the institutions holding funds to ethically manage these funds.
They allow the movement of an asset directly from peer to peer.
Uniswap is a Defi coin that allows the exchange of token value. You may have an Eth and your buyer wants Bitcoin values can be aligned.
Where is the Metaverse
Meta meaning description and verse is Universe
This is the realm of 3d adventures and certainly a place where Facebook is moving. Gamers and others are all trying to get into this market.
The word ‘tokenomics' is a portmanteau, made up of two words: token and economics. So, tokenomics is basically token economics or crypto economics. It is the study of the economics of a crypto token –Wikipedia
We do this to put a value on a coin or product. The oft-used one is the coin price and market value.
We know that Bitcoin has a supply of 21 million coins so at today's price bitcoin is valued at about 1.2 trillion and Eths at about 566 billion so a long way behind. If we think that is a lot of money then compare with the other market.
- Facebook 1 Trillion
- Tesla at 1.1 Trillion
- Amazon at 1.8 Trillion
- Google at 2 Trillion. ( Now known as Alphabet)
Therefore Bitcoin is currently lagging behind the field. The goal is to be as valuable as the Gold supply as a store of value The total gold supply is currently about 9 trillion.
Interestingly Bitcoin today equaled the Silver market in total supply.
Some other terms you will want to understand
|Hodlers||People who invest for the long term in crypto|
|Whales||The largest shareholders|
|Wallets||A transaction medium for coins|
|Ape||To buy a new coin|
|Black Swan||An extraordinary event that could affect the market|
|Candles||Vertical marks on a chart|
|All others||The full list|
Is it worth investing in the market
Naturally, none of this is investment advice. I am not qualified to give it or lead you in any direction that you don't check with an independent adviser.
The general consensus with the educated investors is that Bitcoin has a near-term objective of a $500,000 coin. After that, it could go to a million or even 5 million a coin within the decade.
Nothing is overnight and growth will come with hiccups along the way.
Furthermore, we could have a Black Swan event like a local Global Financial Crisis, an attack on America (9/11), or even a pandemic like Covid.
Any major event will affect the market in one way or the other.
Ethereum price tracks at about seven percent of Bitcoin so going from today's $4700 to a perceived $35 K. ( 7% of Bitcoin at $500K)
All the others will go on market sentiment however total circulation times the price will indicate where it will end up.
However unless you know what you are doing stay away from futures, bottom dwellers and
Gimmick coins leaving them for the playlist.
Finally, never invest more than you can afford to lose, You can never tell the future.
As stated this is just a very rough overview to provide a bit of information on a subject that will be around for a long time.
Yes, I am an Investor however I rue the fact that when I first looked at this in 2018 I did nothing about it until 2021. A half-a-million-dollar mistake not to be made again
Being scared of the Bitcoin generation by Peter Hanley
Crypto to make money on the best platforms