BitCoin and Cryptocurrency 101

Level Up: Invest in yourself and increase your human capital! Part 1-of-3: Cryptocurrency & BitCoin 101: A beginner’s guide to everything you need to hit the ground running safely and efficiently with cryptocurrency. Subscribe to Level Up: Human Capital™ via iTunes, Google Play, Stitcher, TuneIn, SoundCloud, or any other major podcast directory.

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Before we get into things, I wanted to take just a second to talk about the idea behind and the aim of this podcast and blog. Human Capital is best defined as the knowledge and skills that every individual possesses. In my opinion, this is the easiest-to-increase, and greatest asset a person can have. My aim with this series is to share unconventional wisdom and how-to’s to help you invest in your own Human Capital and increase your value as a person.

Okay, now that you know more about the overall goal of this show, let’s get into the first series: Cryptocurrency and BitCoin. On a recent episode of my other podcast Politically incorWRECKED, my co host Matt and I discussed the recent phenomenon of people in Venezuela turning to Memes embedded with cryptocurrency to make purchases in their Socialism-ravaged country. After the episode aired, I was overwhelmed with requests for more information on the topic and instructions on how others could partake, which is awesome. But, before we can get to that, we need to take a step back and understand the basics of BitCoin and cryptocurrency, as well as how to effectively and securely buy, manage, sell, and store it. So, this series will consist of three episodes. First, Cryptocurrency & BitCoin 101 – which we will cover today, then a second episode for those brave enough to venture further, explaining the process for successfully converting, embedding, and selling memes for cryptocurrency. Then finally, we’ll finish things out with a brief overview of the “darknet” black market of the internet.

Alright then, let’s get started – shall we? So, I’m sure you’ve heard of BitCoin, right? Who hasn’t by now, given the giant boom over the last 6-8 months. But what exactly is BitCoin? For the general public, I’ve seen a ton of people refer to cryptocurrency in general as BitCoin, which is misleading. Kind of like calling all facial tissues “Kleenex,” when that’s really one brand or type.

 

Cryptocurrency

A decentralized, semi-anonymous, digital currency that allows instantaneous payments between two or more parties located anywhere in the world.

 

BitCoin (BTC)

One of the original forms of cryptocurrency, and easily the most recognized and popular version to date. BitCoin is based on Blockchain technology, and is used as the standard baseline for all other cryptocurrencies also based on the Blockchain.  

BitCoin boasts some big advantages, including:

  • Lower fees
  • Faster transfers
  • Transparency
  • Anonymity potential

Every transaction is recorded on a public ledger called the Blockchain, which means that transparency is inherent in BitCoin and fraud is virtually nonexistent. Without banks as middlemen, transfer fees can be extremely low, typically less than 1%, and funds can be transferred in minutes.

BitCoin is created through a process called “mining.” I don’t mess around with mining too much, having missed the initial boom (and being time constrained), but if you’d like to learn more, visit bitcoinmining.com to learn more.

 

The Blockchain

The blockchain is the public ledger on which every transaction is recorded, verified, and posted. It is the technology that underpins the network and allows for “trustless” transactions.

Great five-minute video: http://animalventures.co/

 

Choosing a Wallet, Mobile vs Desktop & Encryption Needs

Now that you’ve familiarized yourself with the basics, it’s time to make some big decisions. Before you can actually make your first purchase and hit the ground running, you’ll need to ask yourself a few questions and evaluate your wants and needs.

    • What is your primary goal for using BitCoin?
      • Are you simply wanting to invest in non-fiat currency?
      • Do you just want to play around a bit, diversify, and check things out?
      • Are you looking to make illegal purchases online? (No judgement, more on that later.)
    • How worried are you about your anonymity?
      • Do you want to leave less-trackable data?
      • Analyze the legality of your planned activities. The sketchier the transaction, the more security you should invest in.
    • Do you have a VPN service? Would you be willing to get one?
      • If you’re cheap and don’t want the extra expense, and aren’t going to do anything illegal, mobile is DEFINITELY the way to go. Mobile wallets are more secure than desktop ones by default, and if you disconnect from WiFi to perform transactions over cellular data, more data is naturally encrypted to better protect you. Avoid public WiFi’s to keep your wallets secure.
      • If you’re going to do anything illegal, I would still recommend mobile wallets (it’s just what I prefer) but you should invest in a solid VPN to mask your IP and encrypt all of your data (Great deal on a top-five service at an unbeatable price).
        • If you STILL don’t want to get a VPN but REALLY need to buy a gun or some weed online anonymously, then the TOR Browser is an ABSOLUTE MUST. (Even if you have a VPN, running that in tandem with the TOR Browser just increases your security and privacy)
  • *Security Tip: Switch to the DuckDuckGo search engine for all illicit activities.
  • *Security Tip: Set up a new, secure email solely for your cryptocurrency accounts. Yandex is the best option in my opinion.

Okay, so have you landed on what your aim and needs are here? Good. If you’re using CoinBase to make your initial investment, or don’t plan on branching out and diversifying with other cryptocoins, just go with CoinBase – it’s the most popular BitCoin and Ethereum wallet/exchange. If you’re going to diversify, go with Jaxx – it’s my personal favorite and has ShapeShift built right in, so you can exchange certain coins in the most time-efficient and cost-effective fashion. (Monero (XMR) is used for more nefarious purchases because of it’s extra level of security. Use this wallet)

 

Where to Buy BitCoin

BitCoin can be purchased from exchanges, such as: CoinBase, Circle, BitStamp, and WeSellCrypto. Each has it’s pros and cons based how you’re purchasing the BitCoin, what the fees are, how long you’re willing to wait, etc. My personal favorites are CoinBase and WeSellCrypto, depending on what I’m doing and how quickly I need the BTC.

Before BTC can be used for purchases, you need to make an initial investment. If you’re using CoinBase, depending on what kind of debit or credit card you have, you may have to settle for the bank account option – which can take 4-5 days (or more) before you receive the BTC. If this is the case (and you don’t want to wait) you can use WeSellCrypto to purchase BTC (and a few other coin types) with a PayPal account. They do take a bigger cut than most (about 15%) but it’s worth it for the speed and ease of the transaction.

 

Transactions

Every currency, in each wallet type, has it’s own “send” and “receive” addresses that are long alphanumeric codes that should be copy-and-pasted exactly, and never saved, as they change per transaction for your security. Most mobile wallets also utilize QR Codes for easy scan-and-go transactions.

 

Cryptocurrency Markets and Exchanges

Now that you have some BitCoin burning a hole in your digital pocket, it’s time to do something with it! Whether you’re just looking to diversify, need a specific currency for a purchase, or want to hop on the hottest growing coin to make a quick buck, there are numerous ways and sites to facilitate your needs.

If you’re using CoinBase, you can exchange BTC for ETC or convert it back to regular fiat currency. If you’re using Jaxx, you can use the built-in ShapeShift to exchange between the supported currencies with minimal fees. FreeWallet’s XMR app also allows you to instantly convert and exchange Monero for BitCoin and others.

Sites like our sponsor Bittrex, as well as Bter, are really reliable, secure, and fast exchanges for purchasing an insane amount of different cryptocurrencies, with super low fees. If you’re mobile, CoinCap is my favorite app for watching the market and making quick purchases or sales.

 

Where to Use

BitCoin is now widely accepted by many stores and companies throughout the world. From Microsoft to Overstock, an option to pay with bitCoin is becoming increasingly ubiquitous. Typically, these companies present the BitCoin logo at checkout to make shoppers aware of this option.

In addition to the retail, above-board side of things, there is a nearly-endless amount of people and places willing to accept cryptocurrencies as payment online. From things as simple as hiring offshore work, to the more illegal activities that usually come to mind, BitCoin and its sub currencies aren’t going anywhere.

That’s where we’ll leave things for now, I really hope this helped you to have a better understanding of cryptocurrencies and BitCoin, as well as hit the ground running with your own portfolio. Stay tuned for the next installment, where we will delve into embedding cryptocurrencies into memes and selling them for profit.