Hi everyone and welcome back to Kryptos news. I am el and i'm omar AKA Krypto and we're here to answer a lot of the basic questions related to cryptocurrency and hopefully a nice, streamlined and concise way to the answers of those questions that tend to come up.
A lot we've, been running a daily news channel and we frequently get asked the same questions. So hopefully, these answers will make it easy for you and your family members and your friends to understand what is cryptocurrency and why it's important.
So why don't you give us a little bit of an intro into the space. Sure so, when it came to me, I became really interested in tech stocks. I was investing in Microsoft, Intel and stocks that I felt like would lead the charge into this Internet of Things.
This technological revolution, that's, been like a train. Coming really really hard that you cannot slow down as technology gets adopted more and more by the mainstream and tends to be all of our lives just ubiquitous and everything and as well.
I was trading these stocks that happened to come across Bitcoin, which I'd heard of before, and I thought to myself Oh interesting, there was some really bad news about Bitcoin today and the price seems to have taken a hit and I thought let Me buy some because I know you should buy on the dip, and so I bought some Bitcoin and the more I was in the space holding the Bitcoin.
Watching my money go up. All I could think was wow. This is incredible, and I stopped eating and sleeping trying to understand how this could really take over the world and not just for money purposes, but really to make all of our lives better.
So what's really interesting also, is that we have all this economic uncertainty around the world. There was. There are crashes that happen about every single ten years when around 1998 1988 and 1987, those who went in the tech stock in 2000's.
2008 was the most recent one, and that was a really bad one, because the bank's. Pretty much all collapsed, they didn't, actually have the money available to give the consumers that put the money that put their money inside of a bank see what most people don't realize is that when we put money in the Bank, the bank lends out about nine times what we put inside of the bank.
So if we were all to go to the bank because we're, not sure if the economy is a safe place to keep, is it's? A safe time to keep our money in the bank because the economy is looking uncertain and we all the bank at the same time and the bank doesn't have that money to give all of us our money, because they lend out nine times That money and then charge interest to other parties in order to do a banks to which is make money.
So they loan out that money for mortgages and cars. Then they that's. What's called a bank run? If we all go to the bank, it happened in Greece, it happens all around the world when banks collapse, and so it was supposed to start in 2008 and they got bailed out.
Wall Street got bailed out. There was a big movement that happened. People were very, very upset, except this time we can't do the same thing. We will not be able to bail out the banks. The next crash some speculate.
It could happen this year. It happened next year for various reasons. There's, a limit for examples of the amount of debt that the United States can print here in the United States, which is debt that we owe to other countries.
Countries by were to call bonds, so we have to pay within the next ten years. They basically lend us money. We give them a piece of paper called a bond and we say we're gonna give you a five percent return.
After ten years, and so we owe debts those people, people who work for the government and have their pensions, how are we gonna pay? All of this debt that continues to grow and there's, actually a limit to the amount of debt that we printed in.
The United States called a debt ceiling and we hit that limit and it's supposed to come up. The discussion as to whether raised to raise it or not in November again - and that is always you know it's, bad, both politically economically, and it means that we're gonna have to print more and more money, causing inflation, Meaning that more and more people have dollars in their pockets, there are more dollars in circulation.
Therefore, everything around us will cost more. So we like to assume that those dollars are gonna, be in our pockets right that are printed except they go to the heads of CEOs. They go to the banksters, they go, they go to other governments.
They go to pay debts that are not reaching the lower the people who need that money, and so Bitcoin gives us an opportunity now to to really change the whole system, because really money is power. He who issues the money, issues, the power and the control.
So we've, been used to this entire world, where we have one entity, such as the Federal Reserve here in the United States that prints the money they they print the money to pay off debts that they need.
They print the money when banks are insolvent or those bank runs happen, and that means that our dollar is worth less more in circulation, more supply or the same and same or less demand, because the US dollar isn't back to buy gold as It once was before 1971 means that we're gonna pay more for everything, and we become more and more almost like indentured slaves really to working more and more hours.
Look at the quality of life Americans had in the 60s and 50s. That's, not that the case anymore, through programs called quantitative easing, which is a fancy word for printing more money. So really what it is is that we have more and more money being printed due to inflation, which is bad right and instead we finally have this one currency called Bitcoin that got created in 2009.
I think it was a ninja. I think it might have been a blessing from God, if you believe in God, I think it was a creation of the universe and some individual, a woman, a man, a group of government, a country, an anarchist, whoever they were a time traveler from the future.
Who knew that Bitcoin would save us came and published this white paper? And he said electronic peer-to-peer cash system, which would be a system of money where I don't, have to wait for the bank to print print the money before I can use it.
I don't, have to deposit the money in the bank and then swipe a card. Basically, it takes intermediaries out of it. I can send money directly to you. I can store value for the work that I've done inside a unit, which is what money really is it's when you say hey, I did a lot of work and I want your services, but how do i how I Transfer that value right.
What is OK, you you raise cows and I create chicken eggs how many chicken eggs would it cost to create for me to buy a cow way too many probably, and so we need one sort of stable unit of currency to store that that value of warrick Or production or good, and that's.
What money really is so money should be something that stores your value and when you have something like the dollar, that's, a meal or the pound or the yen, or pretty much any local fiat currency. That's.
The word for these paper currencies around the world. They're immediately, losing value the minute they're in your pocket, which is terrible, if you really think about it, for especially for people like to save money.
So Bitcoin got me excited because it's, a real savings account. It goes up over time. It doesn't lose value; it works because there only 21 million of them that will ever exist and only by the year 21 45.
Will they ever exist? We'll, explain why and just a little bit to the viewers. But the point is we actually have a deflationary currency because people lose Bitcoin and no more will ever be created and it's, a great hedge against these currencies right.
So we're gonna start out with some really simple questions. So bear with us, but there are people who believe it or not. Don't know what bitcoin is so Omar. What is a Bitcoin? What that is such a great question? Well, it wasn't, the first digital currency, but it is the first cryptocurrency that has gone mainstream, meaning it's, a cryptographic currency that is secret and private.
It lives only in the internet and there is a limited so long. What it is it's, a the first currency, only 21 million will ever exist. They're created via a process called mining whereby you leave a computer on in the corner, room or multiple computers, and they solve a very intense math problem that gets generated about every 10 minutes, and this math problem is sent to every computer around The world that is mining Bitcoin, however, the computer that solves that problem first, because it is the hardest working computer with the best parts and most up-to-speed parts, gets the reward.
Originally in 2009, it was 50 Bitcoin. However, what's amazing about Bitcoin? Is that every four years there's, this event called the havening, so basically the reward that is given out to the miner, the computer that solves that problem.
It has its own wallet built into the computer right, its own address so automatically 50. Bitcoin are sent to them every four years that reward gets had so then in 2013, for example, it became 25 at four years after that became 12.
5 Bitcoin. That was the last happening, so that's. The current ward. We have for the Bitcoin network and it & # 39. Ll continue to happen until we finally have all 21 million bitcoins which are currently not in circulation.
So it's beautiful as we talked about before deflationary all right. So why don't you go ahead and tell us what some of these other coin names are like aetherium and what are those so the first one was Bitcoin.
They all have slightly different ways that they work. For example, Bitcoin has these ten-minute blocks and a block is really a ledger. So a ledger, for example, is saying: Alice sent Bob one Bitcoin Bob sent sue three Bitcoin, so in order to keep track of a ledger really what that math problem we talked about previously was doing, was taking that ledger and making sure that everything was accurate, that No party could change that ledger, so you keep track exactly of where every Bitcoin and what address it is inside of you do this by something called inputs and outputs.
I cannot send more output more than I have coming in via input, so the system works. You do the math and you solve it, so you have these 10-second blocks, so every single block is think of it. Like one page of that ledger, then the Mac, the next problem comes up.
That's, another page of the ledger and you have what's called a blockchain app a a chain of Ledger's or a chain of blocks, which is what these Ledger's call digitally. So you can tweak that you could say I'm gonna have two point: five minute blocks and I'm still going to give out 50 Bitcoin every single reward, except I'm gonna call it bill Bitcoin.
I might call it fuzzy coin, and so that's, how some of these other coins work? They just tweaked slightly how it works, they might offer more transactions per second Bitcoin only offers maybe two point three to seven transactions per.
Second, so not very much it & # 39. S still got a ways to go for reaches of ESA's, level of 10,000 transactions per second, and it's, not very private, because any of us could go online to these things called block explorers plug in any address and see How many Bitcoin are inside of the dress and where it's going, and you can track this.
So there are different coins such as e cash that offer privacy. They use even more intense computing power while they mine in order to make these transactions obfuscated, so it's, pretty popular. It was popularized in the deep web, for example, places that you can do nefarious illegal activities in naturally, these individuals might not want the government to know about how that money is moving around, maybe for tax evasion or just simply privacy.
I don't want people to know how much money I have so that's Y Z, cash and some of these privacy coins equine, for example, are very popular. Also has something called instant send so sometimes on the Bitcoin network.
You might wait for two blocks before you get that confirmation of the Bitcoin are indeed set. So if we're talking about ten-minute blocks, I may be 20 minutes before that Bitcoin is sent so instead offer something called instant.
Send you pay a little bit more of a fee to the miners, but it runs really really quick and what's really exciting, also about which stands for digital cash? Is that you, if you hold 1,000, who gets it you get to create something called a master node a master.
Node gets the vote in what direction the blockchain goes so for, for example, anyone could write to the master nodes and say hey master nodes. I would like to fly an airplane that says on the side across the world and with the master nodes vote.
Yes to this, and if they amaz or'ti of the master nodes vote. Yes, that are staking 1000, you cannot move it. Then they can get funded directly out of the blockchain. That proposal will automatically get a reward of that created every single block and what's? Interesting? Is it you can stake so just by holding it in there.
You might get more like every single week or every single month that's exciting. Also, a theorem is probably the most exciting to me that's. Why I started this channel, it's. It's. It's created something called smart contracts, so programmable money for the first time, meaning it's, not just digital, but I can actually tell the money what to do.
I might send you money every single year on your birthday. If I'm, a parent - or I might create a contract to buy a house instead of having to go to a lawyer to do escrow and they hold the funds, while we clear all the paperwork, you send that money to a smart contract.
That's. What a theorem is a smart contract system and you leave it in that contract until both parties sign with their private keys or their aetherium wallets that indeed, the requirements of the smart contract have been met and the money goes where it needs to be.
So now we can cut out all sorts of intermediaries. We can cut out banks completely, we could create new financial systems and because it's, a turing-complete code system that was built for a theorem, you can actually write applications that can never be stopped because, instead of living on one server, they live on.
All of the people mining aetherium, so you'd, have to shut down the entire internet processing. These applications in order to shut down an aetherium built up like so theorem, has become very, very popular because of this.
You can think of any idea, anything that currently exists and poured it over from a centralized. You know Facebook or Equifax, which recently got hacked the credit monitoring agency and they had 143 million Americans information, Social Security, a names phone numbers addresses they got hacked because they weren't secure and they were one location.
Instead, you sent that information to every computer around the world, but I can only review that if I have the right wallet and key to that information which is completely different than the systems we live in now, so you can port, so many applications over threw it Into a theorem it's, got pretty much the whole world looking at this very excited.
So now that we know what these coins are and what they can do, how do we buy or sell these coins? So take the question: there are different websites, for example, the most popular one here in the United States is called coin based.
Calm very secure been around for a very long time. You literally go to coin based, calm or download their application on your phone. You send them, maybe your license me you a picture. They need to get this information to the right entities and the government, of course, and then you pretty much get valid and verified and you can just buy Bitcoin.
You link your bank to it to ask you for a bank account information and you buy Bitcoin you don't have to buy the whole Bitcoin either. So you know, bitcoin is five thousand dollars that doesn't mean you have to buy five thousand dollars to buy one Bitcoin.
You can buy $ 20 worth of Bitcoin. For example, you might buy point zero, zero, two three Bitcoin, but if tomorrow Bitcoin goes up one hundred percent, I mean whatever you put in there. If it was twenty dollars is now forty dollars, so it's, really approachable.
It's. Anyone can pretty much invest into Bitcoin at any amount. Five dollars a week, ten dollars a week, twenty dollars a week and then also, if you want to sell that Bitcoin it lives on that coin. Basic sound account, for example, if you keep it there and don't get your own private wallet, so you would just hit sell instead of black, keep clicking by finding out the current price and buying $ 20 a Bitcoin, and you say I want To sell $ 20 for the Bitcoin, so if it became $ 40 with a Bitcoin because it went up a hundred percent, you want, you might want to take out your initial investments.
You might sell $ 20, and I mean coin based recently also enabled instant purchases and sells so it'll show up in your bank immediately pretty much up to a certain limit. Yes, but it's. It's. That simple, and what, if we wanted to buy something that wasn't Bitcoin? There are more that's, a great question.
There are multiple exchanges that exists. Some of the most popular include Polonia x, pol o ni e x and that's, where this shirt is from. There was this famous robot, so people used to chat in real time while they purchased these different crypto currencies that exist.
So it's. Almost it's very exciting. Actually, because you you go on there and you find an order. Somebody's. Selling undercurrents you might want to buy. You might want to buy some Manero, so you go on there and somebody is willing to buy some bitcoin and sell you monaro.
So it's. That simple, you'll, see a bunch of different coins available and some of the more other popular ones include Beatrix, be ITT re X, minus B I na NCE crackin k, ra ki ke n, which you can purchase Bitcoin directly there.
I believe with a bank account or a wire transfer, but most of these you first need to deposit Bitcoin or aetherium. Before you can purchase, you can't just buy on there with your credit cards. You first need to buy somewhere like coin base and then transfer over to that exchange change it for whatever you want, and I would draw that to a personal wallet.
Okay, so basically bitcoin is your way in and then, if you wanted to get one of these other coins, you would have to then move your Bitcoin to an exchange where you can actually do this. How would we store these coins? We wouldn't want to keep them on this exchange.
Would we no you might not. For example, I mean we're talking about decentralized options versus centralized options, so you're keeping your coins on these centralized locations or somebody else managing your your coins and they suddenly went offline.
It & # 39. S happened before, or they had some sort of hack and your your coins can just disappear like that they're, not insured. Things are very unregulated right now it's like the wild wild west. So you definitely want to control your cryptocurrencies, so what I use is called the ledger.
Nano S Hardware wallet we'll, have a link in the description below, of course, once you have a sizeable sizable amount of money security - something you should definitely be aware of. If it's, if it's, gonna cost you more for these devices and then the actual amount that you have.
I would definitely hold off you're, not gonna be a big target. Probably these hackers just yet, but some the options include a paper wallet which is a wallet that prints out your private key, which is like the key to their mailbox.
It allows you to send those coins, so they'll, just prints out a bunch of numbers and letters and they'll, send prints out a public key as well, which is an address you sent to or would draw into that account.
So you can use a paper wallet. You can use a hardware wallet, which is what I'm talking about which never reviews your private keys. If somebody had your private keys, they could send all your coins, so you want to keep your private keys as hidden as possible, and these devices never show your private keys even to yourself.
You have to keep them plugged in in order to send so. Does that mean that the public key is accessible for people sending, but the private key is the one that you would need to to get your money out. Well, it exactly to clarify that further and I kind of ref I kind of referenced that right now, which is the mailbox and analogy which is you need anyone can send to a mailbox to appeal box.
Anybody can send you mail so that's like your public key, the address your peal box number and then your private key is the key to that mailbox. So you need to have the private key in order to get the mail and send it anywhere that's.
Somebody are you can also get Jack's wallet Exodus wall. Here software wallets a little bit more unsecure. You can secure them with a pin, but there might be ways that people can hack into that or get that information easier and the the last thing you probably want to do is keep them on at exchange, but for the people who have a little bit technical, Less less of a know: how technically might want to wait a little bit and get a little bit of experience as to how these keys work before moving their coins, because they are Unruh, triva ballif, you send them to the wrong address, just like cash, okay, cool! So um, what would you do if you lost your wallet? Good question depends what kind of wallet right.
So if you lost your username and password to these sites that you're keeping on exchange, you reach out to them and they might be able to verify your identity, you'll, get your funds back that way. So another thing is your paper wallet.
If you lose your paper wall and don't have a copy of that. Then it's gone you, you've lost it forever. Unfortunately, so be very, very careful if you lost your hardware wallet, they come with a 24 word phrase.
Basically, it comes with a piece of paper where you write down 24 words that they give you for your specific device, and if you lost your device, you would pull out that piece of paper order, a new device and restore using those words that'S simple, so you can lose them, you can burn them in a fire and you & # 39.
Ll always have access to that. If you have your your words now you don't want to take pictures of these words and put them online. Put them on Instagram, because there are ways people can get, that information yeah guys the minute you take a picture.
It's already geotagged yeah yeah, even if you have location off oftentimes, your Wi-Fi yeah. So our next question we touched upon this briefly earlier when we mentioned other coins, besides Bitcoin, but the actual specific term for that would be alt coins.
So what exactly is alt going? It's? It's. Like you mentioned a theorem. It's, just like Z, cash from an arrow. It's, an alternative coin, an alternative coin and another term. We see here a lot is ICO.
So what is an ICO? Another wonderful question else and that question the answer to that is that these tend to be fund raisers, that's. How primarily, what it is, the most popular ICO is or initial coin offerings that exist.
Right now are those built on the ethereal network, and so for example, I might offer a coin called fluffy coin and I would build it on the etherium network via smart contracts and in these contracts. I would say this contract would say.
If you send me five ether, I will send you five hundred fluffy coins and then in the future I'm going to program these fluffy coins to give me access to a new kind of YouTube that doesn't have YouTube in The center maybe taking more profit, and so you can create a platform.
So really I SEOs are a way for people to promise value or a platform in the future, and possibly even revenue. If you hold these tokens, you'll, get a trickle of whatever revenue the platform makes over time.
So it's, a way for people to raise money and most equated to IPOs or in public offerings. But you're like is you a stock or a share of the company? Instead, I issue you a share of the etherium based decentralized application death so that's.
One way, so an ICO basically is like. Does that mean it's, trying to raise money for not just the coin, but also for the technology that they're gonna be offering? Is that how that works? Yes see see, the whole thing about a theorem is that it takes central parties out of it.
So what they try to do generally is create, for example, a non-profit company, or they make up a for-profit company, and they say we're gonna develop this platform for the world, and so they will take that ether use some of that ether.
For marketing for development to pay the developers and hopefully, eventually wipe their hands clean, the platform is built and then they just let it run and it can never be shut down. It's books on the etherium network, so that's.
Generally, how these things should work over time these people take their hands out of it completely the developers. Now it's very, very early on so I mean we're, seeing that people keep developing on it and we don't know exactly if a lot of companies will take their hands out of it.
But yes, generally, that's, how it works and they might get revenue dividends. For example, there's. This one called either roll. So what they did was built a build, a smart contract platform. People can roll a bunch of dice on the etherium network on a website and you sent, for example, gamble one ether and if you've rolled the lowest certain number, you get a bunch of ether.
You might double your ether, for example, and then one percent of that goes to the house, and the house is really everybody who's. Holding these roll tokens gets a share of that, so it's already running, and so that's almost like a dividend, yeah well speaking of ether, the other day, we just had a fork yeah.
So what is what is a fork, and I understand there's, a hard fork and soft fork. What is the difference there? Wonderful question again: you're, so good! Well, if we were talking about the block change right, so the block chains being every few minutes or seconds or whatever that particular block chain, is whether it's, a theorem or Bitcoin.
What it does is that it has one history running our mining rigs or our computers. We're all validating all the Tran actions that have ever happened over time. It's beautiful. We all get a copy of that ledger and then we all make sure that it's, not manipulated it's, the same ledger and that we may connect in the next block has a new ledger with the new transactions that have Happened it's.
Beautiful system, you'd, have to control 51 % of the computers in order to manipulate and change that somehow so, the more and more people mining, the better and better. It is for security of the network, so it becomes more and more difficult for a government or anything to control it.
Now, since we all share that same history, it might come a point where you know one developer says: okay, I'm gonna create a wallet and in this wallet I'm gonna make it so it has 20 minute blocks Or Bitcoin, because I want to reduce the inflation so instead of 12.
5, every 10 minutes it's. Gon na be talking with five every 20 minutes. Every single page is now or block, is gonna take 20 minutes and he might have a disagreement with another developer. Who says hey? No, we think I should stay the exact same.
I think it should still say 10 minutes, but you want to have 6.5 minute blocks, and so you have a debate and you have an argument and at one point in time they might say on block 1,500,000 because they're all numbered.
We no matter what are going to on the next block with anybody running our software make it so it's 20 minute blocks, and so they do. What's called a split, so they came from the same history. Same block almost like a train and then that train kind of forth and we went on down two different paths.
Even though we came from the same paths and now you might have two different coins, you might rename this coin, but it really came from the same history, and so we've. Seen that happen with hard forts in part, a particular theorem was one of the big ones.
A theorem had something called a theorem classic, which happened, and so, if theorem classic and a theorem had the exact same history until that point in time, and now they have two separate communities with two separate groups of developers and that's, pretty much.
What that is so Bitcoin has had its own as well. Some people might want to upgrade Bitcoin because they want to increase the amount of transactions that can fit per block and they decide they thought it would be better this way and some thought it should stay.
This way and they would change the way the protocol works and this way to make it so more people can use it. But there were debates about that, and so we're having multiple hard Forks, which is incompatible with previous wallet versions.
I can't use the wallet version for 10-minute Bitcoin. If I'm now, using the 20 minute blocks, I can't send to that old address, so it's. Incompatible. Soft Forks are very similar, except they are compatible, so I can, for example, with this new Segway Bitcoin.
I can send to a non Segway wallet, so basically a soft Fork means I can still send to people who are using the old kind of software as well. So it's, just about compatibility. Yes, ok, so this is a. This is probably the best question out of all of them.
What about taxes? Excellent question: eles again so taxes, definitely something you want to be concerned about the official word that we here in the United States. Actually there is no official word. The word is dependent on which department we look at so it could be the IRS that looks at it looks at it like property, so they want to charge you like property, you might be paying 30 percent taxes, but only in some cases some lawyers and attorneys.
Definitely consult a professional will tell you that it's only when you sell to cash. So if I'm trading Bitcoin for aetherium, that might not be a taxable event right. I wouldn't have to report that later on.
In my taxes, however, if I'm selling Bitcoin on coinbase $ 4 and moving out to my checking account, I would want to keep track of that because I most likely would pay taxes for that. So that's, dependable! Really, if you want to be the safest, you'll record every single thing you do so, if you trade Bitcoin, for it easy cash record that and if you're a minor that's, something else too it's important if you're mining, you have to be aware that if I mined this cryptocurrency at this time at this price - and I sold it when it got to this price - then I'm gonna have to pay The tax difference, so, if you're gonna be very careful and cautious that's, really the way to approach this right now is to keep track of that.
There are different applications, however, that will do this. For you, there's. This one called Bitcoin tax. It plugs it plugs right into different exchanges, downloads, all the information and then asks you if you want it for if you mind, for example, some of that and it income from just trades.
You could input that as an exception, and it would make things very easy for you, but definitely check a professional that's very exactly is trading when you go to one of these exchanges and you trade, one cryptocurrency for another, that'S what it is now on Wall Street you look most of the trading that happens between different stocks, happens between 10 a.
m. and 4 p.m. New York time or a dependent. If you're in London or whatever it is so there's a time when the financial headquarters are open. What's great about cryptocurrency is that you can treat it whenever you want 24 hours a day.
You can find out what prices are at and you think you're gonna get a bangin deal on this cryptocurrency you buy when it's on the down-low and sell it was not when it's on up High and you would try to do that, so there are different kinds of trading.
There are day trading, which is throughout the course of the day. You have mental panic attacks every single time, the price ticks up and down or you could be a swing trader, which is a little bit better.
You wait maybe the whole course of a week and you look at the natural, Oh bitcoins headed down, but I'm pretty sure. Next week it's, gonna be moving up. So you follow that trend and you don't, just look at every single movement or you don't trade, it all and you just hold, which is usually unless you have 18 years of experience plus in traditional markets, or even this Kind of markets, as long as you have studied it, let's, say you're into cryptocurrencies.
You're into it for five years that maybe you should trade. But if you're, not you're, better off, holding it and time in the market beats timing. The market almost a hundred percent of the time, so it's.
It's, nice to look for a quick buck, but more than likely you're gonna end up paying that in fees lost money and at least it'll, be a learning experience. We all lose money at some point, but if you don't trade, you generally, nobody has ever lost money just holding Bitcoin, for example right.
So trading is a possibility. But if you are very new to the space it's, not really recommended, maybe take some time to become a little more familiar. If you move in today, there are these people called whales, and these whales have way more money than you and I and they will start doing what's called pumping a coin up the price so that people do what's called Fomo fear of missing out and then when the point starts, pumping more people are like.
I want to buy that coin. Cuz it's, gonna go to the moon they buy in and the price crashes, because the whale sells all the initial tokens that he bots bots on this exchange. The price starts going down and then you lose money so that's, the most common way people lose money is through manipulation or pumps and dumps, and so you have to avoid these as best as you can so pump and dump meanings.
They try to spread the word and get people into the space they try to drive the price up as high as they can. This is gonna, be the next Bitcoin don't miss out, then they dump it and then the price crashes.
Moving on to our next question, what is the difference between a centralized and decentralized exchange is the difference between. That is whether it's, built on smart contracts, currently so decentralized, meaning that it's held in contracts that exists only in numerals and there's, no server, no company in the middle.
It's just living on the mining nodes around the world. People mining. So these centralized exchanges, don't, run the risk of somebody running away with your money or getting hacked because nobody has ever been able to hack the Bitcoin network or the etherium Network, and you have all the best hackers in the world.
First, trying to infiltrate it in order to access Bitcoin and create Bitcoin, never been able to do it, so instead they create more security for Bitcoin. They actually improve the protocol, so we have some of the best minds in the world building for these kind of networks.
So you wan na decentralized exchange where the money doesn't live in in, for example, coin base or Polonia X. Instead, it's decentralized and they tend to be a little bit slower. They might charge you more Network fees, but that's.
What you pay for security, all right, I wanted to go ahead and bring up gold versus cryptocurrency. Gold has been used as money. You know that store of value for thousands of years. As long as we can look back in human history, we've, been using gold for quite some time, so Bitcoin only has about nine years of experience on it.
So people like to say you know or if something were to happen to the economy like we previously discussed and we can't get food on our supermarket shelves. We can't get water, then how are then? Who's gonna be running the internet right? Who is gonna, be running the internet and it's kind of world? It might be interesting because let's say there was a huge nuke that knocked out the power for the whole world, an EMP, then that would kind of stink, because you can't turn on your phone charge, your phone and access.
Your Bitcoin, so gold might be necessary in that kind of case, but so $ 1.00 right cash would probably still have value at that point, so it's, important to be versified and have different kinds of assets.
Now gold is great because it only gets created by supernovas it's, very rare. It's, precious. It's impossible to create people and alchemists have been trying to do this for millennia to create gold or turn lead into gold.
So it's very similar with Bitcoin. You can't create more Bitcoin. You can create a different alternative currency, but not Bitcoin itself, so yeah in the event that the internet was down, Gold would be pretty interesting to have.
The price would probably go up now. The issue is that gold is manipulated when you look at the spot price of the current exchange price for gold, that's, not really what that gold is worth it's, what these contracts that are being traded on Wall Streets on Different exchanges, such as the Comex, are being traded at so they create these extra pieces of paper.
Each piece of paper is backed by a little piece of gold right and instead of having just one paper, backing one piece of gold and trading that paper on the Wall Street floors. For example, if they wouldn & # 39, t be carrying around real barrels of gold, what they do is they print extra pieces of paper for every piece of gold, so they can keep the price down.
So if you're, looking for just an investment, if the financial system keeps trying as it has, we got a hitch, it hasn't proven to be the best investment Bitcoin works, either way, whether that works or doesn'T and if the big, if the internet were to go down even temporarily as soon as it came back up, you would have access to your coins again, and it would probably be worth a lot more true.
What we're gonna do here is I'm gonna go ahead and just shoot a word at you. You give me the explanation and we'll move on to the next one. So we're gonna start with fomo fom, o pretty sure we did this fear of missing out fear of missing out so that's when the price starts going up and you're thinking.
I don't want to miss out, so I'm gonna buy now, and then the price goes down tomorrow. Okay, so usually FOMO is used in that kind of sense when it's, driving the price yeah and then actually segways really want to a tip that I have for most people, which is set yourself a target.
If, for example, you know that the next happening event for Bitcoin is in 2020, and you knew that ever you know that every single time, a halving of that reward, happens for the Bitcoin network that the price goes way up, and you know that the next one Is 2020 then say I'm, not gonna sell my Bitcoin until 2020.
I'm gonna take a look and that's. Your target right, where I'm, going to sell ether until the end of the year, because I read the news. I looked at the news and I know this major upgrade is happening that month.
So you don't panic right! That's. What I love about my hardware wallet like one ledger and an OS, because if I have my keys inside this cryptocurrency of a device that is at home - and I'm at work - and I am refreshing, my price and I see, search going down And I'm panicking.
It's. Gon na be very difficult for me to leave work right and ask my boss to go home, because I'm, losing money on Bitcoin right and get that device out plug it in plus. I might just be lazy because the two most common traits to humans are fear and laziness right.
So I'm scared of the price going down and I'm lazy. I don't want to get to my device, so I think that's, one of the best things about that. Instead of keeping the money inside of your phone, it'll, be really easy to fear of miss out or or panic cell.
You set yourself a target or you get yourself a hardware wallet, and you say you know you put your target. First, you put a goal that's. Also. What makes it such a great savings account is that it's, not that easy to access.
So in a way you're kind of deterred and you'd, rather just leave it there. The other thing I wanted to say is guys you haven't lost any money until you have sold for US dollars pounds whatever you're using on the world.
We're gonna move on to the next one. The next one is FUD fu D: what's bud? That's, a good question, because it's, even though I've, been in the space for about three years. It took me about two last month to figure out what it actually meant.
I keep looking it up. Okay, the word means fear, uncertainty and doubt that's. What that means, fear, uncertainty and doubt, which is a word thrown around, especially on message board. Social media YouTube saying that somebody is creating fun about this coin.
You know I'm, holding big bags of this coin. You guys is saying bad news about this coin. You're, saying that this coin is a scam. That would be saying that this is fun. You're, creating fear, uncertainty and doubt in people's minds about whatever it could be.
Okay, so that's, kind of related to the whole pump and dump thing in a way it's, basically just ways for people to try again to drive the price either up or down according to. However, it will suit them best.
Let me see I had one, no, I two more moon. What does it mean when people say moon? Well, we had this. Lord called Vitalik the creator of a theorem, and he apparently is on the moon currently with the landbridge moon means that we are going sky high in the price that's.
All it means so people like to say Pluto. We're, going screw the moon, we're going to Pluto, so it's just for excitement purposes. Yes, it's, it's. It gets people excited it's, a community term, all right.
So this last one is my favorite one. It's hot old age odl. What is that? So? There was a it means hold on for dear life, some people say, or it means hold, but it's, a typo and most likely it's a typo.
There was a message board post on one of the most popular Bitcoin message. Boards called Bitcoin talk and this gentleman went on there to write a great post back in, I believe 2013, and this gentleman put him a topical threat together, and he said I'm here at this bar.
I'm out of your drink and my girlfriend's today. My wife and I Eve not a traitor and people is trading. The sin you know you missed out on this card. This coins going up and it's. Gon na go up, and I just I missed it and my friends are making money and I have no idea so I just idle.
I I don't know what I'm doing. You know. I know I made a typo but ha ha to life, how crew? I know I'm, a bad trader, my friends as best I love you guys, but that's. Me. I'm, a bad trader. I just Hottel.
I'm, a great hot oiler, yes, and then everyone blew up in that thread. They said. Okay, we're gonna make this a movement. This guy is the best, and so we all huddle now, which is time in the market, being beats timing.
The market you do not sell like she said they're, not realized losses or realize profits. Until you hit that sell button, you're, not real. We're gonna go ahead and wrap things up here. Unless you had anything final, you wanted to say yes well to go back completely.
So Bitcoin was the first crypto currency. Now you're gonna hear about others like litecoin. Better blocks gets the upgrades quicker, so it's like the test network for like coin, but I think a theorem is a very exciting coin.
Not just because of ICO is to raise money for companies that we talked about or smart contracts. Well, really, it is smart contracts. It's gonna enable so many different things by cutting middlemen out of there by putting our identities in our pocket.
Through platforms, like you port, it's, it could very well be the fabric of human society moving forward. I would look at companies like I began to say in the beginning of this conversation. Conversation such as Intel, which is making chips, computer chips that are in everything and you look at companies like Microsoft and all these companies are looking at something called the Internet of Things, which is when all of the things around us are connected to the Internet, and They all have chips inside of them that are extremely cheap chips, as you know, as Gordon Moore of Intel said in the 70s, get double as fast and efficiency every year and a half and half the cost, and so against this point, where you have people like Ray Kurzweil, a futurists from the singularity University and you have Michio Kaku kak you talking about this possible singularity where computer chips are in everything there's extremely fast and we get the ability to touch our wallpaper and it changes colors or we can Or shirt as soon as we put it on knows what temperature we like, or we can put contact lenses to have chips in inside of them into our eyes, so that we can get more rods and see more colors, maybe even ultraviolet, and we can begin to Augment herself, so if we're gonna have this internet of things and they're, all communicating each with each other.
You know you have Samsung creating their own networks. You need in order to access the Samsung network. You need a Samsung TV, a Samsung Refrigerator and a Samsung. I don't, know keyboard piano and they can only talk to themselves.
But what about Apple right? Because we have Android platform, you have the Apple platform and they cannot communicate to each other. They own different things, so if we could merge them together and have one fabric for all of humanity, that is decentralized.
How incredible would that be so I began to look at these companies and think: okay, who's, it gonna be, and then I found out about aetherium. I was frustrated about how slow Bitcoin was it wasn't. I was trying to send Bitcoin and I was paying higher fees to the Bitcoin network.
I was waiting forever for it to confirm. I found aetherium really to be really exciting, because the coins moved a lot quicker. It was a new platform that that was being built with such a positive energy and they had the smart contracts and they have some more contracts, meaning you can all put little knows little mining nodes inside of little chips and have that run.
Aetherium network at the etherium network and connect to the etherium network in order to plug into a smart contract. So now we can put smart contracts and everything around us and we can pay with little ether value for whatever services I mean we could have technology talking to each other as well.