Cryptocurrency 101

Cryptocurrency 101

Does cryptocurrency feel like it’s from another planet? We get it! Crypto can be confusing when you’re just getting started. So, let’s figure it out together! 🚀

It all started with Bitcoin…

₿ The idea of Bitcoin first appeared in a white paper published in 2008 by an author using the pseudonym Satoshi Nakamoto. To this day, no one knows if Nakamoto was one person or multiple people (very mysterious), but Nakamoto is widely believed to be the creator(s) of Bitcoin - the first cryptocurrency.

The white paper was released during the height of the 2008 US financial crisis when tensions between the public and banks were at an all-time high. Citizens were angry that financial institutions were being bailed out by the government, while people were losing their homes and life savings.🤕

💡 Nakamoto openly criticized centralized banking and proposed Bitcoin as an alternative way for people to transact without banks or other institutions. Also known as a peer-to-peer payment system.🤝

Bitcoin is inherently decentralized — meaning it’s not owned by any one person, corporation, group, or government. 🌐 Instead, supervision and decision-making authority is dispersed across all people in each individual blockchain network.

🧐 Nakamoto believed that by creating a decentralized financial system, the corruption and inefficiency, which can occur in a traditional financial system, would be removed. The dream was a truly democratic and fair system.

What are crypto’s unique features?

🌟 Although cryptocurrency is like fiat currency because it can be used as a medium of exchange, it has some unique features:

• 💻 It is only in digital form 

• 🌎 It’s not tied to any centralized authority like a government or a bank, so it can be accepted globally

• 🔐 It’s secured by cryptography, which makes it nearly impossible to counterfeit or double-spend

✨ Unique Features = Unique Benefits:

• Faster transaction speeds

• Reduced transaction costs

• Greater accessibility for people who don’t have access to banks

• Better security

• Increased transparency

🤔 Cryptocurrency coins v. tokens

What’s the difference between a coin and a token? Coins and tokens both represent a store of value. But there's a big difference: digital coins are always form of currency, while digital tokens can represent something that can be assigned a price.

Coins (think Ethereum or Bitcoin:

• Always operate on their own blockchain (Example: Bitcoin operates on the Bitcoin blockchain, Ether operates on the Ethereum blockchain)

• Act as money, provide store of value, and can be used as a medium of exchange

Tokens (think NFTs):

• Can operate on top of another blockchain

• 🪪 Has the potential for a wide range of functions like acting as a digital currency or identifier

• Usually represents physical or intellectual property like a work of art but is venturing into pieces of the music industry as well 💳

• Can be assigned a price

Want to learn how to purchase cryptocurrency, understand how it’s taxed, and more? Get in the know with our organized, compact course!

☝️ Next week…

In order for your crypto assets to be secure, you’ll need a digital or physical wallet. 🔐 A cryptocurrency wallet is how you access the keys to your cryptocurrency on a blockchain in a secure manner. Lose your keys, lose your crypto.

Next week, we’ll dive into the different types of cryptocurrency wallets and how they work.

Can’t wait? Sign up for our course below and learn how to secure your crypto today. ⬇️

Feeling a little more grounded in what you know? 🤩 There’s still so much to be discovered! Stay tuned as we release more educational content every Wednesday!

_{DISCLAIMER: This is not financial or legal advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.}