Hi folks,
My Nephew recently asked me to help Him buy a little Crypto Currency!! (Yea - another convert!!!) I don't know what prompted Him to take "The Leap", maybe something I said? Anyhow, He's completely unfamiliar with Crypto's and I thought I'd post something for him with a few basic thoughts.
Bob, (I'll call him Bob lol) there are many, many different Crypto Currencies. Some really haven't a snowball's chance of being worth anything in the long run, and some will soar! You're reading this "Blog" on a platform called "Steemit". I personally believe Steemit will eventually grow and take over FaceBook, Reddit, and some other Internet "Social Media" sites for several big reasons.
No Corporation controls Steemit. You are free to post what you want, and there is no one to censor it!!! Whether anyone sees it... Is entirely up to the Community that exists on the Platform. Post good stuff, and it will do well. Post crap, and it will fail (Dragging you down with it.)
Steemit uses a crypto currency called Steem. a certain amount of this currency is automatically generated (conjured out of computer bytes and bits somewhere in the World) over time. When you post a "Blog" or Upvote and comment on someone's else's blog a certain amount of the new currency becomes yours. Unlike US Dollars which are supposedly backed by the "Full Faith and Credit" of the US Government, Steem is backed by the vast amount of knowledge found on the site. I think I posted a comment over on FakeBook the other day about how the Dollar is worthless. It's backed (again) by the full faith.... How much faith do you have in Congress? and credit of the Gubernment. Here's the US Federal Gubernment's credit situation
This is as of 07-22-19 at about 2:50am. Central time. It's important for me to give you the exact time, because the numbers are climbing so fast that Tomorrow they will be completely different.
In short The United States Government has NO faith and credit to back it's money with!!!
By far, the "Mack Daddy" of Crypto Currencies is Bitcoin!
This picture is misleading, because Bitcoins only exist on computers.
Bitcoin (And Steem) rely on a "Peer to Peer" network of Computers to exist on. If you buy some part of a Bitcoin the transaction is simultaneously noted on perhaps a thousand computers. (Simplified for beginner's sake.) There's no ONE authority over them. No one can control them. Unlike the Dollar where the Federal Reserve can destroy the value of the money... Crypto's are just here (And there, and everywhere.) Governments CAN ban their use, they CAN issue threats of violence if you're caught using them, and they CAN shut down the exchanges (The computer providers that facilitate transactions.) Governments CANNOT manipulate their true value. They CANNOT take them from you (Without a secret key, or password (s) only you have.) They cannot look at the network (Called a block chain) and see who is buying what. Your identity is private.
Much of what you see on the Mass media is about the value of Bitcoin in US Dollars. As I said above, I believe Dollars are worthless. Their true value is zero. They are a "Fiat" currency, which means they aren't backed by anything. I told you what I believe Steem is backed by, and Bitcoin is backed by scarcity. Baked into the cake (Recipe) of Bitcoin is an algorithm that limits the number of Bitcoins that will EVER be created (I think I remember it's 24 Million, but I'm old and can't remember shit.)
Anyhow, I like to think of Bitcoin not in value compared to Dollars, but in what I call the "Dozen Eggs" exchange rate! How does the value of Bitcoin relate to real goods and services. As the price of Bitcoin goes up and down as expressed in Dollars.... the number of venues Worldwide where you can buy real goods and services is skyrocketing!!! In the past couple of months the number of retailers that accept Bitcoin has grown by about 25%!!! At that rate, in just a few years there will be MILLIONS of places where commerce can be transacted in Bitcoins. You can already buy a cup of coffee in NYC, or a lap dance from a Las Vegas Stripper with Bitcoin. This is because as a currency Bitcoin is a better product!!! It can't be traced to you (Try that with your debit card.) It's "Penny" is called a Satoshi. You can buy just one Satoshi online. You can rely on the fact that the Federal Reserve can't manipulate it's price.
Few people understand that if you put Dollars into a bank account (By Law) you've just made a loan to the Bank. It's not your money anymore. the Bank can refuse to let you have access to it. If the Bank goes under... You're out. This isn't true with Crypto's!!! Plus, if the Gubernment asks... The Bank will simply hand over your transaction history! No Passwords needed.
So ""Bob"" buy whatever crypto you can afford, and are willing to risk. Buy whatever kind you want. (you can spend Bitcoin at over 15,000 places, and you can convert Steem and other cryptos to Bitcoin pretty easily.) I personally own some of 3 different cryptos right now.... Along with some physical metal (Gold or silver.) ( A Gubernment agent reading this doesn't need to know what, how much, how I got it, or where it is.)
Just begin to understand that every Dollar (yen, Peso, Euro, whatever fiat money) you earn is actually worthless!