Much like the currency in your bank, or the cash in your wallet, Cryptocurrency is another form of money — a new digital payment system. It was invented by a person or group using the alias Satoshi Nakamoto. After the Global Financial Crisis of 2008, they released a new open-source cryptocurrency software in January 2009 — it was called Bitcoin. It finally made it possible to have a decentralized, global currency that no intermediary, bank, lending institution or single nation could control. To verify and record each cryptocurrency transaction, a new advanced monitoring technology was created known as the Blockchain. The Blockchain is a totally independent, decentralized publicly distributed ledger system that tracks and secures every cryptocurrency transaction around the world. Cryptocurrency has created an entirely New Global Monetary System. Now is the time to learn, to invest, and to prepare.
- If you don’t have money to invest at this time, that’s perfectly fine. You can still get started by reading How To Get Free Cryptocurrency.
- Are you still concerned whether Cryptocurrency is a good investment choice for you? Then be sure to check out our article, Now Is The Best Time To Buy Cryptocurrency.
- For those interested in knowing how we personally invest into Cryptocurrency, be sure to read our Coinbase Portfolio Strategy.
Are Cryptocurrency Transactions Secure?
All Cryptocurrency transactions are processed on a peer-to-peer, decentralized system that is validated and recorded by the Blockchain — it is this unique digital ledger that makes Cryptocurrency so secure. Each time a transaction is completed, it’s recorded on a new “block.” When the block is full, it’s added to the end of the “chain” in a sequential order. Every block that is added to the Blockchain is decrypted and validated by the global network of nodes connected to it. Thus, the Blockchain ledger validates, authenticates, and records every unique Cryptocurrency transaction.
A recent Digital Trend article clarifies this complex subject by stating,
“Individuals who validate the transactions — which they do by having their computers solve complex computational problems — are called miners. Mining is a surprisingly intense activity, that requires powerful hardware and a lot of planning. As a reward for their help in validating blocks, miners are given rewards. This is typically a specific cryptocurrency; Bitcoin miners receive bitcoin, while Ethereum miners receive ether.
When you send someone an amount of cryptocurrency, a digital signature is created to authenticate the transaction. Your public key is essentially your “address.” When someone sends you funds, they send it to your public key. When you send funds, you use your private key, which is essentially the password that grants you access to your funds, and a transaction message to create a digital signature. Miners use this signature to verify the transaction, and a new signature will be generated for every individual transaction, so the transaction can’t be repeated.”
Miners observe every block and transaction and validate them against the Blockchain’s Core Consensus Rules. Here are some examples of basic consensus rules that Blockchains use:
- Blocks may only create a certain number of coins.
- Transactions must have correct signatures for the coins being sent.
- Transactions/Blocks must be in the correct data format.
- Within a single Blockchain, a transaction cannot be sent more than one time.
If any transaction or block violates the consensus rules, then it is absolutely rejected, even if every other node on the network thinks that it is valid. The more nodes a Blockchain has to decrypt and verify its ledger, the more decentralized and secure it becomes. This consensus algorithm makes Cryptocurrency the most advanced and secure currency the world has ever seen.
Absolutely YES! But that’s only because we’re Cryptocurrency enthusiasts who envision what the future offers. If the world’s national leaders continue taking the same path that we’ve been observing the last few years, then we truly believe this New Global Monetary System is coming. And we want to emphasize it’s coming a lot sooner than most people realize. Cryptocurrency continues to gain value as a growing number of informed people begin to understand and realize the true capabilities of this new technology.
Many Blockchain Protocols, such as Bitcoin’s, have established a limited quantity to the number of coins that will ever be created. This is the greatest reason Cryptocurrencies, are so valuable. Similar to how diamonds and precious metals are in limited supply, Cryptocurrency is also limited. As worldwide demand increases, the value of these limited Cryptocurrencies will naturally increase. Many investors and hedge-fund managers across the world are now calling Bitcoin the new Digital Gold and even classify it as a commodity rather than a currency.
Merchants all across the world are starting to accept this new currency as actual payment. Back in 2009 when Bitcoin was first created, most world governments did not understand it’s worth or potential. When Bitcoin started to increase in value, and more people and businesses were accepting it as payment, the U.S. Government finally took notice. In other words, they wanted a piece of the action. In 2014, the I.R.S declared that Cryptocurrency truly has value and classified Bitcoins as an asset and subject to the gain and loss rules for capital-gains tax.
Now, take a minute to think about Fiat Currency and why it holds any kind of value. Fiat money is the currency a government has declared to be its legal tender. However, it is no longer guaranteed or backed by a physical commodity like gold. And because the Central Banks of the world can just print more and more, its value surely can’t be because of its rarity. So what exactly makes your $100 bills worth anything at all? Simply, your trust in the national governments of the world to maintain economic stability and growth.
Unfortunately, today, the majority of global economic growth is built upon inflationary systems. This type of growth burdens its citizens with more and more debt. We are trusting governments to maintain this economic growth even though it is mathematically impossible and unsustainable. Ultimately, this outdated system will fail. When this occurs, many world financial experts are predicting a recession far worse than 2008. Thus, I believe now is the best time to educate yourself about Cryptocurrency and to begin investing in this new Global Monetary System.
We use and recommend American-based Coinbase as your primary online Cryptocurrency service provider. Coinbase is one of the best online Cryptocurrency wallets where you can safely buy and sell Crypto Assets for your own portfolio. Their service makes it incredibly easy to start investing in Cryptocurrency right away. There are three basic steps to start:
1. When you sign up, you create a digital currency wallet where you can securely store digital currency.
2. You connect your bank account, debit card, or credit card so you can exchange digital currency into and out of your local currency.
3. You buy digital currency like Bitcoin to begin using the future of money.
Coinbase safely guards your assets with the highest level of security known and every account is insured against theft. As a precaution, Coinbase only stores 2% of their client assets online. To provide better than bank-level security, they use offline vaults, two-factor authentication, as well as IP recognition software.
Free $10 Bonus! If you use any of our referral links to sign up on Coinbase, you will get an extra $10 as soon as you deposit $100 or more into your new account.
So, what are you waiting for? Get your Cryptocurrency portfolio started today with Coinbase!
Note: For those interested in knowing how we invest our own funds into Coinbase, check out our Coinbase Portfolio Strategy. We provide detailed definitions of the varied Crypto Assets that are offered today and explain how and why we allocate funds into each asset.
Please watch this excellent Cryptocurrency introductory video: