Bitcoin Mania – The Rise of Cryptocurrency

bitcoin-symbolBitcoin Mania

So, you’ve may have heard about this Bitcoin thing all over the media? 

Unless you have been living under a rock these last few days, I am assuming you have. Cryptocurrency has been the top topic this year. Whether you are with family, co-workers or in the locker room gym, everyone is talking about Bitcoin and how they can invest in it.   

 

As of Dec 26, 2017, Bitcoin has rose to $16,026.0596.

 

The first day I heard about Bitcoin was back in 2011 listening to TWiT, a podcast network founded by technology broadcaster and author Leo Laporte, which talks about the latest tech, Apple, Google and etc. Leo mentioned that he just bought a few Bitcoins and it’s the future of digital currency. Looking back at it now, my mindset was nowhere it is today. In 2010 my focus was on tech, bodybuilding and figuring a way to go back to school to make additional income. Far from investing or entrepreneurship. I have come a long way. Note, this post may contain affiliate links. Please read our disclosure for more info.

Couple years later and it seems Leo LaPorte was right! Bitcoin has taken off and seems not to be slowing down anytime soon. But, before you go out and buy a Bitcoin let’s give you a quick backstory. For the past couple of weeks, I have been doing some research and binge-watching Netflix. I thought it would be great to share what I’ve learned from the independent film, Baking on Bitcoin, covering Bitcoin’s roots, it’s futures and its underlying technology.  

If you haven’t watch Baking on Bitcoin, I highly recommend that you do. I have learned so much from this documentary. This is an informative crash course about Money and Crypto Currencies. 

 

The Making of Bitcoin  

Physical Bitcoin coins do not really exist, it’s only digital. Before I understood what Bitcoin was, I assumed it was an actual coin. 

 

The first bitcoin was created on January 3, 2009, by Satoshi Nakamoto, launched a few months after Lehman Brothers went bankrupt and the whole system nearly collapsed (September 2008). 

 

“I’ve been working in a new electronic cash system that is fully peer to peer, with no trusted third party.” ~ Satoshi Nakamoto 

 

After cultivating the concept and technology, in 2011, Nakamoto turned over the source code and domains to others in the Bitcoin community and suddenly vanished. (Check out the New Yorkers of Nakamoto from 2011, The Crypto-Currency.)

 

Related Article: Time to Invest


The Era of Cryptocurrency 

  • CryptoUsing Digital Encryption                                  
  • CurrencyA System of Money  

If you want to look for the genesis of cryptocurrency, it was the cypherpunk movement, growing out of a kind of a love of the internet and its possibilities. This was the discovery of cryptography and imaging 

 

This was the birth of a new world out of the internet.  A world that lives outside of the nation-state, and outside the structures of power and the hierarchies that are associated with that.  

Bitcoin Mania - The Rise of Cryptocurrency
Cypherpunk Movement

 

The cypherpunks that emerged in the early 90’s, were hyper-concerned about privacy, about personal liberty. A lot of people had come up with their own system. Some of them which came very close to making it happen. One that probably came the closest was digicash from David Chaum 

 

Privacy and Payments are actually essential for democracy. The reason is not that you need to be able to make private payments in order to express yourself, but rather that in order to inform yourself, you may need to purchase information and that allows you to have opinions worth expressing.  

 

Some say David Chaum wasn’t a Cypherpunk, and he definitely inspired the cypherpunk movement. It’s if the cypherpunks kind of came upon David Chaum’s tools. They were most interested in the ones that could be used to disempower the government and empower individuals.  

 

The break between him and the cypherpunks came when he realized he would need existing institutions to help him with it, so he started talking to governments, he started talking to banks. He was very close to having this thing happen in the late 90’s. Nobody was really prepared for this thing to happen in the late 90’s, and nobody was really prepared outside of the cypherpunks movement.  

 

To people, it seems like they had almost sort of given up on the project. Other than a few experiments here and there, by Hal Finney and Nick Szabo. The conversation around this really died down. And then all of sudden it came back to life after the financial crisis, and you had people going back to those experiments in the 1990s and looking at new ways of putting those ideas together.  

 


The Comeback 

Nick Szabo, in 2006, had just finished up at law school, and around the financial crisis that is really revived his interest in these ideas that, he had been working in the 1990s with privacy and contracts and the problems of governments and other trusted third parties. He brought Bitgold back into the conversation.  

Hal Finney came up with his own system. Adam back has Hashcash, Wei Dai has B-money, Szabo has Bitgold 

 

So what Satoshi did in 2008, was Satoshi took a lot of these ideas and made them work. He created an encryption-based protocol and it’s not really a currency. Utilizing a ledger called the blockchain, allowing for many kinds of transactions to occur. Contracts, all kind of things can be built into the blockchain. It does this through a system of consensus-building where multiple computers all participate in the management of the blockchain ledger, a kind of digital document if you will, that keeps track of all the payments. Watch video below to understand the blockchain in two minutes.

The problem that cropped up in the crisis were very much a part of the writing of Satoshi Nakamoto. What the crisis showed the existing system had some major flaws. It wasn’t working and people were hungry for some sort of alternative.  

 

What is Bitcoin?

When you define money, it’s basically an account system a way to show who owns what and who owns what. 

Bitcoin is just an account system 

 

You need a third party when exchanging money. Someone who is the trustee to granted the money is real. For hundreds of years now we had government issuing money. 

 

Bitcoin Mania - The Rise of Cryptocurrency

Bitcoin is a way of recording traction and recording value and it does it in much of a way digitally so you and I can send it to each other directly and everything is recorded in the open ledger.  

 

By monitoring and updating that ledger in collective, consensus-based system you do away with the need for a middleman, some sort of repository of all the information (such as bank and government). This, in the end, allows you to omit the option of fees and any inefficiencies, ultimately preventing the potential for corruption and risk that come with centralizing bank information in that way.    

 

What it does is take away the trusted third party function and automates it? It places it into an open ledger that puts everything online, making it possible for anyone to see.  Every bitcoin is accounted for and you know that you’re not getting is a counterfeit bitcoin.  

 

The great thing about Bitcoin, it’s easily transferable, it’s anonymous and by 2140 there’s gonna be 21 million bitcoins. That’s the cap there is only x amount of gold and there is only x amount of bitcoin.

 

By 2140 there’s gonna be 21 million bitcoins. That’s the cap there is only x amount of gold and there is only x amount of bitcoin.  

 

Bitcoin really puts the control back in the hands of everybody.  

 


How do you know what you have left or what you’ve spent? 

You can have the money supply controlled by a computer. That’s all bitcoin really is.  

The key point here is that this is a distributed ledger. All ledger we have, all banking ledgers, all company ledgers, they all sit and reside inside that company, which means they have one point of attack. They can be hacked. JP Morgan was hacked by, you know, the cyber thieves not so long ago. Home Depot, Target, we’ve had all these companies get hacked because there’s one central repository of information.  

 

The Bitcoin ledger resides on, you know, thousands of computers which you cannot hack that. Once it is recorded in the blockchain, it is there, it is permanent. It cannot be altered, it cannot be changed so that you can read it.  

 

The identities of the people are encrypted. The wallets are encrypted, so you don’t know who is spending the money, but you know that every single bitcoin out there has a history, you know where it’s been, you know the different addresses it’s gone between.   

 


What determines the value of a Bitcoin? 

Bitcoin Mania - The Rise of Cryptocurrency There is no true value of Bitcoin, it is all demand and supply. High demand and limited supply make Bitcoin most valued in the world. it’s anonymous and by 2140 there’s gonna be 21 million bitcoins, so there is a limited supply. Without a government or central authority at the wheel, controlling supply, “value” is totally open to interpretation 

 

If you have watched the Facebook movie, you might remember the twins of former classmates of Zuckerberg. Who accepted a $65 million settlement from Facebook after claiming Zuckerberg stole their idea for a social-networking site they called ConnectU. Now the twins are worth over a billion dollars according to Fortune for their early investments in Bitcoin  



 


What is a Bitcoin Wallet? 

A Bitcoin Wallet is used to store money. Similar to your traditional wallet is used to store money. But instead of storing cash and credit cards, Bitcoin stores a collection of private keys. The Wallet is encrypted with personal passwords. Lately, you probably been hearing stories of people forgetting their password and cannot get access to their Bitcoins. This is the reason why. Keeping it, safe and secure setting strong passwords keeping it out of reach of malicious individuals.  

 

The first thing you do before buying a Bitcoin, you need to purchase a digital wallet. You can use an online account to open a Bitcoin wallet and check for investment. 

 

Bitcoin hardware wallets are known for being the most secure but are the most expensive, they cost money. If you are serious about securing your wallet invest into a hardware wallet. 

 

Why are hardware wallets are known for being the best for security?  

  • Easiest way to securely store bitcoins 
  • Easy to backup and secure 
  • Less margin for error; setup is easy even for less technical users 

 

The three most popular and best Bitcoin hardware wallets are:

Trezor Bitcoin Hardware Wallet

 

Here the different types of wallets     

  • Online bitcoin wallets. Wallets that can be accessed on the web from any internet connected device. Best and secure online platform is Coinbase.
  • Bitcoin hardware wallets (Most Secure). Physical devices designed to secure bitcoins.  
  • Software wallets. Wallet applications downloaded to your phone, computer or tablet.  
  • Paper wallets. Bitcoin private keys printed from an offline computer. 

 

 

Beware – Each day, new Bitcoin scam wallets are added to the Apple App Store and Google Play Store that are designed to steal people’s bitcoins. 

 

With anything we mentioned or talked about on this blog, we always recommend that you do your own research before investing your time or money in any business decision. This is no different! Before purchasing any form of digital wallets do your own research. 

 


What can I do with Bitcoin? 

You can do different things with Bitcoin. Because of its popularity, you can attempt to buy them low and sell them high. You can also use Bitcoin for ethical services. Bitcoin Magazine offers a long list of options. This includes everything from gift cards, music downloads to clothing.  

 


What are the risks? 

We are at a modern-day gold rush. You can look at Bitcoin as a get rich quick buck. When you look at Bitcoin as a quick dollar, you will get punished. Just as fast you were able to attain you can also lose your money just as fast. People are taking out mortgages to buy bitcoin, says securities regulator according to CNBC. To me that insanity. What is happening now with Bitcoin is in the “mania” phase. Bitcoin has been soaring all year, starting out at $1,000 and rocketing above $19,000 on the Coinbase exchange last week. 

Tulip Mania
Tulip Mania

 

Is this a bubble? Yes. Bitcoin can turn into one of history’s biggest busts since Tulip mania. But, that doesn’t mean it won’t be a great investment in the long term. Digital currency is real and isn’t going anywhere, blockchain is here to stay. Whether it is bitcoin or not.  

 

“We’ve seen mortgages being taken out to buy bitcoin. … People do credit cards, equity lines,”

said Borg, president of the North American Securities Administrators Association, 

 

“This is not something a guy who’s making $100,000 a year, who’s got a mortgage and two kids in college ought to be invested in.” 

 

“You’re on this mania curve. At some point in time there’s got to be a leveling off. Cryptocurrency is here to stay. Blockchain is here to stay. Whether it is bitcoin or not, I don’t know,”

Borg said in an interview with “Power Lunch. 

 

You don’t want to look at Bitcoin as fast money get rich scheme, but instead look at it for a long-term investment. In 10,15,20 years from now, you can reap what you sow. By investing now, you will be creating a generation of millionaires or even billionaires because you played the long-term game and leave a legacy for your children or grandchildren.  

 


Are there other cryptocurrencies? 

Yes, and there are hundreds of cryptocurrencies. According to Wikipedia, there are over 1,324 and growing. Cryptocurrencies can be created at any time. The largest blockchain networks Bitcoin is Litecoin, Bitcoin Cash, Zcash, Dash, Ethereum, and Ripple.  

Bitcoin continues to lead the pack of cryptocurrencies, in terms of market user base, capitalization, and popularity. 

 


Should I invest in Bitcoin or any cryptocurrencies?

Bitcoin Mania - The Rise of Cryptocurrency Disclaimer: Investing in Bitcoin or any cryptocurrencies are risky. You should do your own research as this is an investment. We do not recommend investing money you can’t afford. We’re here to give you our perspective on it. We’re not experts on the topic. Much of this information was learned from the independent film, Baking on BitcoinPersonally, we see Bitcoin as a risky and unstable investment to make, as the government has yet to regulate it. That being said, we do feel that there is a place in someone’s investment strategy for more risky investments that have the potential for a very high return or reward.  

 


 

Conclusion

As we continued to learn more about Bitcoin we want to share with you, our audience, with much more Bitcoin contents through or blog. We will dedicate a page just to Bitcoin topics, so stay tuned. Too many people look back and say, man I wish I invested in Apple, Google, Amazon, Real Estate and etc. This is a way to get in while you still have the opportunity. This new wave of technology can be a way to build wealth and a legacy for future generations to come. In the words of Warren Buffett, one of the world’s most successful investors of all time, “Someone is sitting in the shade today because someone planted a tree a long time ago.” Make smart investments and build the financial foundation. 

 

 

Ready to Join the Cryptocurrency Community?

If you ready to join the Bitcoin community and ready to invest, we recommend to start with a trusted secure online digital currency platform. Coinbase is a secure online platform for buy, sell transferring, and storing digital currency.

We use and started with Coinbase. Very easy to use and the most trusted in the Bitcoin community.

 

Here is video below about the history of Coinbase.

 

 

Like this post? Please help us pin it!

Bitcoin Mania - The Rise of Cryptocurrency

What do you think about Bitcoin Mania – The Rise of Cryptocurrency? Please leave a comment below.

To learn more about Bitcoin you can check Bitcoin Academy where you can learn the information to help you nevigate the world of Bitcoin.

To learn find out about the Cryptocurrency Market Capitalizations click here.

 

If you ready to join the Bitcoin community and ready to invest, we recommend to start with a trusted secure online digital currency platform. Coinbase is a secure online platform for buy, sell transferring, and storing digital currency.

We use and started with Coinbase. Very easy to use and the most trusted in the Bitcoin community.

 

Please leave us your feedback or a comment as we appreciate our audience, Thank you again for reading this post.

Until next time, Happy Reading!!

Please be sure to follow us on Twitter | Facebook | Instagram

 

 

Facebook Comments

comments

Follow Melissa & Rodney Diamond:

Entrepreneurs

Hello there! We are glad to see you’ve stumbled upon our little slice of the web. We hope you take a look around. Through this platform, we want to share experiences of entrepreneurship in hopes that it will motivate and encourage others to dream big, reach for the stars and follow your genius. We don’t consider ourselves gurus, our information is not secrets and the kinds of things we teach are not “get rich quick” schemes – far from it actually. Honestly, most of the information we could give you can be found for free here on our blog or elsewhere online.

Leave a Reply