With technology moving exponentially, the world of finance is doing the same with crypto currency and blockchain. The purpose of this podcast and article is to shed light on some of the basics of crypto currency and other digital currency. Greg, my husband and former RIA (registered investment advisor), explains these concepts in the podcast in a way that most people will understand. He is extremely good at this, so don’t cross your eyes just yet!
As a disclaimer, we are focusing on the basics of crypto currency, blockchain and bitcoin. At the end of this article are sources for further study. You can go as deep as you want as there are videos and articles propping up daily about the subject. We hope to enlighten you enough to understand the information sufficiently to discern for yourself its application for your life and business. The train is coming--actually it’s here, so it’s wise to educate yourself in the basics of crypto currency and blockchain.
We will cover five areas: definitions, use, privacy, the U.S. dollar and application. We end with further sources for your perusal and study.
One: Definitions of Digital Currency
Crypto Currency is encrypted currency. Let’s break that down a little more. Encryption protects digital data and access. And example of double encryption is when you receive a code on your phone to validate your password you’ve already entered for a particular site, such as Amazon. You can read more about encryption in the book Bad Code where it also compares virtual hacks with mental hacks.
Block Chain is a worldwide system where a permanent record is created for every transaction. It is secure and traceable, but absolutely private. It’s a system of recording information to make it impossible or extremely difficult to change, cheat or hack the system. However, it’s slow-moving with transactions, so an increasing number of applications are available to solve this dilemma.
Two: How to Use Crypto Currency
Bitcoin is a type of digital currency, or crypto currency that is used on the blockchain. It is stored in a digital wallet. (see below) There are a specific number of bitcoin with only twenty-one million created and every transaction is recorded on the blockchain. It was created in 2009, and creates an instant transaction. There are computers that run 24/7 to mine or document every transaction.
Ethereum is an open-source blockchain, where you can write apps, and is the second most popular network after bitcoin. It’s digital money and is open to everyone. With an internet connection you can send, receive, borrow, earn interest and even stream funds anywhere in the world. You can also create smart contracts, which are traceable, verifiable and irreversible. Smart contracts can execute themselves when all criteria is met. 95% of decentralized transactions (DeFi), which is the largest category, are with Ethereum. (no single entity has exclusive control)
A Digital Wallet, or e-wallet is a software system that securely stores the user’s payment information for numerous payment methods. It’s like LastPass for digital currency. Digital wallets eliminate the need to carry a physical wallet. It’s very similar to payments made directly from your bank account.
Three: Privacy of Crypto Currency
Transactions on the blockchain are private but can’t be denied. As an illustration, if you purchase health care services, your privacy will be protected. But if something goes wrong with the purchase, the provider wouldn’t be able to hide the transaction nor the contract.
Blockchain means just that: it’s a chain of transactions you can trace back to the source. In certain situations it may take awhile but it’s still trackable. The justifiable fear is of losing or forgetting passwords. This is why having a secure password protection app in place is an absolute necessity. See The Future of Wallets below.
The beauty about digital currency is it’s immediate. If you wanted to exchange services in Japan or a second or third world country, you have immediate access with crypto currency. Normally this involves third-party fees and several days for the transaction. With blockchain, there is no fee and a transaction in less than five minutes with a permanent record.
Four: Future of the Dollar
Currently, the dollar is the world’s strongest currency. All the other worlds currency is relative to the dollar’s value, which is in turn relative to bitcoin’s value. The dollar will go up and down in value according to inflation (increase in cost) or deflation (decrease in cost). This principle has always been the same.
If a loaf of bread costs two dollars today and three dollars next week, the value of the dollar has gone down because it costs more to purchase the same product. Bitcoin provides a safe and permanent store of value.
Five: Application for You
You will be able to make global transactions any time of day or night with crypto currency. This will eliminate credit card fees for both seller and buyer. However, as entrepreneurs continue to work in the financial field, there will be applications like Coinbase, which is an app that makes it easy to buy and sell digital currency. Coinbase is a fee-based, centralized trading exchange. (controlled by a single authority) Just like many people are willing to pay for ease of use and convenience in other areas, the same is true for convenience with a crypto currency exchange.
Sources for Further Study
The Future of Wallets: A Look at the Privacy Implications of Mobile Payments A look from a legal standpoint.
Michael Saylor and Bitcoin MicroStrategy (video) which provides business intelligence, mobile software and cloud-based services.
Eric Wade Crypto Trends to Watch in 2021 (video) Stansberry Research Investment Analysis Bitcoin correction crypto prediction 2021 07 21 Eric Wade - YouTube
Global Macro Investor (video) Raoul Pal's Introduction to the Exponential Age - YouTube
VC Legend Bill Tai: The “New Era” of Valuations. (video) An expert in identifying exponential trends. He has been an angel invetor in more than twenty companies that have gone public, including Zoom and Dapper labs.
Alex Mashinsky, Celsius CEO, Alex Mashinsky Who Correctly Predicted 50% Bitcoin Drop, Now is Predicting ETH-BTC Flippening! - YouTube
You will be able to make global transactions any time of day or night
with crypto currency.
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