Disclaimer: nothing herein constitutes financial advice. Consult with a qualified financial adviser before making crazy life decisions about magic internet money. Don't invest anything you're not willing to lose.
Hi everyone. It's Tyler, your resident cryptomonger, here to help you probably not actually understand what the fuss is all about with crypto. The cryptocurrency market is currently valued at somewhere between $0 and $1 trillion depending on when you read this OP. What's Bitcoin? What's crypto? What does it matter? Let's try to find out with some Q&A, and then we'll get into ongoing discussion.
What's a bitcoin?
Technical answer: magic internet money.
For the lay person: using sha-256 cryptography and public/private key pairs and a distributed public ledger appended through mathematical puzzle solving that auto adjusts its difficulty depending on the average computing power of the overall pool to average out to finalize a new block of data about transactions occurring within the system every ~ten minutes, a decentralized, trustless, immutable, borderless, deflationary exchange of value has been established by an unknown party under the pseudonym Satoshi Nakamoto, but controlled via consensus of the network that has since been established.
Here's an 11 hour Princeton lecture series on how it all works.
Or I guess you could watch Andreas. He's cool too.
What are all these other cryptocurrencies?
There's a crypto for everything. The second biggest cryptocurrency in the world by market cap at time of this writing is Ethereum, which is also blockchain based and currently on a Proof of Work system similar to Bitcoin, but can do some interesting stuff like act as a platform for derivative cryptocurrencies using the ERC20 token standard (which is how most ICOs -- initial coin offerings -- are performed), execute smart contracts using the Solidity programming language, etc. There are well over one thousand currently circulating cryptocurrencies. Most will probably fail. Be careful.
What's the use case for all this stuff?
The possibilities are vast and are already being explored in many directions. By being borderless and potentially accessible to anyone with a phone, cryptos can serve to bank the unbanked, of which there are over 2 billion people in the world currently. Cryptos, despite their typical market volatility, can also be far more stable than some national fiat currencies, and can protect people in unstable nations like Venezuela from hyperinflation or arbitrary forfeiture. They can also give people in developing nations unprecedented access to the world economy. And, yes, millennials can also try to day trade it to get rich, and probably fail horribly but sometimes not and then they'll have a youtube channel about how smart they are.
Beyond that, blockchains have the potential to disrupt many existing industries and technologies by eliminating the need for a middleman. Imagine a rideshare service without an Uber or Lyft running it, just rideshare operators and rideshare users, a token traded for rideshare use with a value established by market forces, and a blockchain to track transactions and identities with associated reviews. That's doable. Concert tickets that can't be scalped? Doable. Smart contracts (properly audited) can also eliminate the need for escrow, by finalizing a transaction between parties only when specific mutual conditions have been met. Money can be blockchain. Identity can be blockchain. Contracts can be blockchain. Titles and deeds. You get the idea.
How does one buy a crypto?
Depends on where you are. In the States, Coinbase or Gemini can get you started with exchanging USD for Bitcoin or Ethereum. Then, if you want to get really adventurous, you can trade Bitcoin or Ethereum for a thousand other cryptocurrencies somewhere like Binance or Cryptopia. If you're in South Korea, you're probably day trading half your net worth in crypto already and don't need me to tell you what Bithumb is. Please don't jump in blindly, either way. Take your time, read, listen, watch, and learn.
Is it still possible to mine Bitcoin or other cryptos?
Mining bitcoin isn't profitable anymore unless your electricity is free or very cheap and you have access to very expensive ASIC miners, generally. However, other Proof of Work based cryptos have been designed to be ASIC resistant and can be mined for some decent profits on consumer GPUs and to a lesser extent CPUs. As of this writing there is actually a worldwide GPU shortage due to crypto mining. If you have a high end graphics card and want to heat your home in the winter with it, one of the easiest ways to get started is by joining a mining pool like Nicehash, which will automatically choose the most profitable mining algorithm for you at any given time and then pay out in bitcoin. Be mindful, though, since Nicehash was hacked recently and any mining pools or exchanges are prime targets for hackers to steal crypto from.
How does one safely hold onto crypto without being hacked or robbed?
There's not really any such thing as FDIC insurance for cryptocurrency yet, and crypto transactions are typically irreversible, so if someone takes yours you're probably not seeing it again. Protocols like Bitcoin are highly resistant to attack on the blockchain itself, but if you hold crypto on an exchange website or some smartphone app, you're likely holding it on someone else's private keys and not yours, so if an exchange or an online wallet gets hacked you could lose your crypto at any time, potentially. If you're playing around with small amounts you may not care about security much, but if your crypto holdings become significant, control your private keys. Consider a hardware wallet like the Ledger Nano S or Trezor if your holdings are significant. Use two factor authentication on everything. Be mindful of phishing urls and scams. Do your due diligence, always, and don't blindly trust anyone or anything on the internet about the crypto space.
Tyler, what are your crypto picks?
I'm not here to shill something I may or may not hold, or to get you to subscribe to a newsletter or some crap. I've found the world of crypto to be absolutely full of misinformation, shilling, scams, and schemes. I can offer some commentary and friend advice to my community to try to help everyone navigate this space, and some useful links. I follow crypto pretty closely, too, and I'm happy to discuss it in general with you all and do the whole forum discourse thing. We'll get into talking about all sorts of various cryptocurrencies as this thread goes, presumably.
Is the market going to go up or down from here?
Both. Whatever it is right now in hundred of billions of dollars of market cap is listed here.
This is the best knowledge repository I've come across for the crypto world. Yes, there's a whole lot to learn.
Fresh start for 2018. Governments are making their own, fortunes are rising and falling, Zuck's "investigating" it, and millions of people are dipping their toes in. Let's talk.
Hi everyone. It's Tyler, your resident cryptomonger, here to help you probably not actually understand what the fuss is all about with crypto. The cryptocurrency market is currently valued at somewhere between $0 and $1 trillion depending on when you read this OP. What's Bitcoin? What's crypto? What does it matter? Let's try to find out with some Q&A, and then we'll get into ongoing discussion.
What's a bitcoin?
Technical answer: magic internet money.
For the lay person: using sha-256 cryptography and public/private key pairs and a distributed public ledger appended through mathematical puzzle solving that auto adjusts its difficulty depending on the average computing power of the overall pool to average out to finalize a new block of data about transactions occurring within the system every ~ten minutes, a decentralized, trustless, immutable, borderless, deflationary exchange of value has been established by an unknown party under the pseudonym Satoshi Nakamoto, but controlled via consensus of the network that has since been established.
Here's an 11 hour Princeton lecture series on how it all works.
Or I guess you could watch Andreas. He's cool too.
What are all these other cryptocurrencies?
There's a crypto for everything. The second biggest cryptocurrency in the world by market cap at time of this writing is Ethereum, which is also blockchain based and currently on a Proof of Work system similar to Bitcoin, but can do some interesting stuff like act as a platform for derivative cryptocurrencies using the ERC20 token standard (which is how most ICOs -- initial coin offerings -- are performed), execute smart contracts using the Solidity programming language, etc. There are well over one thousand currently circulating cryptocurrencies. Most will probably fail. Be careful.
What's the use case for all this stuff?
The possibilities are vast and are already being explored in many directions. By being borderless and potentially accessible to anyone with a phone, cryptos can serve to bank the unbanked, of which there are over 2 billion people in the world currently. Cryptos, despite their typical market volatility, can also be far more stable than some national fiat currencies, and can protect people in unstable nations like Venezuela from hyperinflation or arbitrary forfeiture. They can also give people in developing nations unprecedented access to the world economy. And, yes, millennials can also try to day trade it to get rich, and probably fail horribly but sometimes not and then they'll have a youtube channel about how smart they are.
Beyond that, blockchains have the potential to disrupt many existing industries and technologies by eliminating the need for a middleman. Imagine a rideshare service without an Uber or Lyft running it, just rideshare operators and rideshare users, a token traded for rideshare use with a value established by market forces, and a blockchain to track transactions and identities with associated reviews. That's doable. Concert tickets that can't be scalped? Doable. Smart contracts (properly audited) can also eliminate the need for escrow, by finalizing a transaction between parties only when specific mutual conditions have been met. Money can be blockchain. Identity can be blockchain. Contracts can be blockchain. Titles and deeds. You get the idea.
How does one buy a crypto?
Depends on where you are. In the States, Coinbase or Gemini can get you started with exchanging USD for Bitcoin or Ethereum. Then, if you want to get really adventurous, you can trade Bitcoin or Ethereum for a thousand other cryptocurrencies somewhere like Binance or Cryptopia. If you're in South Korea, you're probably day trading half your net worth in crypto already and don't need me to tell you what Bithumb is. Please don't jump in blindly, either way. Take your time, read, listen, watch, and learn.
Is it still possible to mine Bitcoin or other cryptos?
Mining bitcoin isn't profitable anymore unless your electricity is free or very cheap and you have access to very expensive ASIC miners, generally. However, other Proof of Work based cryptos have been designed to be ASIC resistant and can be mined for some decent profits on consumer GPUs and to a lesser extent CPUs. As of this writing there is actually a worldwide GPU shortage due to crypto mining. If you have a high end graphics card and want to heat your home in the winter with it, one of the easiest ways to get started is by joining a mining pool like Nicehash, which will automatically choose the most profitable mining algorithm for you at any given time and then pay out in bitcoin. Be mindful, though, since Nicehash was hacked recently and any mining pools or exchanges are prime targets for hackers to steal crypto from.
How does one safely hold onto crypto without being hacked or robbed?
There's not really any such thing as FDIC insurance for cryptocurrency yet, and crypto transactions are typically irreversible, so if someone takes yours you're probably not seeing it again. Protocols like Bitcoin are highly resistant to attack on the blockchain itself, but if you hold crypto on an exchange website or some smartphone app, you're likely holding it on someone else's private keys and not yours, so if an exchange or an online wallet gets hacked you could lose your crypto at any time, potentially. If you're playing around with small amounts you may not care about security much, but if your crypto holdings become significant, control your private keys. Consider a hardware wallet like the Ledger Nano S or Trezor if your holdings are significant. Use two factor authentication on everything. Be mindful of phishing urls and scams. Do your due diligence, always, and don't blindly trust anyone or anything on the internet about the crypto space.
Tyler, what are your crypto picks?
I'm not here to shill something I may or may not hold, or to get you to subscribe to a newsletter or some crap. I've found the world of crypto to be absolutely full of misinformation, shilling, scams, and schemes. I can offer some commentary and friend advice to my community to try to help everyone navigate this space, and some useful links. I follow crypto pretty closely, too, and I'm happy to discuss it in general with you all and do the whole forum discourse thing. We'll get into talking about all sorts of various cryptocurrencies as this thread goes, presumably.
Is the market going to go up or down from here?
Both. Whatever it is right now in hundred of billions of dollars of market cap is listed here.
This is the best knowledge repository I've come across for the crypto world. Yes, there's a whole lot to learn.
Fresh start for 2018. Governments are making their own, fortunes are rising and falling, Zuck's "investigating" it, and millions of people are dipping their toes in. Let's talk.
. I’m just getting started but have made a few hundred bucks by sheer (dumb) luck and being forgetful and dropping $10 into it early and leaving it.
