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This is just our own understanding and explanation and opinion of the Cryptocurrency Arena that was derived from various resources on the Internet, (some verifiable and some not so verifiable)and should be taken for the content that it states and not be confused to be the “Holy Grail” of this topic or interpreted as any sort of legal, or non-legal advice. This is because it is all based on New Technology that even though it has been created and put to use, further development and implantation is still underway, and certain other criteria that is taking place in the Arena is guiding the evolving process.
Make no mistake. If you were ever wondering what High Technology (Hi-Tech) is, then for right now this is it. It most likely won’t be though for generations to come but it will be part of the backbone that they will need to get to wherever they get to in years from now. Just like the Internet changed the way we do things today so will this technology change things very soon. Our predecessors will have other issues to deal with like choosing the correct spacesuit for that vacation to Mars or something of that nature. One thing is for sure in that what is being created in this and other technology today is part of the building blacks that will help them reach such frontiers later on. Welcome to the future!
If you’re old enough you can remember the days when people were being asked for email addresses and the answer was “What’s an email?” Nowadays the question could be do you have any Bitcoins and the answer is “What’s a Bitcoin?” on a personal note a few years back I was looking through some old 45 records that I found stored away in the attic. I was going through them when my then 15 Year old daughter came to me and asked “What are those?” I explained that they were playing records which hold music and what we used back in the day to listen to music by putting them on a record player. She said “Oh wow, COOL! I’ve heard of those!” Then she said “Hey! Those are pretty big! How many songs does one hold?” When I told her just 2 she almost fell off the chair! She said “Just 2!? I have this device here that is the size of a half dollar that holds 1,000 songs!” (And that device plays in crystal clear hi-fidelity, something we used to dream of, and spend tons of money to acquire). The point is that we’ve come a long way but we have way more road to travel than has been travelled on. Enjoy the Ride while it lasts!
Here are some definitions of things you will need to know about and understand that we took from the Internet. Read through them and were possible we’ll try to put things in laymen’s terms to help make it more comprehensible to the best of our ability. Any and all comments will be welcomed. We chose to take some explanations and definitions from Wikipedia, (which is not always 100% correct for a few reasons) for a good reason as you will note later on.
A cryptocurrency (or crypto currency) is a digital asset designed to work as a medium of exchange that uses cryptography to secure its transactions, to control the creation of additional units, and to verify the transfer of assets. Cryptocurrencies are classified as a subset of digital currencies and are also classified as a subset of alternative currencies and virtual currencies.
Bitcoin, created in 2009, was the first decentralized cryptocurrency. Since then, numerous other cryptocurrencies have been created. These are frequently called altcoins, as a blend of alternative coin. Bitcoin and its derivatives use decentralized control as opposed to centralized electronic money and central banking systems. The decentralized control is related to the use of bitcoin’s blockchain transaction database in the role of a distributed ledger
Think of putting $1 in a pinball machine and it will give you 4 credits that are on the ledger in which you can play 4 games. At that point you don’t have the $1 anymore but you own 4 games (virtually because you have nothing to show for them) to play on that machine. In this case once you start using the credits they will have been spent but if you don’t use them yours until you use them.
A blockchain, originally block chain, is a continuously growing list of records, called blocks, which are linked and secured using cryptography. Each block typically contains a hash pointer as a link to a previous block, a timestamp and transaction data. By design, blockchains are inherently resistant to modification of the data. It is “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way”. For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without the alteration of all subsequent blocks, which requires collusion of the network majority.
Think of a ledger of Math Problems with their respective solutions. Each Problem with their solution is a block and all them create the chain. This ledger is open source in that everyone can access it and see it.
Now think of a group of people working on solving the same Math Problem to find the solution. This is a peer to peer relationship in that all the users are connected by a common network. Once the solution is achieved this problem with its solution goes into the ledger and creates a new block to the chain. Once entered this block cannot be changed without the consent of all the people that were working on the problem. It’s done once and stays that way forever. It is also open source in that anyone can access it.
Now take this scenario and convert it to a transaction of buying something. You have the buyer and the seller. They create the transaction on this peer to peer network. Once the transaction is complete it becomes a block, goes on the ledger and becomes a link in the block chain and stays there forever. And so it goes for anything and everything that takes place through the blockchain technology.
Let’s take Wikipedia. This is good example of open source because anybody can read, input and make changes to its content making it peer to peer as well. However It cannot be considered a blockchain because there is one server that is housing the information which can be changed at any given time and even deleted.
DEFINITION of ‘Decentralized Market’
A market structure that consists of a network of various technical devices that enable investors to create a marketplace without a centralized location. In a decentralized market, technology provides investors with access to various bids/ask prices and makes it possible for them to deal directly with other investors/dealers rather than with a given exchange.
BREAKING DOWN ‘Decentralized Market’
The foreign exchange market is an example of a decentralized market because there is no one physical location where investors go to buy or sell currencies. Forex traders can use the internet to check the quotes of various currency pairs from different dealers from around the world.
Cryptocurrecncies and the blockchain are decentralized in that there is no particular government, individual or entity that runs this ship. Yes, there is no headquarters and no Captain. It runs by itself and is just used by all the people connected to it.
A Cryptocurrency wallet stores the public and private keys which can be used to receive or spend the Cryptocurrency. A wallet can contain multiple public and private key pairs. A Cryptocurrency itself is not in the wallet. In case of bitcoin and Cryptocurrencies derived from it, the Cryptocurrency is decentrally stored and maintained in a publicly available ledger. Every piece of Cryptocurrency has a private key. With the private key, it is possible to write in the public ledger, effectively spending the associated Cryptocurrency.
When choosing a wallet, the owner must keep in mind who is supposed to have access to (a copy of) the private keys and thus has potentially access to the Cryptocurrency. Just like with a bank, the user needs to trust the provider to keep the Cryptocurrency safe. Downloading a Cryptocurrency wallet from a wallet provider to a computer or phone does not automatically mean that the owner is the only one who has a copy of the private keys. For example with Coinbase, it is possible to install a wallet on a phone and to also have access to the same wallet through their website. For receiving Cryptocurrency, access to the receiving wallet is not needed. The sending party only needs to know the destination address. Anyone can send Cryptocurrency to an address. Only the one who has the private key of the corresponding address can use it.
Yes, a wallet is like a bank account. When you’re ready to start collecting and transacting in any Cryptocurrencies this is the first thing you will need.
Here we use Bitcoin as an example because mining for different Cryptocurrencies can differ.
The bitcoin network is a peer-to-peer payment network that operates on a cryptographic protocol. Users send and receive bitcoins, the units of currency, by broadcasting digitally signed messages to the network using bitcoin cryptocurrency wallet software. Transactions are recorded into a distributed, replicated public database known as the blockchain, with consensus achieved by a proof-of-work system called mining. The protocol was designed in 2008 and released in 2009 as open source software by Satoshi Nakamoto, the name or pseudonym of the original developer/developer group.
The network requires minimal structure to share transactions. An ad hoc decentralized network of volunteers is sufficient. Messages are broadcast on a best effort basis, and nodes can leave and rejoin the network at will. Upon reconnection, a node downloads and verifies new blocks from other nodes to complete its local copy of the blockchain.
The following explanation is from Investopedia
Bitcoin mining is the process by which transactions are verified and added to the public ledger, known as the block chain, and also the means through which new bitcoin are released. Anyone with access to the internet and suitable hardware can participate in mining.
Altcoins (Alternative Coins) or Tokens.
DEFINITION of ‘Altcoin’
Altcoins are the alternative cryptocurrencies launched after the success of Bitcoin. Generally, they project themselves as better substitutes to Bitcoin. The success of Bitcoin as the first peer-to-peer digital currency paved the way for many to follow. Many altcoins are trying to target any perceived limitations that Bitcoin has and come up with newer versions with competitive advantages. There is a great variety of altcoins.
BREAKING DOWN ‘Altcoin’
“Altcoin” is a combination of two words: “alt” and “coin”; alt is short for alternative and coin signifies currency. Thus together they imply a category of cryptocurrency that is alternative to the digital currency Bitcoin. After the success story of Bitcoin, many other peer-to-peer digital currencies have emerged in an attempt to imitate that success.
Many of the altcoins are built up on the basic framework provided by Bitcoins. Thus most altcoins are peer-to-peer, involve a mining process and offer efficient and cheap ways to carry out transactions on the web. But even with many overlapping features, altcoins vary widely from each other.
Even with many close competitors, Bitcoin is still leading the virtual currency pack. Newer and more innovative versions are getting launched that offer modifications in areas like transaction speed, privacy, proof-of-stake, DNS resolution and more. A few of them have gained popularity; the rest are lesser-known. Examples of altcoin include Litecoin, Dogecoin, Peercoin, Feathercoin, Zetacoin, Novacoin, etc. Litecoin is seen as the closest competitor to Bitcoin.
DIGITAL TOKENS IN THE BEGINNING
When you enter an email address into a website to join a mailing list, you’re often asked to check your email and click on a link. The link looks something like this:
In this case, the ‘token’ is this string of characters which was sent to you. It’s a unique string of characters, which, when you click on it, tells the server that “yep, the guy definitely got the email, so the email account is definitely his.”
So, the website sent you a token, and you sent it back, proving you had control of that email address.
However, ‘token’ is now being used in an entirely different way to mean other things in cryptocurrency land. Let’s explore.
Cryptocurrency tokens don’t exist as a string like we saw above (if they did, they would be easy to copy), but rather they exist conceptually as entries on a ledger (a blockchain). You own these ‘tokens’ because you have a key that lets you create a new entry on the ledger, re-assigning the ownership to someone else. You don’t store tokens on your computer, you store the keys that let you reassign the quantity.
We prefer to think of these ‘tokens’ as specific amounts of digital resources which you control, and you can reassign control to someone else.
We’ll cover two types of token:
- “intrinsic” or “native” or “built-in” tokens of blockchains
- “asset-backed” tokens issued by a party onto a blockchain for later redemption
- Intrinsic tokens (also known as ‘native or ‘built-in’ tokens)Intrinsic tokens are made-up resources that have some utility.
Some of the more well known examples of intrinsic tokens are:
- BTC on the Bitcoin blockchain
- XRP on the Ripple network
- NXT on the NXT platform
- ETH on Ethereum
There are many more. See: http://coinmarketcap.com/
These ‘coins’ or ‘tokens’ really form part of the core of the blockchains, and the blockchains would not run without them. They are usually part of an incentive scheme to encourage people to help validate transactions and create blocks, or in Ripple’s case, they are there to create a small cost per transaction which helps prevent transaction spam.
Today Ethereum is being very widely used to create Altcoins and Tokens because of its platform and security features. https://www.ethereum.org/
ICO (Initial Coin Offering)
An initial coin offering (ICO) is a means of crowdfunding centered around cryptocurrency, which can be a source of capital for startup companies. In an ICO, some quantity of the crowdfunded cryptocurrency is preallocated to investors in the form of “tokens,” in exchange for legal tender or other cryptocurrencies such as Bitcoin or Ethereum. These tokens become functional units of currency if or when the ICO’s funding goal is met and the project launches.
ICOs provide a means by which start-up companies can avoid costs of regulatory compliance and intermediary financial organizations, while increasing risk for investors. ICOs may fall outside existing regulations or may need to be regulated depending on the nature of the project, or banned altogether in some jurisdictions.
Hold on there! If you reside in the US before you go out and start trying to raise money with an ICO Crowdsale for a project you have in mind or want to invest in an ICO that you found to be interesting you might want to think twice. The SEC (Security And Exchange Commission) has placed strict rules and penalties about this and is considering this to be a security offering. They’re main objective is to protect investors from Scams and/or Ponzi schemes, something in which you can’t blame them for. That’s bad news for us good guys but until things get to a normal state and much better understood this option requires a lot of work for Americans to accomplish.
You can read more about what the SEC is doing on their website https://www.sec.gov/
These are pretty much the basics you need to know for now.
To acquire any type of Cryptocurrency there are a few ways to get this done. As previously mentioned you’re going to need a “Wallet” to keep your Cryptocurrecies in. Then you buy them by exchanging any fiat currency like; e.g. Dollars and Pounds, for them. You will be charged a fee to do this. Two such places where you can accomplish this is Coinpayments and Coinbase.
The other way to acquire them is for someone who already has them to transfer them to your already created “Wallet”. What is very nice about Cryptocurrencies is the fact one of their main qualities is to transact in them with little to no fees. This is something that known but not yet really put into play yet because not too many people know about Cryptocurrencies nor have any to transact with!
Here is an example. Let’s say you want to send your spoiled kid that’s in college $1000. If you did a bank transfer at a local bank like the one we use (terms and handling times differ from bank to bank) you would have to go to the bank in person, be charged $25 for the transfer and if you get it done by 2:PM it will go out the same day. That doesn’t necessarily mean it will get there the same day. That would depend on the attributes of the receiving bank which may also charge the recipient a handling fee for the transaction.
With Cryptocurrencies all of this is wiped off the slate. You don’t have to go to the bank, you will be charged very little or nothing to do the transaction depending on certain circumstances, and the transfer is done within seconds. All you have to do is get the public key to your kids Wallet. Then you go to your Wallet, create the transaction, hit send and you’re done. How beautiful is that! Before you get a chance to call and ask it has been received it will not only have been received it but probably spent already!
This area of the Spectrum which addresses the other uses of Cryptocurrencies needs to be more explored now and its concepts implemented way more than the level that it is at. We’ve done some extensive research and be assured that it is being overlooked more than you think and for a few reasons.
One reason is that there really aren’t any in the hands of everyday people like us here to use them. A reason for that is because why should we have any because of the risk the investment market has created regarding them. Another one is the fact that those who have them won’t part with them. We were looking at some twitter account of people to follow that are involved with Cryptocurrencies. Not one of them mentioned in their profile that the use Cryptocurrencies to buy and sell things or use them for goods and services. We came across descriptions like “Bitcoin Investor”, “Cryptocurrency Day Trader” and things of the sort. The best one was “Cryptocurrency Hoarder”, (no joke!).
Another reason is “what would we do with them”. There aren’t any places near us here that accept them yet let alone even know they exist. So we went back to the Internet and found places that say they do accept them. We also found some sites with lists of places that accept Bitcoin and other Cryptocurrencies. We contacted quite a few of these places and of them that we were able to get through to, these are the answers we received.
- Some do in fact accept them as payment. Of those they will accept only a limit. This we found to be acceptable and understanding but was the best response received.
- Some said that they don’t accept them for various reasons
- The best was that quite a few said they don’t accept them, never did, didn’t even know what they were and had no idea they were on such a list.
Word on the street is that some “Big Players” like Overstock, Virgin Galactic and Amazon accept some cryptocurrencies but only on a limited basis. This makes sense because for one thing, there really isn’t too much they can do with them. But they have the right attitude and that’s what needs to be done at the consumer level starting now. I feel that everyone should start getting their hands on whatever they can afford and start transacting with them.
For Overstock it would be good for people like us here to get our hands on some Crytocurrencies. Then we could shop there with them.
Mark Cuban, the celebrity on Shark Tank and owner of the Dallas Mavericks Basketball team said “The Dallas Mavericks will accept Bitcoin and other forms of cryptocurrency as payment for tickets in the 2018-19 NBA season.
We like Mark a lot here but wonder how many of his fans will have Bitcoins, and whichever other Cryptocurrencies he decides to accept by that time. Maybe we can get Mark to join in the discussions we have in our Facebook group and push the issue!
Here are couple ways that we think can get some of these Cryptocurrencies into the hands of everyday people and without having to worry about too much risk in regard to their value.
First of all nobody should go out and change all of their money into Crytocurrencies. People should just convert a bit of cash into them according to their makeup. Lets say everyone should convert an amount that wouldn’t be missed or needed like the coins you throw in a piggy bank. We’re not saying this because we think that these Cryptocurrencies will be worthless one day. We in fact think the opposite, and one thing we are quite certain about is, like it or not, that in one way, shape or form they are here to stay. So it’s because we think it’s the best way they can be distributed at this level and have practically everybody get on board.
For the average Joe’s out there (and average Jill’s too). The next time you want to sell some stuff that you don’t need anymore and figure it would make more sense to try and get some extra cash instead of bringing them to the dump why not put them up for sale and accept Cryptocurrencies for them.
For merchants, they can get rid of some unwanted merchandise and turn those into Cryptocurrencies.
For places like pizzeria’s and restaurants they can accept some of their payments in the forms of Cryptocurrencies. The same thing goes for those who provide services like a gym.
These are just a few ideas but it’s a way to get the ball rolling. Hopefully some other people have some good ideas on how to acquire Cryptocurrencies and will post them on our Facebook group page.
Our ultimate hope here is that the group we created on Facebook draws enough attention and gets people to start getting involved. When we say people we mean everyone especially those at the consumer level or “the little guy” if you will. To get this done on our end here maybe a lot must happen but 2 of them hopefully will, within our group, and get this machine running. Those 2 things are:
- The group draws enough interest and attention from as many people as possible all over the world to start getting involved with transacting and interacting with them for goods and services, so get let’s get the word out.
- The group draws the attention of the “Big Players” already involved in the Cryptocurrency Arena like the Investors, founders and co-founders of these Cryptocurrencies etc. who are for the most part concentrating on the other end of the Cryptocurrency Spectrum right now.
As for these “Big Players”, all of which we tip our hat to, we are in no way implying that they should abandon what they are doing right now. That is part of the beauty of the Cryptocurrency Arena, having something that has value in which people invest in is a great thing. What the “Big Players” need to do now is take some of their efforts and attention, and focus on building this area of the Spectrum up. Why? Read on.
It is no secret that the market is going wild and considered volatile and risky. Most say that it is going to be roller coaster ride that some say will crash and some say will flourish. If the “Big Players” as well as everyone that is already involved on the other end of the spectrum really don’t want to see a crash but just the opposite then there is no better way then to help give some well-deserved credibility to these Cryptocurrencies by working on getting things done on this end of the Spectrum (the quicker the better) to give what they are doing on their end and the whole Cryptocurrency Arena a stronger backbone and build a solid foundation that they so desperately need at this point.
January 20, 2018