A Comprehensive Introduction to Crypto-Currency

December 23, 2013

By: Greg Simon, Contributor from knowmadiclife.com

Bitcoin crypto currencyWhat is a crypto-currency? A crypto-currency is simply a digital medium of exchange. The most widely know and used crypto-currency today is bitcoin. Crypto-currencies are different from government fiat currencies in many ways. One critical main difference between government fiat currency and crypto-currency is denationalization.

Crypto-currencies are denationalized currencies. When we think about money we rarely realize money is an economic good. It is a product we consume in our daily lives. We consume currency to function as a medium of exchange. If a currency additionally functions as a store of wealth and a unit of account it becomes money. So we can say money is something we consume in the economy to function as a medium of exchange, a store of wealth and a unit of account. Money facilities a division of labor economy so we do not have to resort to barter to acquire the things we want to consume. Money allows us to safely store wealth we have created for future use. There is also a money industry. Money is a product we consume in the money industry. Most of us lack this awareness because we usually only have one choice of money available as governments maintain monopolies over the money industry in just about ever country that exists today and have throughout most of human history.

Government fiat money can be called nationalized money. It is produced by corporations or other entities directly or indirectly owned and operated by governments. Governments prefer to monopolize the money industry because they can enjoy something referred to as seigniorage. Seigniorage is the difference between the value of money and the cost to produce and distribute it. Basically, it is the profit from producing and selling money in the money industry. Producing money is extremely profitable for governments when the people have no other option but to consume that government’s money product by fiat. Seigniorage revenues allow governments to covertly tax the people leaving most of us completely unaware of the systemic theft underway. After outright theft, printing money is the most lucrative business governments can ever be involved in. This is why governments will go to any measure to protect and maintain this monopoly over the money industry – in secrecy if possible – including terrorism, murder and war.

Crypto-currencies on the other hand are denationalized. This means they are not owned or operated by any government or government controlled entity. They represent free market money alternatives for people to consume in the money industry. When free market denationalized money options become available to us to consume in the money industry this creates competition. As in any other industry, free market competition in the money industry for our money consumption inspires innovation on the part of entrepreneurs. Just like when you go shopping for a digital camera comparing the features of the different camera options available for you to consume, so would you be able to go shopping for money and compare the different features of the various money options available for you to consume. The result will be superior money options available for us to consume meeting each of our unique money product needs produced at a lower cost to society. Market efficiency is improved and less of the earth’s scarce resources are used.

Whether governments like it or not, crypto-currency technology represents the most significant innovative breakthrough in the money industry, ever. Despite likely future attempts to suppress this technology it is not going to go way. Government monopoly over the money industry will become a thing of the past within our lifetimes. The global economy and the human existence within it both will soon experience a significant positive evolution as a result.

So what is bitcoin? Bitcoin is one crypto-currency. Crypto-currencies are not fungible, or in other words the are not interchangeable. Just like you cannot use a Japanese yen as a US dollar, so can you also not use a bitcoin as a litecoin. Bitcoin is currently the most widely known and used of the crypto-currencies in existence. In the future it may not always be the leading crypto-currency. There are other crypto-currencies in existence attempting to compete for our money business. More are likely to be created in the future as well. But for now, bitcoin is the king of the hill.

Are you thoroughly confused yet? If you are don’t worry, everyone is in the beginning, even so called economics and finance experts. It is natural and to be expected as nothing like crypto-currencies has ever existed before. We have no past experience to compare this phenomenon to. We have put together the below list of links to very basic introductory knowledge about crypto-currencies in general and bitcoin specifically. It is a work in progress list. Currently we only have included beginner level resources. In the future we will be including intermediate level and advanced level resources. If you known of any other good resources we are not listing please give us a shout at the contacts link above. Over time we will also be adding more advanced level references.

If after learning about bitcoin you are interested in getting involved the first step is to get yourself a wallet. The easiest place for the very beginner to get involved is at Coinbase. You can also learn more about wallet options available to you and how to start buying and spending bitcoin at Bitcoin.org.

Enjoy and live free.

Crypto-Currency  Awareness: Beginner

WATCH

“What is Bitcoin?” (1:44)

This is the shortest and most basic explanation of bitcoin you will find anywhere.

“The Truth About Bitcoin and Alternative Currencies” (5:01)

This is a very basic and easy to understand video explaining some of the qualities of bitcoin and contrasting them with the equivalent qualities of government fiat, gold, and silver.

“Bitcoin 101 Blackboard Series: What is Bitcoin? Part 1 – A Beginning Video for Bitcoin Newcomers” (17:43)

In the Bitcoin 101 Blackboard Series, James D’Angelo (former NASA Engineer/Professor) does a great job covering all the basics about bitcoin.  The above video is the most basic in the series.  You can reference the others by going to his Youtube channel.  Over a dozen video tutorials in the Bitcoin 101 Blackboard Series can be found at the World Bitcoin Foundation Youtube channel.

Global Wealth Protection shared and featured a video with Stefan Molyneux called “The True Value of Bitcoin: What You Really Need to Know”.  But in the video below, he answers the question: What Is Bitcoin?  He also looks at the rise of bitcoin, and discusses its history, mining, fees, altcoins, regulatory hypocrisy, world-wide awareness, its comparisons to gold, anonymous transactions, the possible government attacks, and what the future holds for the decentralized crypto-currency.

“The Truth About Bitcoin” (51:01)

A world of other educational videos from Stefan can be accessed at his Youtube channel: The Bitcoin Collection.

“Khan Academy: What is Bitcoin?” (9:08)

The Khan Academy has a nine-part series on bitcoin. It is hosted by Zulfikar Ramzan, a world leading expert in computer security and cryptography, and is currently the Chief Scientist at Sourcefire.  Although this series begins basic, it quickly becomes a bit detailed.  If you can get through the entire series with general comprehension, you will have a great fundamental grasp on what bitcoin is.

Bitcoin: How I Learned to Stop Worrying and Love Crypto
A comprehensive Udemy video lecture series by bitcoin entrepreneur, mathematician and bitcoin enthusiast Charles Hoskinson. The number of lectures in this video tutorial stands at nineteen as of the time of writing this page but he has plans to continue to produce more.

“Why Trust Bitcoin?” (29:20)

This interview with bitcoin pioneer, Trace Mayer, is slightly dated, but the information covered is still relevant.  Trace talks about how the bitcoin protocol eliminates the need for trust among actors in the economy.

READ
Coindesk Beginners Guide to Bitcoin
Coindesk.com is a bitcoin news aggregator website. It is a good one stop shop to keep up with the major news events unfolding related to bitcoin and other crypto-currencies. The beginners guide to bitcoin has eleven different categories: What is bitcoin?; Why use bitcoin?; How can I buy bitcoin?; How to store your bitcoins; What can you buy with bitcoins?; Is bitcoin legal?; How do bitcoin transactions work?; How bitcoin mining works; How to set up a bitcoin miner; Who is Satoshi Nakamoto?; Bitcoin glossary.

Bitcoin Magazine
Bitcoin Magazine is a comprehensive online source of bitcoin related news and current events. There is also a “Bitcoin 101” section for bitcoin newbies.

A Beginner’s Guide to Bitcoin and Bitcoin Services” – by Trace Mayer
As a pioneer advocate of bitcoin, Trace Mayer is one of the foremost experts on bitcoin from both a technical and legal perspective. In this ebook Trace guides you through the basics of bitcoin. It is free to download or you may choose to contribute a donation.

Reddit Bitcoin Channel
This is basically ground zero for anything bitcoin. Much of the content may go over the heads of beginners but because of the comprehensiveness of the data and high user base it is a great place to visit to gain exposure to all that is bitcoin.

Bitcoin: The Libertarian’s Introduction
An introduction of the bitcoin protocol from a libertarian perspective by bitcoin entrepreneur Erik Foorhees.

The Genesis Block
This is a good site to stay up to date on general news, mining, trading, economics, regulation and eduction.

The Daily Bitcoin
A news aggregating site operated by Adam B. Levine.

LISTEN

What Is Bitcoin? Tom Woods Talks to Erik Voorhees (30:32)
Tom and Erik cover the very basics of bitcoin in an easy to understand discussion for the beginner. If you are a fan of Tom Woods you will enjoy this discussion.

Let’s Talk Bitcoin!
Let’s Talk Bitcoin is a twice weekly show by Adam levine about the ideas, people and projects building the new digital economy and the future of money.

A Beginner’s Guide to Bitcoin – Interview with Trace Mayer (29:02)
Another interview with Trace Mayer covering the bitcoin fundamentals for beginners

CRYPTO AWARENESS LEVEL: INTERMEDIATE

WATCH
Bitcoin Neutrality by Andreas Antonopolous (35:40)

Andreas Antonopoulos discusses Bitcoin neutrality at the Bitcoin 2013 Conference on May 18, 2013, in San Jose, CA, hosted by the Bitcoin Foundation. Don’t be misled by the empty seats in the room. Andreas is rising to be one of the most articulate crypto-currency visionaries.

Bitcoin Conferences

Do you want to attend a bitcoin conference but for whatever reason you have been unable to make it to one yet? You can virtually attend the below past bitcoin conferences that have been uploaded to Youtube.

Bitcoin London Conference – September 2012

Bitcoin San Jose, CA Conference – May 2013

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Comments

  1. When someone writes an post he/she maintains the idea
    of a user in his/her brain that how a user can understand it.

    Thus that’s why this post is perfect. Thanks!

  2. How will using bitcoin to make a deposit at a a very shady Online gambling site be safer than using my credit card? They have scammed every credit card I’ve used, I love them because I win on their site. No problems with payouts just deposits.?

    • Kelly Diamond says

      If they accept BTC then they would give you their information and you’d pay to them as opposed to them debiting your account. It would be similar to Venmo or Paypal where you authorize an amount to be paid out, but the recipient wouldn’t have your account information, but it would reference what the payment is for. Or at least that would be the set up I’d trust over giving them my account information.

  3. Adam Howell says

    This is one hell of an introductory guide.

    Bitcoins have definitely sparked my interest over the last several months, but even more so, these new alt coins that are moving quickly up the charts.

    There has been some huge movement within some of the alt coins, sometimes a jump of over 1000% per day.
    The general theme I notice with the majority of the alt coins is that they are all steadily gaining value, with some exceptions of course.
    This presents a unique opportunity to take advantage by day trading on some of the peaks and valleys on an overall upward trend.

    Whatever your investment strategy is, the alt coin market seems to be as safe a place as any for some risky rewards.

    One tip from previous experience. Make sure if you are going to day trade alt coins that you enter into a marketplace with sufficient volume to operate. You don’t want to get stuck holding onto something you can’t get rid of easily when needed.

  4. Please donate Bitcoin. Be a nice person, no matter how small or big, in the name of the Lord Jesus Christ. BTC:

  5. Can you invest in bitcoins.If so where do i buy them from.What is the strategy.Do you hold on to them like some form of a stock.Can you buy and sell them. How long would you have to hold them before you sell them.many regards.patrick o’ sullivan

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