I almost hesitate to write the name out of sheer exhaustion at its ubiquity-but, deep breath, here it is: cryptocurrency. Are you currently as tired of hearing regarding it because i was only a few weeks ago, when explanations of it usually centered around Bitcoin-in addition to breathless narratives of its life-changing, bank-account-invigorating wonderments, popped up everywhere turned in my news reading, my Twitter-feed scrolls, and my newspaper lifestyle trend pieces? When certainly one of my close friends started ranting and raving regarding the entire “blockchain revolution” and his awesome recent decision to toss some cash into further reading (that have, yes, gone from $900-something at the start of last year to around $20,000 toward the conclusion of the year, at the time of this writing, it hovers around $11,000), I vented my rage in the entire puffed-up concept by demanding he illustrate to me what type of hectic nonsense this whole scheme amounted to.
Do you know what? It’s not really that complicated. But yes, right about now seems an apt time for an all-important notice to my dear readers: You’re going to read financial advice from somebody who until a couple of weeks ago had, within the entirety of his life-aside from some fairly rote 401(k) behavior-committed to the stock market exactly once. After I was 13, a company-savvy family friend mentioned something about Chrysler staking their bottom line on the new kind of car; if it worked, he explained, the company’s stock might skyrocket; if this failed, obviously, the organization was finished. Somehow, I were able to buy a handful of shares of the stock at about $3-that i then sold around the time the stock peaked a few months later somewhere around $16 or $18, netting myself a handy hundred bucks approximately combined with the right to pat myself in my greenhorn greed-is-good back. But having once ridden the white lightning by using these blistering success, I thought, Why not quit as i was ahead?
Understanding crypto, though, is straightforward-with some assistance from Samuel Taylor Coleridge’s perpetually useful willing suspension of disbelief. You don’t need to browse the myriad stories and posts and think pieces concerning how to understand crypto, or Bitcoin, or perhaps the coming transformation of our entire method of doing everything: They’re generally overly complicated and, perhaps most importantly, just not so much fun. Can One teach you precisely how blockchain technology-the DNA of crypto, in the event you will-works? Of course not. I will tell you which it works something similar to this: Bitcoin as well as other cryptocurrencies basically record every transaction and distribute the records of such transactions equally for all parties involved. Every now and again a “block” of those transactions is verified and essentially sealed up and stacked on top of the very last block, developing a chain.
In the cryptocurrency world, these “transactions” are users buying and selling different cryptocurrencies, usually as virtual “coins.” (A number of the more well known ones: Bitcoin, Ethereum, Ripple, Litecoin.) When people talk about the “blockchain revolution,” they’re generally noting the blockchain can be used for secure transactions of virtually any type: storing and moving birth certificates, votes, insurance claims, whatever. The revolution I’m focused on most presently, though, is the one about to take place inside my banking account.
Here’s where the skeptics are available in: “But these ‘currencies’ are derived from nothing!” they wail, gnashing their teeth and furrowing their brow. That I summon all the high-minded derision that this one-time philosophy major (I jettisoned that idea faster than my Chrysler stock) can summon in responding: “Since Nixon took us off of the gold standard in 1971, our entire monetary product is based solely on shared assumptions, man.” The dollar bill is, at root, a bit of paper which includes value only as it relies on the “full faith and credit” of the us. Well, crypto is like that, with one exception: It relies on the “full faith and credit” of . . . of . . . of whoever chose to write the white paper that declared the particular cryptocurrency in question as a thing of worth. (In Bitcoin’s case, that individual, or population group, operates within a pseudonym-see above in re: willing suspension of disbelief.)
So, yeah, it’s sketchy. (Riddle me this, though: How many concepts that you know of this begin with “crypto-” aren’t?) Let’s put a good spin on it, though, and refer to it as untested. And then let’s test it. Honestly, it’s the best way to figure it all out. Here’s what you do (or don’t do, if you’re the kind of person that has qualms about putting your cash axtisi hazy concepts which could collapse in a moment’s notice but that can also be the magical money-spawning harbingers of our own collective future): Take the kind of walking-around money that you’d blow on a pair of shoes that seemed essential for about 5 minutes, or perhaps the equivalent of an enjoyable-but-forgettable night out on the town. Open up a Coinbase account. Coinbase is definitely an exchange for the biggest cryptocurrency players-consider it as the New York Stock Exchange for crypto. It’s where you buy and sell coins, or fractions of them. (Just trust me on this one: Coinbase is every casual player’s entrée; it really is to crypto what AOL ended up being to getting online in the early ’90s.) You link credit cards for your Coinbase account and purchase Bitcoin, Ethereum, or Litecoin. (Bitcoin, while a bit Captain Obvious, will be the crypto that’s most easily transformed into other sorts of coins; it’s also the one that’s most generally accepted as payment for actual products or services, from OkCupid to Etsy for an alpaca farm in rural Massachusetts.)
So, yeah, it’s easy. And yes, it could be addictive. As opposed to reflexively checking Twitter or Instagram while waiting for the train, I’m now watching the sine curve of my crypto account using one of countless apps. My Twitter feed has a new, almost psychotically geeky component: Crypto Twitter. My partner came home the other night from a particular date to find me watching neither tennis nor politics but, rather, a YouTube video of a teenage boy who I likely wouldn’t trust just to walk my dog dutifully explaining how you can convert Litecoins on Coinbase to Ripple coins on that aforementioned China-based exchange, Binance, utilizing the GDAX exchange as being an intermediary host to be able to avoid trading fees. (Reader, it worked!)
So, how am I doing? With a whole two weeks under my belt, my main anxiety over my “investments”-it still feels a little grand to utilize the term, considering that the midnight-sweats a part of my psyche is still convinced that this Trading Bitcoins is an invention of Chinese intelligence to raid our pocketbooks after their Russian neighbors raided our democracy-is they are, well, maddeningly stable. The $400 worth of Litecoin I started out with (I bought in a dip in the market) is maybe $20 down; the $400 in Ripple that I jumped on the week later during the things i thought had been a preposterous low is up only a $20 roughly; and also the $200 in Bitcoin i dutifully purchased several days after that is basically the identical. (There already is, though, One That Got Away: After looking at the proverbial “hot tip” from what appeared like a credible source on Twitter, I yearned to get the XLM coin from Stellar, which, the source said, was poised to “take off.” Yee-haw! Needless to say, this is exactly the kind of thing I told myself I wouldn’t do-at least until I learned much more about how all this works-therefore i didn’t. Also obviously: The coin, that is up almost 30,000 percent within the last year, gained another twenty percent inside the day or so since i have passed it up.) I’ve even got a new “digital wallet”-it is possible to store your hard earned money on the exchange you purchase it on, though, up to now, only Coinbase guarantees it, so it’s recommended you keep funds on these tiny bits of hardware-but, given the insane demand, it’s on backorder until March, so until then, well, Bitcoin better have my money.