Bitcoin - Fix the money, Fix the world Ethereum - Fix the money, Fix the world LiteCoin - Uptime and inexpensive fees Monero XMR - private, secure,untraceable USDT Tether - Fix the money, fix the world USDC USD Coin - Fix the money, fix the world

Getting Started With Digital Currencies

What is cryptocurrency –

Cryptocurrency is a digital record built on an encrypted blockchain that can process payment transactions and become a store of value. This enables commerce without the use of traditional banks and payment processors.

A blockchain in simple terms is a series of encrypted records distributed across a large network of computers. This network of computers are sometimes referred to as miners and nodes. Nodes verify each cryptocurrency transaction independently as they happen and store the record of transactions on the blockchain. Even though these records are stored on the blockchain the underlying cryptocurrency are only accessible for use by the individual owner and his or her use of a private key.

Your private digital key = your crypto.

Once you possess your private key for your cryptocurrency (away from an online exchange) your ownership and use of your currency is completely up to you. It cannot be blocked, tracked or traced when basic security practices are used. 

There is no single central repository for blockchain transaction data. Each cryptocurrency type (Bitcoin, Litecoin, etc.) stores its own data based on its specific design architecture. The Bitcoin blockchain is separate from the Litecoin and Ethereum blockchain and so on.

In a Proof-of-Work (PoW) cryptocurrency system like Bitcoin, Litecoin and Monero there is no single point of failure or control over individual nodes. This lack of centralization means that any number of nodes can be offline and the system is still operational. It also means that Bitcoin for example has no company structure, managers or CEO’s. It exists on its own by the voluntary participation of thousands of node operators and miners.

Some newer cryptocurrency systems now use a Proof-of-Stake (PoS) system which can be centralized and in some cases controlled by a central authority. We encourage you to do your own research regarding these systems and how they are managed.

As with any new technology, the information presented through legacy media can be ill-informed or intentionally misleading. One of the biggest misconceptions is that all cryptocurrency transactions are anonymous. In reality, the blockchain records for most cryptocurrency types are publicly available to anyone with an interest and the technical ability to view it. With Monero (XMR) being a notable exception. 

What does not happen with cryptocurrency is that an organization like a bank or malicious actor cannot easily identify you, share, compile or study your spending data for marketing or political purposes. Your identity and your transaction history as related to you, as a named entity, are only available to any exchange you choose to share it with. Each exchange has its own rules and policies regarding privacy. Once you own crypto that was not purchased at an exchange, or has been exchanged for other currencies,  these concerns become even less.

There are privacy specific currencies like Monero. With Monero (XMR) most data about transactions is completely encrypted. End to End. Privacy coins are already under scrutiny by Governments around the world as their desire to monitor and control every aspect of commerce increases. Using privacy based coins like XMR can offer the best in privacy, but we encourage you to do your own research. The level of encryption required to maintain privacy introduces a few instances where monitoring and spending your coins may take longer to process. Other than some slower transaction times, XMR and other privacy coins work much like Bitcoin and the others.

How can cryptocurrency be obtained –

It is as easy as signing up with a centralized exchange (CEX) like Coinbase, Crypto.com or many others. For new users, a centralized exchange (CEX) is a great way to do research and start buying your first crypto. CEX’s offer services such as simplified user interfaces, bank transfers, and purchases of crypto with credit cards.

Once you own cryptocurrency it can be stored on a small hardware device (cold wallet) or on any number of local or software wallets (hot wallet). Then your wallet address or a mobile app on your phone is all that is required to make purchases. No credit cards or banks are required.

Some crypto exchanges are now also offering traditional credit and debit cards that can be backed by cryptocurrency instead of the U.S. Dollar. Visa reported over $1 billion in crypto transactions in the first six months of 2021. And this sector is growing rapidly.

The Lightning Network, which is an enhancement to Bitcoin, can currently process transactions at a greater rate than credit card networks and at a fraction of the cost to the merchant and consumer.

Once cryptocurrency is obtained, a user has the choice to use a decentralized exchange (DEX) to exchange one cryptocurrency type for another. A DEX may not offer the same convenience features (like converting Dollars to crypto) as a CEX, but a DEX can be utilized for more privacy and to have more control over fees and transactions. Many only require an email address.

 

Avoiding Volatility –

Owning cryptocurrency can be a wild ride if you are purchasing for investment or hope to make short-term gains. Since it is largely unregulated and in a constant state of growth and development, the value of crypto can swing up or down without notice.

To offset the volatility of the market or just to provide a temporary safe harbor there are also cryptocurrencies known as stablecoins. Stablecoins are pegged to the US Dollar. So in an ideal situation $1 will be still be $1 later.

The most widely used stablecoins are currently Tether (USDT) and USD Coin (USDC). Both are backed (according to the issuers) by fiat currency deposits. Recently PayPal has announced that they too will be issuing their own version of a digital dollar that will be available to their millions of daily users.

At the same time there are algorithm based stable coins meant to maintain a value of $1 by automatically buying and selling assets with artificial intelligence to preserve their value. Dai coin being a good example of this type of system.

We encourage you to do your own research, but stablecoins can potentially be used as a method to convert fiat dollars to cryptocurrency with presumably less risk. It also allows any US Dollars converted to digital currency to be kept in the digital realm and not converted back to US Dollars after a transaction. 

 

Our short-term view of cryptocurrency –

In the beginning there was Bitcoin. As a matter of opinion we think that in the end there will still be Bitcoin. Its lack of centralization and proof-of-work design still has many advantages over any other digital currency designed since.

Bitcoin has scarcity (a maximum limited amount). It is permissionless. There is no owner and there is no restraint on its existence. If one node is online, Bitcoin exists. As it stands there are actually well over 10,000 active Bitcoin nodes today. The number of miners competing to complete transactions is even higher.

With that said; we see use cases for some of the thousands of cryptocurrencies out there at the beginning of 2022. At the same time we see many more without use cases. Those currencies that do not provide utility are destined to disappear.

Privacy, scarcity and decentralization will continue to be what drives the success of digital currency.

There will also inevitably be regulation. This will be specific to each state or nation. It is important to remember that currency like Bitcoin has no president, no headquarters and no investors. It exists completely on its own merit. We recommend this assessment as a comparison to any new crypto user that should be applied to any cryptocurrency they may consider buying.

The potential is so great and there are now such a large number of innovative and influential people invested that we strongly believe in the long term survival and growth of select digital currencies.

We have more information on paying with digital currency here.

Shopping cart

0
image/svg+xml

No products in the cart.

Continue Shopping