Cryptocurrency Explained: Bitcoin, Blockchain, and What You Need to Know

Frank Bravo 0:07
Hi. Welcome to your technique over the podcast that gives you tips and tricks to help you simplify and get more out of the technology in your life. I'm your host, Frank Bravo. When you think of cryptocurrency, I'm sure it's a term wrapped in a layer of mystery, and it's something that we've been hearing for years, but you may just not know what it is. If you've heard of Bitcoin, Ethereum, or maybe even Dogecoin and you've wondered what it's about, then you're in the right place. Today's topic is cryptocurrency and I'm here to help you understand it. If you don't understand it, let me just start at the beginning. At its core, cryptocurrency is just a type of digital money. But unlike the US dollar in your wallet or the balance in your bank account, it's not issued or controlled by any government or institution. Instead, cryptocurrency operates a technology called a blockchain. A blockchain is a decentralized, distributed ledger of records and transactions across many, many different computers. Think of a blockchain as a digital receipt book. Anyone can look at it, but no one can tamper with it. It's secure, transparent, and designed to prevent fraud. Bitcoin was the first well known cryptocurrency, and it was created in 2009 by an anonymous person or a group. It started as a version of digital cash, which can be sent by people back and forth without needing a bank or a middleman. The idea is kind of like what PayPal and Venmo is to regular currency. Since then, thousands of different kind of cryptocurrencies have been created, each with its own feature and its own use case. Cryptocurrency uses cryptography or encryption, if you will. Which is where we get the name. To secure the transaction. When you send or receive cryptocurrency, the transaction is verified by a network of computers. These computers work together to ensure that the transaction is legitimate and then it's added to the blockchain. You might have also heard the term mining. Mining is also related to cryptocurrency. When you mine a cryptocurrency, it is the process in which new coins are created and transactions are validated. It involves solving complex math problems using powerful computers. People who complete these problems are called miners and they solve the problems. And the first to do so gets to add it to the blockchain as a transaction. This is the reward for creating new currency in current cryptocurrency. A quick shout out to listeners like you who helped make your tech make over possible. Your support helps keep this podcast going and I truly appreciate it. Want to contribute? Just click the link in the show notes or visit your Tech makeover.com plus as a special thank you, supporters who give $25 or more will get $25 off a one time consultation with me to help you simplify your tech. Thanks for being part of the Your Tech Makeover community. Now back to what I was saying. There are a few different ways that you can acquire cryptocurrency. Probably the easiest is to just buy it. There are lots of different ways to do this, and there are lots of exchanges now that interact with tools that you use every day. You might even see it in PayPal. If you are in PayPal, you can buy it through Coinbase or Bit Lance. So there's lots of different ways that you trade real traditional money for cryptocurrencies like Bitcoin. You might also earn it. So some people accept cryptocurrency as a payment for goods or services. I've looked at this and decided this might not be the best thing for me, because most of my clients aren't using Bitcoin. But if you're a freelance traffic designer, you might decide to take Bitcoin instead of cash. I am not ready to start opening that up to my clients, but like I said, it's out there. If you have powerful computers, you might decide you want to try mining. As we discussed, mining is a way to earn cryptocurrency, but it's not for everyone because it requires some pretty specialized hardware, a lot electricity, and some technical know how. Finally, there are ways to get free cryptocurrency. I'm actually doing this using walking apps. As people who know me know, I like to get out and walk and I turn my steps into cryptocurrency. It's very small amounts of money and it's usually for a particular coin, but these rewards will add up over time. It's not something that you're going to get rich quick on, but if you want to just to kind of get some cryptocurrency, you would you could look at something like that. One thing that keeps people away from it is not knowing how the pricing works. Cryptocurrency prices, and if you've been watching the prices as of late, is like a roller coaster ride. One day, Bitcoin could hit a record high. The next day it's down 15%. Here are some factors that do influence the pricing. The first one is supply and demand. Like any market, if more people want to buy the willing to sell it, then the price will go up. Utility is also another thing that drives the currency price. For example, Ethereum supports small contracts, which programs that are programs that run on the blockchain. This makes them valuable for developers building decentralized apps. There's also market sentiment. So new stories, tweets about influencing figures. We're looking at you. Mr. President and Elon Musk or the general public interest can sometimes send the price soaring or cause it to tank. Government regulations is another thing that sometimes interacts with the price. For instance, if a country bans bitcoin the price may drop. And then finally scarcity. Some cryptocurrencies have a fixed supply. Bitcoin, for instance, is capped at a certain number of coins. 21 million as of this recording. But it's built in. It's that built in that can drive the prices up and increase domain. Maybe you're thinking, why does currency matter? Well, cryptocurrency represents a shift in how people think about money and financial systems. Since cryptocurrencies don't rely on banks or governments. Decentralization gives you more control over your money. And because it's globally accessible. Anyone with an internet connection can use cryptocurrency, making it a super powerful tool for financial inclusion. There are also technologies like blockchain that have sparked a wave of other ideas and innovations that come from this decentralized financing. Things such as NFTs could be another way to show that cryptocurrency is working in its best form. The biggest question that most people ask is, is cryptocurrency safe? And that's a great question. But the answer kind of depends. Cryptocurrency is secure because of the nature behind the technology, but it's not immune to risks like hacking or scams or violations of and volatility. People sometimes put a lot of data into encryption. So if you forget your password for your coins, you may lose all your coins. We've all seen movies where they show the cryptocurrency wallet, and the person not being able to know the password for that wallet and worry about losing their coins. So what if you want to dive into cryptocurrency? Here's a few safety tips. First, use a wallet. A wallet is where you store your cryptocurrency and make sure it is reputable. Hardware wallets, such as physical devices are great and usually the safest option. But it also makes it hard to access it. Do your research before buying into cryptocurrency. Understand what it is, how it works, and where it might align with your goals. Beware of scams. You know it. If it's too good to be true, it probably is. There are a lot of phishing emails and fake websites out there that try to sell you cryptocurrency. And finally, make sure you do just like any traditional investment. Don't put all your eggs in one basket. And if you're looking to get into it with real money, there are funds on the stock exchange that do exchange cryptocurrency. So that may be a good way to get into cryptocurrency while looking at your bigger portfolio and your money. Cryptocurrency might seem super complex, but at its heart, it's about creating a new way to think about money and whether you're just curious and dipping your toes into the crypto world, or you want to stay informed and go full bore. I hope this has been helpful and let me know if you're interested in your doing cryptocurrency trading. If you have any ideas for an upcoming topic, you can always let me know as that as well. Please feel free to contact me via email at Frank at your Tech makeover.com. That's it for now. Thanks for listening to your tech makeover. If you haven't already, make sure you follow your tech makeover on your favorite podcast platform so that you don't miss an episode. You can also check out your Tech makeover.com, where you can find more information about this and other places to listen. If you want to find out more about me, please visit Bravo. Dot com. Until next time, I'm Frank Bravo, and this has been your tech makeover.