When I first heard about Bitcoin it was back in late 2009 from my brother who had mentioned to me that we should consider looking into it because we could potentially get rich from it.
Of course, I dismissed the idea right away because I knew that any challenge to the government’s ability to control the money supply and flow would just be a waste of time.
As time went by I would occasionally read about it and I think it was sometime in 2011 that I even tried to download the Litecoin miner and give it a go. Litecoin is one of the many Alt-coins or alternative coins out there.
However I never actually follow through because, in the back of my mind, the government will never allow it to succeed.
Most major news outlets and television networks were also dismissive of Bitcoin as a fad and that it was possibly a scam.
They were relegating Bitcoin and Alt-coins to the realm of nerds and anarchists. Many naysayers and pundits all were sure that Bitcoin and these new cryptocurrencies were going to die off very soon.
The funny thing is they were all wrong and while they continue to push out their predictions further and further to this day, they continue to be wrong about Bitcoin and the cryptocurrency space.
This is not to say that Bitcoin and Alt-coins did not have hiccups along the way with the wild price swings and crashes here and there, the most recent one being this year in July.
So What Is Really Bitcoin and Cryptocurrencies?
To understand Bitcoin which is the mother of cryptocurrency, we can break down the word “cryptocurrency” into two parts: “crypto” and “currency”.
Crypto is cryptography which is the idea of making something secret and having a key to make it not a secret. There are better definitions, but I’m going with this to make it easy to understand for the ordinary person.
And of course, currency is just a system of money, like the US dollar, Japanese Yen, British Pound, and so on.
So cryptocurrency, we can just say is basically digital currency that is underpinned by something called a blockchain.
This blockchain is public, meaning anyone can see and verify, a digital ledger like in the accounting term that was started by the anonymous Satoshi Nakamoto, a person or a group, due to the 2008 financial crisis caused by financial institutions.
The lack of trust in the government and the majority of financial institutions at the expense of the ordinary people made Bitcoin and other cryptocurrencies possible.
Got Bit by the SIA Coin Bug
And now back to my story, it was this cryptocurrency crash around July 14th to 16th that led me back to Bitcoin and cryptocurrencies.
I began to look into it again and started mining not Bitcoin, but SIA coin at first because you can’t really mine Bitcoin with a regular graphics card anymore.
It was when I first received my first 500 Sia coins which are currently worth about $5 as each coin is currently valued at .01 cents at the time of this writing.
As I continued to mine SIA coins and read up and watch as many YouTube videos as possible, my fascination kept growing to the point that I went out to buy a better graphics card to mine more cryptocurrencies.
It was part experiment and part wanting to make money with minimal effort.
I came across new information like the different types of wallets where you store your different cryptocurrencies, exchanges where you can buy and sell them, and ICO (initial coin offering).
Here are my findings on Bitcoin and the other cryptocurrencies (Alt-coins)
In order not to make this article too long, I’m just going to summarize my findings:
- Bitcoin and good Alt-coins are here to stay for the long term
- The government can’t really stop Bitcoin or alt-coins because although they can shut down exchanges, Bitcoin and other cryptocurrencies can be stored off-line even in paper form
- Expect wild price swings as Bitcoin and Alt-coins are in their infancy stage just like when the Internet was starting out
- Most ICOs (initial coin offerings) are basically scams and/or fraud and just promises of intent to do something; if you want to invest look for really good solid ideas that make sense or are active
- The Bitcoin community is split as decisions are made by consensus but still leads to disagreement and things like Bitcoin Cash
- Big miners around the world, especially in places like China, can cause oligopoly behavior
- Big businesses and some countries are coming on board the blockchain train leading to more acceptance by the general public
- There is currently a lag time for transactions to go through the exchange due to the sheer volume and new people coming into the cryptocurrency space (fixes are incoming, but when?)
- Although there is very small fee for sending cryptocurrencies is great compared to the traditional regular financial institutions (banks, Western Union), fees are charged at every transaction point and increase, still very small compared to traditional banks though
- Money can be raised and made more quickly by the general public than through the traditional stock market
- Stock markets should be concerned as they are no longer the only game in town
Why Bitcoin and Alt-coins are not ready for prime-time
Despite the continual advancements in bitcoin and altcoins as an alternative to traditional fiat currency, the ordinary person will find it hard to understand and do a transaction because it involves some learning curve.
For example, one issue is cross-chain, this is a problem when you send money from one type of cryptocurrency to another by mistake and it is hard or impossible to get your money back.
So word of advice, if you get into the cryptocurrency space, don’t try to send a Sia coin to a Ripple wallet or other combinations. It has to be Sia coin to Sia coin and Ripple to Ripple.
In addition, there is really not that much help when you get stuck with issues, most exchanges are not capable of handling customer support because they don’t have the capacity and human resources. Chatbots are often used and we know how much everybody loves chatbots right? Wink wink.
Until a common wallet is invented that can store all your different cryptocurrencies online or offline, an ability for easy cross-currency quick transactions, more acceptance by merchants, and most importantly stable currency price then cryptocurrency will not be ready for prime-time, but there’s hope.
My Conclusion and Why I’m Still a Believer
I left out one important aspect of the cryptocurrency world which is Ethereum, ironically started by a Russian-Canadian by the name of Vitalik Buterin.
Out of Ethereum came the smart contract, a self-executing contract that will change the way contractual obligations are fulfilled.
Imagine yourself buying shares in the stock market and it is done in a matter of seconds instead of the current three days now for settlement.
And this is one of the many reasons why I’m a believer in Bitcoin and cryptocurrency.
The promise of an alternative to the way traditional businesses are run and power held in the hands of a few are now distributed to the masses is here and it is real.