if you’ve been on the internet for quite some time, you’ve probably already heard about cryptocurrencies like bitcoin and maybe to some extent nfts. But what in the world do all of these mean?
Are these the next big currencies? Well in this video we’ll be finding out welcome to modern, well, where we talk about tips and tricks to have you go from crypto newbie to crypto genius. Generally, there were two stages of money. First, with trading, then, when currency finally blew up, i think we all understand trading where we give something to someone in exchange for something we want that they have in stage two points were all the rage because they were made of precious materials like gold and silver.
Everyone just accepted that they were worth something now you’ve heard of the british pound right. Well, the reason they’re called pounds is because one pound literally just used to be one pound of silver, then all of a sudden in a trade it doesn’t matter. If you don’t want my cat as long as i have coins, we can still trade for your horse, even if it doesn’t have any use at all for the silver, because it’s a precious material. You have that reassurance that you can take. That point. Give it to someone else and trade for something that you do want convenient right. Well, it doesn’t stop there.
Eventually, this whole process evolved to stage three where banks became established and governments had control over finances. We realized that, as long as there was trust in the system, we could move away from needing to carry blocks and blocks of precious metal towards something even more convenient. Like paper money, it still does the same thing, but now the money doesn’t have as much value as something like say: native pure silver. It just has value because the government says it has value like this 10 bill in the u.s. Really.
This is just a receipt sort of like a kind of proof that you own a certain amount of money, but as technologies improved, we found even more convenient ways of storing and training our stuff.
We’Re now in what i would call stage four, where more people than ever are buying things online and using credit cards truthfully when you’re. At this stage, we don’t see our money anymore, it’s not about points or notes, or cats for trading. It’S just entries on a spreadsheet like when i buy a music album from amazon, for example.
All that’s happening is that my bank adds an entry in my spreadsheet that says i now have ten dollars less then amazon’s bank adds an entry that says they have ten dollars more now you might be asking what was the point in me telling you all of This well it’s to give you context on where cryptocurrency sits, it’s seen by many people as the most convenient era of exchange ever and when you think of stage five, the word cryptocurrency will probably be its headline.
The way to think about a cryptocurrency is that it’s 100 virtual. I know the logo for bitcoin kind of looks like a festival coin. I mean it really is a bit of a coin now, but with crypto there it is no gold or silver or paper. It really is just the transfer of digital assets. The core concept is exactly the same: think of them as literally just running spreadsheets of use paid one to who, but instead of multiple banks keeping their own separate records with crypto. There is just one enormous spreadsheet of every transaction meet using that currency.
This is called a ledger so now that we have a good spreadsheet, what’s all the fuss about? Why is everyone going crypto crazy? Well, there are some distinct advantages to a currency system like this one for one, it’s decentralized, which means that, while our transaction of a given cryptocurrency, it is all recorded on the same ledger, where there are many many copies of that ledger. Anyone who is a part of the network has one now you might have also heard of cryptocurrency mining or bitcoin mining.
All that it is, is someone who set up a computer to crunch through transactions on their copy of this ledger are spreadsheet. There are already about a million bitcoin miners around the world, and bitcoin is just one type of cryptocurrency.
The reason they’re doing it well is: if you dedicate your computer’s power to mining, something like bitcoin, then you will earn some bitcoin as compensation.
The result of this is that if i go into a store and spend five bitcoins on something, then, instead of just checking with one bank’s records, the shop instead checks with every single computer on this network. If i have enough in assuming i do, each computer will give the go-ahead and that every single one will update their records independently. Since you end up having this many copies of exactly the same ledger, it becomes very easy to tell if anyone’s trying anything fishy.
For example, if i try to hack into someone’s computer and give myself more money by adjusting figures on their copy of the ledger, that’s going to reflect on the network. It’S not going to get through and the system will realize that 99.9 of the copies on the ledger are saying one thing, but one of them is saying something completely different.
The only explanation would be that it must have been tampered with, there’s very clear organization to the system and i think people believe in it because they see the future as open traceable transactions, much more so than having like some bits of the record over time. I understand that it might seem complex at this point, but as we go through this, i think you’ll realize that for a lot of people it’s way simpler.
There are plenty of areas in the world that have internet access, which is all you need for crypto at, like with banks, if you don’t have access to traditional banks, which require a lot of paperwork and documentation, you’d be in a tight spot, financially. I’Ve already kind of applied this, but the main perk of crypto is that you don’t need max anymore, because everything is stored by the people on the ledger. You can make international payments almost instantly instead of it taking half a day with no spending limits. Plus you don’t need to worry about exchange rates or interest rates. Even transaction fees are close to zero for some cryptocurrencies, but this is where the real fun begins.
The reason that cryptocurrencies are called cryptocurrencies is because they’re secured by cryptography one example of this, which a lot of the major cryptocurrencies like bitcoin use is blockchain.
Now people often get confused by this just know that blockchain is not bitcoin. Blockchain is not a currency itself. Just a secure type of ledger, so you know that big spreadsheet, that everyone has which records transactions well blockchain is just a way of organizing it. Funnily enough in two blocks. Every time i pay for something with bitcoin, that transaction is recorded as a block. Each lock contains transaction data like who was paid and how much the hash was. A hash is basically a unique identifier, the hash of the previous block in the sequence or the last transaction that was recorded and the pivot on which this system rests.
Is that if something in a block has changed, then that block’s hash will change?
You might be starting to see where this is going, because each block also contains the data of the previous block. If the hash of the block here changes, then the next block will no longer have a matching hash with it, and so every subsequent block, after that one becomes invalid. So if you combine this with what we talked about earlier, the whole idea of a million different users all having their own copy of the blockchain ledger, isn’t completely out there and if i ever wanted to fraudulently create a transaction that paid me money.
I’D have to not just tamper with the block and every single block after it, but i also have to do this on at least half a million computers around the world. This is so that the majority of computers and the system are also consistent with the one i’ve tampered with. It seems like a stretch, and it’s probably not gon na happen, whereas just hacking to someone’s dollar account and sending myself money could probably happen. I mean sometimes it’s as simple as just literally guessing someone’s six digit pin, but there’s a massive jump between that and trying to hack into 500 or so ledgers.
Cryptocurrencies definitely have their issues which i’m going to get to in a bit.
But hopefully you can see why some people are excited about them, which brings me on to investments at this point. You’Ve probably heard of people putting money into cryptocurrencies and all that just means that they’re exchanging normal currencies like dollars for cryptos, like bitcoin they’re, hoping that those cryptocurrencies become the next big thing and therefore suddenly shoot up in value at which point they can then either Spend them or just exchange them back for more dollars than they want them for there’s actually a term for cryptocurrencies.
That skyrocket, like this, it’s going to the moon or mooning, but that can mean something very different, depending on who you talk to, but anyway, the one decision that someone would have to make at this point is which cryptocurrency is best suited for you. Although we’ve constantly talked about bitcoin, it is just one of over 4 000 different cryptos, already each of them having different properties, for example, ethereum, which is the second most invested in, can process transactions even faster than bitcoin there’s another one called cardano, which is considered to Be technologically superior and another one called litecoin, which has a newer algorithm if you’re enjoying this video so far make sure to like and subscribe.
It’Ll definitely help you out a lot, and it lets me know that you’re lacking the content on this channel. Now, let’s get on with something that hits a little closer to home. Let me show you what i’ve done and a brief disclaimer. This is not in any way at all financial advice.
I’M not recommending this because i’ve literally only put in a small amount of money that i’m comfortable losing. To be honest. The way i’m seeing it is more as an optimistic gamble as opposed to a strategic investment. The only thing that you absolutely should buy is one of these hats, literally the best purchase i’ve ever made. So i put 40 in ethereum twenty percent to polygon twenty percent in cardano, ten percent in cartesi and ten percent in litecoin.
Basically, this portfolio has basically gone up and then down and then up and then down so you could probably see that crypto is in a pretty weird place right now, which brings me on to its problems. One of the main ones is exactly this. The reason i think a lot of people don’t take crypto seriously is its volatility, since these currencies are so new and completely digital, unlike the market for gold, no one really knows what they should be worth.
That’S probably why you find that crypto prices are quite heavily speculative, fortunately or unfortunately, they’re tied to the news cycle like when a glowing article comes out about them. Prices spiral upwards, but then, when elon musk posts, a tweet that puts them down, they go way down. Another factor is that they’re not really accepted as a form of payment in most places like yes, i can now book holidays with crypto donate to wikipedia with crypto, but there’s been a lot of companies who are pretty back and forth with it. Look at microsoft, tesla and even burger king as examples of companies who said they were going to accept, bitcoin and then doubled down and said they weren’t.
Another concern is the environmental side see the whole reason why a lot of these cryptos are so secure is because of this concept of transactions being verified many many times by many many computers. So i think it’s a fair criticism that that in itself creates a fundamental inefficiency.
It’S almost like a vicious cycle that much computing power requires a lot of electricity, but at the same time you could counter this by saying that traditional vacuum uses more electricity, since there are newer points with better technology that are more efficient one day, you’ll eventually realize Your mistake and be able to get that electricity from renewable sources, of course, depending on who you ask, after that, environmental spiel there’s also the somewhat political side, there’s a pretty strong sentiment that, because there’s no real policy or regulation on crypto right now, it’s like the Perfect currency for criminals, but, to be honest, i think the data speaks for itself on that one.
According to chain analysis, 0.34 percent of crypto transactions are criminal up to 5. Normal cash transactions are criminal and i think that’s because it’s a bit of a misconception that currencies like bitcoin are anonymous. They’Re actually pseudonymous, which means that, even though your actual details are invisible to everyone, your public key, your unique identifier, will be permanently baked into the blockchain upon making transactions with it.
So cash is just a better currency for most types of criminal activity, because by its very nature it’s untraceable. Don’T ask me how i know that, but as well as the negatives, there are also just some straight up optings that have come about because of crypto. For example, you might have heard of an nft a non-fungible token. Well, if you haven’t, you might want to take a seat for this one before we get into the nitty-gritty of nfts.
Make sure to. Let me know what you think in the comments down below i’d love, to hear your initial thoughts on nfts ever since they kind of blew up and faded away from the scene in almost no time just comment down below now, let’s get on with my little pet Peeve now i don’t want to call it stupid, but this one’s a head scratcher, so you know how now you can go into an art gallery and you can pay to own a painting.
Well, now, thanks to the blockchain, you can pay just to have a digital ownership over something kind of like getting a title for a star, so it doesn’t stop anyone from using or sharing that thing, but all it means is that you’d effectively be the owner of The original and they’d all be sharing copies of it, even for most intents and purposes, they look and behave identically like a lot of these nfts. These are literally just jpeg images.
The ceo of twitter jack dorsey sold the first tweet he ever made as an nft for 2.9 million dollars for those just starting just realized that physical art was sold for 69 million dollars, which is absolutely incredible to clarify. This literally just gives the buyer some digital ownership over a jpeg image, but how about putting dog faces over some jpeg images? I mean. Finally, you might have heard of doggy coin. Dirtcoin is based on the same tech as litecoin, but it was created as a joke.
People started sharing it and putting a bit of money into it because they thought it was funny, but that propelled its value to the point where now we have people who have actually become millionaires just because they bought doggy coin when it was cheap. It’S definitely an interesting world out there if you found this video helpful make sure to like and subscribe thanks for watching and if you want to learn a few more tips and tricks to handle your money or your money. Making skills make sure to subscribe. We’Ll see you in the next video cheers:
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