Little Background for specially those who are new to the world of cryptocurrency:
What is Bitcoin? – A digital currency which keeps its registry book on the web in the files called block which creates a chain called blockchain and which is not governed/controlled by any third party. Your money is your money, you own it and you solely control it. If you have ever downloaded or streamed movie online using P2P service, Bitcoin is basically using similar system to generate money/coins and store transaction information worldwide.
Where is the value of Bitcoin? – Well, this is difficult to answer. Because value of something is in the eye of the person who is judging. Where is the value of a flower like rose? What is the value of a painting by Picasso? What is the value of a paper which says 10 dollar or 10 rupi and then the name of the government, which we call cash that we keep in our wallet that we use in restaurants? – Where does a paper get a value? What’s the value of a PhD certificate? What’s the value of any paper that you can torn down in second?
So… there is no value if you or significant portion of the population don’t give it a value. And in a society, we build trust, we maintain relationship (social/financial) to create value. I can ramble on Value day long but I hope you get it through the analogy. Bitcoin and other crypto currency project will thus have value if a lot of people trust in it and use it because it make life/business easier, bring new idea to the world.
Why does it called cryptocurrency? – Because online security depends on cryptography (a field of computer science and security) and cryptographic proofs/protocols.
How many cryptocurrencies are there? – More than 3000. Why? – Coz Bitcoin and most other cryptocurrency’s codes are open source, so anybody, even you just can copy it and create your own coin if you know programming. Therefore, most of the crypto-currencies can not be trusted and we need to have cautious eyes.
Which are some of the reliable currencies? – The top 100 crypto currency from coin market cap can be taken seriously.
What should I look at when I look at these crypto coins? – How long they survived, how is the total market capital, how much is the 24 hour volumes(how much trade is happening every day), who is behind that currency?
Why should I buy in? – Simple answer, if you want to make good investment, there is a lot of opportunities in crypto currency space.
Why do you think so? Lots of crypto currency projects are very innovative legitimate startups backed by big institutions which are trying to solve real world problems like how to lend money in Africa, how to deal with inflation in Argentina, how to send money 24/7 at any point to another point across the world, how to reduce the power of central governments, how to use distributed web to reduce costs?
The bottom line is this space is just like internet back in 90s, only few people knew and had information. So, if you have the correct information and challenging mindset and invest into the right project, you can get rich, a millionaire, billionaire or a trillionaire. But if you are stupid, you can lose your life savings, get hacked and that’s why you need right and valuable information. So, no risk, no gain. Just imagine, if you would have invested in Facebook back in 2000, you would be so happy today, isn’t it? Because if you are reading this, you are on facebook that didn’t exist before 2000.
Okay, I understand Bitcoin but what is the purpose of other cryptocurrencies?
Type 1- Money:
Firstly, What does Bitcoin do? It keeps a registry book of information about who bought or sold what to whom at what time and where? Banks make money by giving you credit/debit card and maintaining these information, but Bitcoin keeps them securely on the web in a system called Blockchain.
Okay, you got the basics then. Now, there’s a lot of clones, like how many languages in this world- english, spanish, bengali… I can’t count. But as you know with all these different languages, everywhere we just express our thoughts and feelings and imaginations. So, every language comes with its own flavor, grammar, scripts but fundamentally they are a medium of exchanging information from one to other..
Therefore, Bitcoin also have variants, thousands of other coins cloned from bitcoin. Just like I love Japanese, but my friend like Chinese, people also like one crypto over other for their own flavor or business association.
Name some coin: Litecoin, Peercoin, Prime coin, Dogecoin etc.
Type 2- Smart Ideas/Business (Wide bracket):
Now, some other people thought, wait.. why only the information of buying or selling goods.. How about I keep legal documents like my home ownership, my car deals, my copyrights, other contracts using similar distributed blockchain Bitcoin use. Right now we use lawyers, government registries- trusted authorities to take care of them. That’s when the idea of smart contract arose. Using cryptography, it’s possible to keep these information (partially or full) on the web securely in a way so that only you or relevant people will be able to open. So, this is how other crypto-currency ideas are born. The second biggest cryptocurrency Ethereum is basically smart contract. Ethereum itself has a programming platform, it’s kind of like Apple App store or Google Play store for android, where developers submit apps based on their cool ideas.
So, in short, Ethereum, the second biggest crypto coin provides a platform where other crypto based innovative coins/ projects can be hosted. What are some cool projects? – Distributed matchmaking, distributed social network like facebook, distributed crowdfunding, you name it.. just like how many apps are there on App store? If there is a legitimate service you can come up with and you know that there’s a market for it, you can create a coin. Business 101.
Name some other cryptos: Qtum, Omisego, Cardano, Neo, Nxt, Nem.
Type 3 (Privacy Coin):
Now this is where it becomes very very mathematical. Bitcoin, ethereum these are not private. What does it mean by private? Meaning, what if I want to hide my information, I don’t want hackers, government to track where I spent money, how much I sent someone in India? Oh.. you didn’t know that you have been tracked? Did you? Well, now you should know then.. that every time you swap your credit card, every time you buy a ticket, every time you make a phone call, your government, authorities have the ability to know where you are, what you are eating, with whom you are hanging out, how much money you have and they can then tax it? Well, if you are an honest good person doing no bad, you probably don’t care? Or do you? I hope you have heard the arguments of Edward Snowden. Well, anyway, if you are not an anarchist or a social reformer or a libertarian or whatever.. you probably don’t care. But those people care about their privacy.
So, how do you hide your ip address, how do you mask your money? That’s where comes the power of mathematics, that’s where comes the use of Privacy coins.
So, what are some privacy coins out there? – Monero, Zcash, Zcoin, Verge.
In fact, you should buy Verge now.
There are also other types of coins which try to improve obscure technical limitations of other coins.
2018 is coming.
Join our Facebook Group to learn more:
Blockchain/Bitcoin SCET (Science, Crypto, Econ & Tech) Thinkers
“This is a group for anyone interested in Science, Research, Finance, IT, Decentralization, Democracy with the use of Blockchain technology. Bitcoin and other prominent crypto-currency provide it all. Bitcoin and crypto-currencies with the revolutionary blockchain technology gifted us decentralized money, smart contract, financial instruments accessible by everybody from everywhere. The success of decentralization in Bitcoin/Crypto space showed us the power of consensus based mechanisms and systems which can solve problems in various arena of our society. This group/meetup will try to provide a platform for enthusiasts to share ideas, brain storm and understand better about the new Crypto world. We are primarily located around three universities in the midwest: Purdue University(PU), University of Illinois Urbana Champaign(UIUC), Indiana University(IU) but we welcome everybody interested. But we want our user to be active participant rather than to be passive observers. Please join, learn and share your views with us. ”
So, the sole purpose of this group is to share information and be smart and probably be rich if you want to. But we don’t like rich, arrogant, assholes, so you need to be polite and intelligent. Good luck.