The Definition of Bitcoin bitcoin investment advice
Almost everyone now knows about bitcoin investment advice trading. While most people have had success with the currency, there are others that have faced challenges. If you are planning on getting into the market here are some of the things you should be wary of:
The bitcoin wallet
To use the coins, you need a digital wallet. It can be an app, hardware or cloud based. Some bitcoin investment advice companies help beginners by automatically generating the wallets for them. You can store the purses online or offline. For security reasons, save yours online and ensure that the password protects it. Avoid an online wallet as it can easily be hacked. If you have to use the unit keep a limited amount of money in it.
While this is the case, it doesn’t mean that you shouldn’t be conversant with the prices in the market. Regularly visit forums and related places to find the current prices of the coins. Who knows you might find it profitable selling it at the current prices? Bitcoin investing can be quite lucrative
Getting Started With bitcoin investment advice:
Bitcoin is a revolutionary way to save or spend digital money, and has the potential to transform other realms too. You don’t need to be a mathematician or a cryptographer to understand it, and when you start to see how the system comes full circle, you may be delighted. This is the first of three parts.
Let’s say I send you a movie or song over the Internet. I attach a file to an email, and once I hit send, you have it. You can watch the movie or delete it. You can do what you want with the movie.
But keep this in mind: I still have a copy.
This is how digital information typically moves around the Internet. You don’t really transfer content, you copy it. And so far, this has worked out pretty well: Although it may not be legal or fair, copying a song or movie is unlikely to devastate the economy.
But now think about copying money.
If I send you a dollar, it’s important that I don’t get to keep a copy. Using email to make infinite digital money might seem attractive at first, but what happens once everyone starts doing it? There would be rampant inflation and the economy would fall down.
Traditionally, in the world of wire transfers and debit cards, digital money is tracked centrally to prevent duplication. A database, at your bank for example, verifies who owns what. This system relies on centralized authority, which is a familiar concept, so we “get it.” Of course, that central authority has complete control over your money.
But what if there’s another way? What if, instead of relying on an fallible centralized authority to assure us of who has what, we rely on distributed authority that isn’t controlled by a single party? What if our money has value not because we trust the power of a government to back it, but because we trust the power of math?
This takes us to Bitcoin.
Bitcoin is a system of digital currency that is not associated with any government or institution.
Somewhat confusingly, the word “bitcoin” (without capitalization) is also the name used for the currency itself. The system (Bitcoin) was created in 2009, but the units of currency (bitcoin) are being generated continuously through a process called mining. It’s sort of like gold mining, but for the digital 21st Century.
All transactions on the Bitcoin network are permanently recorded in a long list called the blockchain. This is not a secret list guarded by a central authority. It is a widely distributed public list, and every participating computer has a copy of it.
The Bitcoin blockchain is an immutable, public, distributed ledger:
By immutable, I mean that once a record has been in the blockchain for a couple hours, changing or erasing it becomes infeasible. This happens because so many other transactions have been built on top of it by then.
By public, I mean that anyone, not just a bank employee, can look at the blockchain. This doesn’t mean that you can see exactly who is sending or receiving money, because records are pseudonymous — identity is obscured through the use of pseudonyms, which are typically short-lived.
By distributed, I mean that synchronized copies of the blockchain are held by computers all over the world. There is no canonical master copy; all copies are created equal.
And finally, by ledger, I mean that the blockchain is a list of transactions. Think of it like your Venmo transaction list, if you know what that is.
This distributed ledger is called the “blockchain” because individual transactions get grouped into larger “blocks,” which are chained together in a sequence. This is faster than adding transactions one-by-one, and a new block of transactions is created every 10 minutes or so.
To better illustrate the power of an immutable, public, distributed ledger, let’s imagine a common but hypothetical situation involving $5 worth of bitcoin. (The value of a bitcoin can rise or fall, but $5 is likely just a fraction of a single bitcoin.)
In our hypothetical situation, my friend Elizabeth sends me $5 in bitcoin, a transaction recorded in the blockchain — because every transaction is. In turn, I send $5 to you because every copy of the blockchain now shows that I own the money that used to belong to Elizabeth. Nobody involved — me, you, or Elizabeth — needs to ask an authoritative central database who owns what, or for permission. Authority is decentralized; it is in every copy of the blockchain, everywhere.
You may be wondering: Where did Elizabeth get that bitcoin she sent to me?
The short answer is that someone probably sent it to her. This is how almost everyone gets their bitcoin.
But those coins had to be created initially. How did that happen?
How a Bitcoin is Born
U.S. dollars are born when the U.S. government prints them, and other traditional currencies are also issued by their respective governments. A long time ago, U.S. dollars were backed by an equivalent amount of gold in the U.S. treasury, and in those days creating additional currency required coming up with commensurate gold — hence the popularity of gold mining.
A bitcoin is also created through a process called mining. It’s digital mining, accomplished with computers and software rather than dynamite and shovels. In order for a new block of transactions to be added to the blockchain, a burdensome math problem must be solved, and the “miner” who solves the problem first is rewarded with brand new bitcoins. That’s how bitcoins are mined.
In other words, mining does two things: It adds blocks to the blockchain and it creates new bitcoin. And that math problem that the miners are racing to solve involves something called hashing.
A hash is a fingerprint for data, in that it uniquely identifies a piece of digital content — whether the content is a photo, a photo album, a movie, a password, text, or whatever. It is derived from the digital content, through a process called “hashing,” and it can take the form of a string of letters, numbers, and other symbols.
Hashing is a core concept in computer science, widely used behind the scenes. To enhance security, online services often store hashes of passwords rather than actual passwords, and compare hashes rather than passwords when you log in. Facebook uses hashes to check the appropriateness of uploaded images. Nobody at Facebook looks at every image to see if it is violent or pornographic. Instead, Facebook takes images that have been reported as inappropriate and hashes them, creating a list of fingerprints of bad content. Every time a new photo is uploaded to Facebook, it’s hashed using the same function. The resulting hash is compared to the list of hashes of banned content — and if they match, Facebook knows the photo is one of the inappropriate ones.
Typically, when software runs a hash function, it takes input data— like a photo — and outputs a gobbledygook string, which is the hash.
So for example, let’s give this picture of a puppy to a hash function called SHA-256:“Puppy” by Jonathan Kriz is licensed under CC BY 2.0.
Clearly this picture of a sweet puppy isn’t violating any Facebook rules! Anybody can tell that. But no person at Facebook is reviewing the picture. Instead, software at Facebook checks the hash of the picture, which is this:8EC9D4718F919C6087CA589EDA09E7DD9A7ACCDB820F42B4196E1D0D4BEDE77A
That’s the SHA-256 result of that picture, expressed in hexadecimal. Not quite as cute as the puppy!
An interesting feature of a hash function is that if we change the input even slightly, the output will be entirely different. Let’s say, for example, that we change just one pixel of the photo of the puppy, by putting a 1-pixel black flea above his eye:Can you see the flea?
When we hash the photo, we get an entirely different hash, even though only one pixel changed:039E1AF92F7D00775ECE35C2216FC3F7F0BBCD31F912A105D2601380D8DEABA2
Now, we could use real content and real hash values for the rest of this post, but hashes are unfriendly and hard to tell apart. Instead, let’s use emoji to represent these inputs and outputs. In the example below, the input (the content to be hashed) is represented by the cat’s face, and the output (which is the resulting hash) is represented by a ribbon:
Imagine that Facebook has run a hash function on two inappropriate images — let’s call them 🚫 and ❌ — and the resulting hashes are 💩 and 💀.
Later, somebody uploads a photo, which we’ll call ?, because Facebook don’t yet know what it is. Facebook hashes the photo, and the result is 💩.
Although no one looked at the mystery picture, Facebook knows it’s the inappropriate photo that we’re calling 🚫, because the hashes match. No one had to look at the newly uploaded input directly, because it has the same hash as a photo known to be inappropriate.
Photo identification is just one application of hashing. Bitcoin mining, which creates new bitcoin and adds new transactions to the blockchain, is another.
So far, in Part 1, we’ve learned that Bitcoin is a decentralized currency, not generated by any government or financial institution, and what hashing is. In Part 2, we’ll learn how bitcoin miners use hashing to literally make money, and how cryptography allows bitcoins to be unique and non-copyable even though they are completely (and irreversibly) transferrable.Making Money Trustworthy
Bitcoin Explained (with Emoji), Part 2medium.com
Bitcoin Cash: What You Need to Know
Reality CheckIt's “reality check” time - again. Cryptocurrency is not actual money -- it's functional money. We can't just listen to the programmers and anti-capitalist group “We are Anonymous.” Some of these guys/gals are good, some are radicals. It's obvious that the information wars, the misinformation and disinformation campaigns, are in full force. But cryptocurrency is not the perfect “money.” It is not even the perfect “currency” or is it? How about bitcoinI is, however, a near perfect lesson - about how code can substitute for checks. Checks written or debits made or credits obtained -- all based upon fiat money. The problem or perhaps the next step, will be when cryptocurrency itself retains value -- long term. When fiat money is no longer required to support the system of private digital monies. It is going that way now. Digital monies creeping up on ten years of value. So the lesson is that we "the people" can create an encrypted monetary ecosystem which cannot be manipulated. A resilient, person-to-person, fiat e-currency, immune to fickle governments. Immune to us. An irredeemable currency, as it were. Once the block-chain becomes obsolete, however, and that will happen at some point, then the next alternative currency will have been born. And hopefully, it will not owned by the Chinese. Bursting Bubbles?Then there is the supernova theory. A stellar explosion which briefly outshines the entire galaxy, according to Wikipedia. But in this case, the comparison is rather minor, because bitcoin has not yet fully shined. If one looks at bitcoin's past, this stage may have occurred already, when the value exceeded, very briefly, over $1200 dollars each. Like a supernova, bitcoin's energy was expelled for a brief period of time and we are now watching as the residual bitcoin energy fades into oblivion...or are we? So here we go again. Into the great beyond. Perhaps as posited, to over $40,000 a coin? Is this just a maturation stage? A waiting period. A minor plateau on way to Mt. Everest, before we strap on our oxygen bottles and head for nose bleed territory? OutlookMonday, August 24, 2015, marked the beginning of the upward tick for Bitcoin, but only a tick. From the $200 range bitcoins pushed to $500 each. Then they slipped back to lower territory – again. As of this update (April 28, 2017) the upward pattern or revaluation is holding above $1000 (U.S.). Above $1300, actually. It has exceeded that psychological barrier: gold. This pattern is not like a stock, but it is similar. Monero began its serious climb after August of 2016. They currently trade for over $20.00 each. DASH, long bashed by the alleged purists of cryptocurrency, has steadily risen in value. It currently trades at over $70.00 each. DASH's latest upturn began in January of 2016. A year long uptrend, once exceeding over $100, per coin. Company stocks can rise in value and then fade, but the underlying substance, at least for some types of stocks, are voting rights in that company. Note, however, that many stocks and bonds are parceled out in the form of mutual funds or ETF's, where the voting rights remain with the investment houses. Individual investors – you and me – just hope to earn a tidy profit in 20 or 30 years. In Dash, there is a voting system. Not in Monero or Bitcoin, however. Not exactly. We are told that companies mature and their stocks stabilize in value – or grow slowly. We are told to look for that slow and sure growth. Dash? We are told to ignore the fact that the dollar is devaluing and all the American companies, along with it. At least the ones that remain in America. The companies that flee are chased by Uncle Sam, as he tries ever so gently, to shove worthless fiat bills down their throats. We are told not to worry about the "helicopter money." Is Ancient Rome an example? SpeculationSpeculation about the next great 'Bitcoin Bubble' is all over the blogs. Each time Bitcoin gathers a head of steam, the pundits climb on board the train and argue with each other. The Bulls and Bears cheer and jeer, respectively. Will Bitcoins reach $40,000 each? According to some they will go higher. Others cite the supernova scenario. What of a stable value? What of blocksize? Slow transactions? The Chinese? Litecoin? Ripple? The “Gold Bugs bash Bitcoin as just another fiat currency. They have a valid point, but they also forget the value of the blockchain accounting system. Why can't such a system be used to verify ownership of assets? Actually, this has already been accomplished, but not in a big way. Other IssuesEthereum is one such an example. They could issue company stocks on their “blockchain.” Now just imagine for a moment, if their “blockchain” forks? (For the lay person this means that their software just failed and this still occurs within these types of systems.) What happens to your stock? Ethereum has had its share of problems. Manipulation of offshoots, what some call side-chains, to move (not steal) coins. One can use Ethereum Classic instead. Gold Bugs don't need to worry about “forks” just confiscation by governments and thieves. The terms “governments” and “thieves” are often interchangeable, of course. The government fiat-currency buffs are the biggest hurdle to innovations like bitcoin. They begin their morning prayers to John Maynard Keynes, the dead economist responsible for the fiat based currency system we presently use. They fill us with 'concerns' that these new technologies can compromise banking systems. And they, the investigative arms of nations, do have valid points -- as they apply to state run, state controlled, banking systems. But, crypto is private. I might add that many of us feel we use the current government fiat currencies, involuntarily, i.e., fiscal-slavery-lite. No Father?Bitcoin has no father, as some have put it. It is like gold, a physical thing, in that respect, but it is not physical. We know there is about 363,762,732 pounds of gold on earth, at last count, according to Google - on November 9, 2015. We know about how many Bitcoins will be “mined.” About 21,000,000 give or take. But the similarities end there. Will this next Bitcoin surge cause the entire ecosystem to burst like an over-inflated fiat currency or will the world finally stand up and take notice? Could Bitcoin implode, like some fantastical singularity – an intelligent one as some worry - leaving not a trace of itself and millions of “Bag Holders” staring into space-time? Some Bitcoiners will even tell you that money is 'time' and Bitcoin is analogous to a big clock. To be...To optimists, pouring millions of dollars into bitcoin, this is proof positive of its stability. Not to mention yen, yuan, pounds, and various other fiat currencies flowing in. If the current influx of fiat monies continues its pace, Bitcoin will continue to exchange over a billion dollars each week. To the average international bank, this is peanuts. But these exchanges are taking place over automated and decentralized systems (software) anybody can download and use...or not download, but still use. That makes all the difference. Virtually no 'overhead.' Streamlined. Efficient in a lot of ways. But is is very slow when compared to the current financial systems. Ten minutes? Two hours? Just how long does a transaction really take? Say no to the "Download"Downloading is another problem. Nobody is in charge of the Bitcoin Software. A group – a community of sorts – must come together to “update” the software. Then we, the users, must either swallow the “update” or move on. And the software is slow to load the blockchain. It takes days... In other words, human cooperation becomes the new “gold standard.” Interesting, isn't it? Unless...like what is happening currently, one nation assumes control. China, for example. Five ReasonsThere are five good reasons Cryptocurrency will continue to surge - worldwide: Over-Regulation: Countries are making crypto illegal or over-regulating it. When things become illegal, supplies constrict and millions of people who wish to keep using or buying the thing cause the price to elevate. Excessive Debt: Countries are mired in enormous amounts of debt – and we don't trust their currencies. We don't know when the next country will go bankrupt. Once they do, the contagion spreads. Fiat-currencies devalue. Prices rise. The countries then 'pump' more fiats into the ever failing Keynesian Model. Current Weakness of Gold(?): Valuable or other base metals are not performing as well as they could be, owing to the economic slowdown and manipulation. As industry slows, the economy is obviously on the skids. Gold, silver, copper have all experienced unusual drops in value. Historically, it appears to be an inverse bubble. When compared to the underlying fiat-currencies, gold and silver should be much higher. Many gold bugs and sound money theorists place the blame squarely upon the misplaced trust in the dollar. Also – a misplaced trust in cryptocurrency. Once the people realize their error, as the sound money supporters state, gold will seek its rightful and high price, relative to a failing fiat-currencies – they hope. (Or are we in some new monetary paradigm?) Confiscation: Gold can and has been confiscated by governments. This is crux of the “Gold Problem.” In short, sound money theorists cite gold's long history of hard value. They rarely bring up the fact that when gold re-values and currencies crash, governments react by confiscating the gold and reissuing fiat-currencies. Gold is also heavy, must be insured, and cannot be transferred online in the U.S.A. (Bitgold -- now GoldMoney, the company, has solved this problem in Canada. But it is not a decentralized blockchain. It's just another method to invest in gold.) Privatization: Private currencies are very difficult to steal. Governments can't make “private” currency or necessarily confiscate it. The fact that governments cannot control the number of fiat-Bitcoins being issued (mined), traded, and transferred, is a deal-breaker when it comes to the adoption of private-cryptos. Monero and DASH are the primary players in this area. Zcash is attempting to play, but is struggling. The fact that people, the world over, trust cryptocurrency certainly bothers many governments. Governments, most of them, need to retain their ability to 'make' currency – since most don't really make 'money.' If the value of cryptocurrency advances, then how will this change government-fiat currencies? Will they devalue, if crypto becomes a household word? No doubt. Over-regulation is a key factor. The more government entities attempt to curtail innovation, that less innovation there will be. Cryptocurrency is innovation. That's why governments are imitating the “blockchain” software. Nobody (okay – almost nobody) trusts government, however. Government investigations and the general economic malaise worldwide, are other examples recent cyptocurrency investment disinterest. Why jump into a quagmire of rules, regulations, ad infinitum, unless the profit potential outweighs the risk? Cash or dollars are easier to use, but far less private. Maybe the Chinese are fleeing their monetary system in droves, but should other countries follow suit? Perhaps the biggest hurdle, given all of the bad press, however, is trust. Specifically, cryptocurrency trust. The “fear factor” is alive and well within the "crypto-sphere." This is a sobering fact. If and when Bitcoin goes “Supernova” is the big question. An expanding ecosystem, where a Bitcoin fiat currency valuates too quickly, could lead to such a phenomena – just as it does in nature. Bitcoin is unstable. Instability does not last in nature. Neither do good intentions. But...shall we say "In Crypto We Trust" ???
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