Chapter 1: Introducing Cryptocurrency
Chances are if you're reading this book, you've already heard something
about Cryptocurrency, and it has definitely peaked your interest. You're
probably thinking you'd like to get in the profits that are beckoning you but
don't know where to start. Well, you've come to the right place.
Many people believe that cryptocurrency will eventually replace our
current economic system. That's a pretty bold statement considering that the
system we are using now has been in place for hundreds of years. However,
if you've learned anything about economic history, no matter where you
came from, whose culture you adopt, or your status in life, the economic
and political fabric of the world is never completely set. It is always in a
state of flux, and when the systems in place no longer meet the needs of the
public, they must change. We are on the precipice of change right now with
cryptocurrency.
Ask one hundred people if they know what cryptocurrency is, and you'll
probably find that only half of them have ever heard of it, likely half of
them have no idea what it is, and the odds are that half of those who do
know what it is, have any detailed knowledge. And likely only a small
percentage of them actually have earned or invested any money in it.
So, how is it that people are touting this as the next big thing in
economic evolution? The answer is simple. While the percentage of people
with knowledge of it is still small, the news of this amazing innovative
opportunity in economic evolution is spreading. It's spreading because
cryptocurrency has already proven to be the perfect solution for many who
are already struggling in this harsh and slanted economic environment. The
opportunities are endless, and all it takes is a little know-how, and you can
start building your new financial portfolio with cryptocurrency and turn a
tidy profit in the process.
What Is Cryptocurrency?
Every society since mankind began trading things of value had some
type of currency. Notice I used the word currency, not money. The reason
for this is because money is merely one form of currency; it is used to
transfer VALUE from one party to the next. Now that we are in the digital
age, cryptocurrency is simply currency in digital form.
In the past, people used all sorts of things to transfer value from one
person to the next. At one point, they were using livestock (cattle, goats,
sheep, pigs, chickens, etc.). Later, when carrying around a few cows every
time you needed to go shopping turned out to be cumbersome, they began
trading shells (conch, puka, conch, etc.) or beads, after that it was bone,
metal, and now paper (actually paper money is not really paper at all, it’s a
secret blend of bamboo and cotton fibers, woven together with silk threads).
But I’m sure you’ve noticed over the past few years, that the need to
carry around physical money is not as important or necessary as it once
was. People now do much of their buying and selling either online or with
credit or debit cards. Eventually, physical money may completely fade from
use. What’s now taking its place is cryptocurrency, the next step up in a
digital form of currency that is traded and managed entirely online.
The word cryptocurrency itself is a blend of two Greek words, "crypto,"
which means "to be hidden or to be kept private." In English, we use these
as root words quite often. A crypt is a place where you can hide dead
bodies, cryptic – to have a mysterious or hidden meaning, cryptography –
the study of breaking codes to find their hidden meaning or the practice of
solving them. This is the general idea behind cryptocurrency, the art of
writing code (encrypt) or decoding (decrypt). The second word in the blend
"currency" refers to the object used to transfer value from one party to the
next. Today, that object is money, but in the modern world of
cryptocurrency, it is digital code.
It is basically the use of a complex code to encrypt data transfers to
exchange value. This is done by creating complex mathematical formulas
and unique protocols designed to make the codes virtually impossible to
break, counterfeit, or duplicate. These protocols then not only protect the
transaction between two parties but they also conceal the identity of all
those involved.
The beauty of cryptocurrency is that it is not under the control of any
governmental agency, so there is no centralized institution or political entity
responsible for determining its value. The value, therefore, is determined
primarily by its users and is based on supply and demand. This causes the
price to fluctuate more like that of stocks and bonds.
It is used just like you would use a physical currency; you can make
purchases, save it, trade it, or even invest it in the same manner. The
difference is that you would never hold them in your hands; they only exist
as lines of code maintained in a database, and just like with physical
currency, you cannot change its value. If you have $20 bill in your hand
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