cryptocurrencyThe first time I heard about crypto and Bitcoin I rolled my eyes like many others have done. “It won’t last,” I said. “How can you have a currency that isn’t backed by anything of value?” That was a few years ago when it was possible to mine Bitcoin for low cost on a PC. As the price rose I would say, “I guess I should have mined or bought some but it’s going to crash, so too late now.” The price continued to rise and I never questioned my decision not to invest in it, because, I knew the bubble would pop and it would all come crashing down when people realized it had no actual value.

Earlier this year, the price reached just under $20 thousand dollars for a single coin. People are making YouTube videos showing the Lamborghini they bought with money made from mining Bitcoin back when it was cheap. A few thousand dollars invested then, and I would be a millionaire now. So, over the past few months the price has dropped from that high to just under $10 thousand dollars. So, I have decided to dabble in cryptocurrency and see if it is still possible to make a bit of money, and to learn a bit more about it and figure out of it is the way of the future or if it will come crashing down as I initially thought it would.

Crypto Step 1:

If I was going to get involved in cryptocurrency I should learn something about it. I went to a few websites to read up and downloaded a few podcasts. Of the podcast the one I found the most useful is Crypto Cousins. They do a good job of explaining cryptocurrency to those of us who aren’t super geeks about it.

The way I think of it is, it is a digital currency without a physical asset. A Bitcoin is worth the same amount of Bitcoin anywhere in the world. Of course, the dollar or euro value of that Bitcoin will change, in the same way that the yen to dollar exchange rate changes as markets fluctuate. Digital currency such as Bitcoin are limited so that when people have mined them, there will be no more. This creates the value, that some people will have something others won’t, even though that item is all digital.

There are thousands of digital currencies out now as others try to get on the bandwagon but those are all valued against Bitcoin so that is the one to focus on and learn the most about. Plus some businesses are taking it as payment along with traditional currencies. Some companies are trying new ideas on using cryptocurrency as a rewards program. They have the idea that instead of “likes” that Facebook and YouTube have, which don’t amount to much, that a thumbs up, tweet, or social share would amount to a value of cryptocurrency instead.

Crypto Step 2:

Now that I have an idea of what cryptocurrency is, how do I get some? This involves exchanges, wallets, and mining. Stay tuned as I sign up for an exchange or two and get myself a digital wallet.

Part 2: Coin Exchanges