Sunday, August 5, 2018

Decoding Cryptocurrencies

By now, you’ve probably heard of Bitcoin which means you’re on the spectrum ranging from heavily invested to totally spooked.

If you’re closer to spooked, allow me to share some simple facts.

Bitcoin is the first decentralized, unregulated, most popular, most valuable, cryptocurrency, sometimes call digital currency.  Bitcoin is the first, but far from the only cryptocurrency.  Other popular cryptocurrencies include Namecoin and Dogecoin (commonly referred to as ALT coins).

Unlike traditional currency, cryptocurrencies rely on cryptography and blockchains.  Even kids in primary school use basic cryptography to pass secret notes to each other in class.  However,  blockchain is a term more familiar to hardcore coders than casual internet users.  In this case, a blockchain is a distributed network of verifiable, updated, encrypted and synchronized ledgers.

Blockchains are maintained by “miners” who receive a reward and/or transaction fee for updating, maintaining, verifying the blockchain.  There are a fixed number of bitcoin, 21 million to be exact.  And “mining” bitcoin requires an increasing amount of time and computing power.

Cryptocurrencies are virtually impossible to counterfeit, hack, duplicate or accidentally “double spend”.  It’s these remarkable features that help bitcoin and other cryptocurrencies to retain their value.

The trifecta of features including anonymity, security and potential reward combine to make cryptocurrencies very attractive to criminals, failed Governments and legitimate investors.

Are you ready to jump in and invest?  Well then, you’ll need some money (which kinda goes without saying) and you will also need to set up a “wallet” on an “exchange” such as Coinbase.  It also goes without saying that you should always backup your data including your private and public key.

We can thank Satoshi Nakamoto for the invention of bitcoin back in 2008.  I’d like to tell you who Nakamoto is, but no one really knows.  We don’t know if Nakamoto is a person or a group.  Like bitcoin itself, the Nakamoto’s true identity is secure and anonymous.

Tech4Life airs every Wednesday morning on @RJR94FM at 8:15 AM