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All right bitcoin blockchain dogecoin Ethereum nights Everyone is talking about Cryptocurrencies right now, but Good lord, what does all of it mean so Welcome to the one post that will take You from crypto noob To crypto genius.
I’m going to tell you What it is, why it keeps becoming more Important
What I’ve actually invested in myself And the dark side of it.
Okay, so when society was in its early Stages there was no such thing as money. We’ll call this stage one, the only way To buy something off someone Was going up to them and be like oh my Really like your horse. I’ll trade you my cat for it sorry Milo I never trade you, but the issue with a
A system like that is that Even though you might be perfectly happy To give up your horse you just Might not want a cat. So that trade will Never happen, but that’s where currency Came in Stage two coins which because they were Made of precious materials like gold and Silver.
Everyone just accepted that they were Worth something you’ve heard of the British pound right. Well the reason they’re called pounds is Because one pound literally just used to Be One pound of silver, and so all of a Sudden in a trade.
It doesn’t matter if you don’t want me Cat as long as I have coins. We can still trade for your horse even If you have no use at all for the silver Because it’s a precious material you. Have that reassurance that You can take that coin give it to Someone else and trade for something That you do want. Convenient right, but then this evolved To stage three as banks became
Established and governments had control
We realized that as long as there was
Trust in the system we could move away
From needing to carry blocks of precious
Metal
Towards something even more convenient
Paper money
It does the same thing, but now the money
Doesn’t have value because it’s made of?
Pure silver
It just has value because the government
Says it has value
Like this 10 pound note here in the UK
The note itself is just made of
Well.
It’s actually made of plastic they
Changed it recently because it’s more
Durable but if you look closely you can
See that all this actually is is the
Bank of England is promising that they will
Pay the bearer of this note, 10 pounds
Really, this is just a receipt a kind of
Proof that you own a certain amount of
Money
But as technologies improved even
Further, we found even more convenient
Ways of storing and trading our stuff
We’re now in what I would call stage
Four where more people than ever are
Buying things online and using credit
Cards and really when you’re at that
Stage. We don’t see our money anymore, it’s not
About coins or notes or
Cats it’s just entries in a spreadsheet
Like when I buy a music album from
Amazon all that’s happening is that my
Bank adds an entry in my spreadsheet
That says Aaron now has ten dollars less
And then amazon’s bank adds an entry
That says
They have ten dollars more so the reason
I’ve given you this entire intro
Is to give you context on where
Cryptocurrency sits it’s seen by many
People
As the most convenient era of exchange Everm Stage five the way to think about a Cryptocurrency is that It’s 100 virtual I know the logo for Bitcoin kind of looks like a physicist Coin It really is a bit coin now, but with Crypto there is no gold there is no Silver there is no paper It really is just the transfer of Digital assets The core concept is exactly the same
Think of them as literally just running
Spreadsheets of who’s paid what to who
but instead of multiple banks keeping
their own separate records with crypto
There is just one
Enormous spreadsheet of every
A transaction made using that currency
And this is called a ledger okay, we all
Have a good spreadsheet, but
What’s all the fuss about why is?
Everyone going crypto crazy
Well, there are some distinct advantages
To a currency system like this
One it’s decentralized which means that
While every transaction of a given
Cryptocurrency is
All recorded on the same ledger, there
Are many many copies of that ledger
And anyone who is a part of the network
Has one you might have heard of
Cryptocurrency mining
Or bitcoin mining well all that is is
Someone who sets up a computer to crunch
Through transactions
On their copy of this ledger or
Spreadsheet there are already about a
Million bitcoin miners around the world
And bitcoin is just one type of
Cryptocurrency
The reason they’re doing it well if you
Dedicate your computer’s power to mining
say bitcoin then you will earn some
bitcoin as compensation
so the result of this is that if i go
into a store and spend five bitcoins on
something. Then, instead of just checking with one
The Bank’s records the shop instead checks
With every single computer on this
Network if I have enough
And assuming I do each computer will
Give the go-ahead
And then every single one will update
Their records independently
So because you end up having this many
Copies of exactly the same ledger
It becomes very easy to tell if anyone’s
Trying anything fishy
Did you who bought this?
Like if I try to hack into someone’s
A computer that’s on the network and
Give me more money by adjusting
Figures on their copy of the ledger
It’s not going to get through the system
Will realize that 99.9
Of the copies on the ledger are saying
One thing, but one of them is saying
Something else
So must have been tampered with there’s
Very clear organization of the system
And I think people believe in it because
They see the future as
Open traceable transactions much more so
than having like some bits of the record
over here and
other bits over there and i know it
seems complex at this point but
as we go through this. I think you’ll
Realize that for a lot of people in a
Way
It’s simpler there are plenty of areas
In the world that have internet access
Which is?
All you’d need for crypto, but don’t have
Access to traditional banks, which
Require a lot of paperwork
And documentation well two and I’ve kind
Of implied this already, but
The main perk of crypto is that you
Don’t need banks anymore
Because everything is stored by the
People on this ledger
You can make international payments
Almost instantly instead of it taking
Half a day
With no spending limits plus you don’t
Need to worry about exchange rates you
Don’t need to worry about interest rates
And
Even transaction fees are close to zero
For
Some cryptocurrencies that is but this
Is where the real fun begins. I’m fine at parties I promise the reason
That cryptocurrencies are called
Crypto currencies is because they’re
Secured by cryptography
And one example of this which a lot of
The major cryptocurrencies like bitcoin
Use
Is blockchain now people often get
Confused by this blockchain is not
Bitcoin blockchain is not a currency
Itself.
