Although I wanted to jump right into investing and watching my money just roll in, the logical part of my brain knew that I needed to understand fully what Blockchain was and how it played into the big picture. I started watching a video and I fould a site that explains what Blockchain is in plain English.
What It Is
Blockchain is a public record of transactions. It’s also distributed, so instead of one person controlling everything, there are thousands of computers around the world connected to a network, and these thousands of computers together come to an agreement on which transactions are valid.
Whenever someone makes a transaction, it is broadcasted to the network, and the computers run complex algorithms to determine if the transaction is valid. If it is, they add it to the record of transactions, linking it to the previous transaction. This chain of linked transactions is known as the blockchain. Since the transactions all reference the one before them, you can figure out which ones came first, thus ordering them. Full article here. Ok, since I have some IT experience and understand networks, this made sense to me. I guess the next question was…How is the Blockchain secured? I will cover this in my next post on mining and tokens.
While it is easy to think that you can instantly get rich mining Bitcoin, the reality is much more complex.
Once you factor in the cost of the equipment, maintenance costs and the electricity, you are definitely eating up a large chunk of your profits.
That brought me to my next thought..how do miners make money? I know that they do get Bitcoins and fees as payment but does that still make it worth it in the long run? Upon further research I found out that there is something called “Cloud Mining”.
Cloud Mining takes the approach where a group of individual miners contribute to the generation of a block and then split the reward. The method of this seems easy enough, but again, it’s not without risks. It’s not certain how much money you will ACTUALLY make. It depends on a lot of factors happening at different times. You would definitely have to do your research to make sure that mining is worth your time and energy. Bitcoin.com has a lot of information on mining and offers a cloud mining service if your interested. If you have some time and want to make some money, mining just might be for you.
As much as I want to jump right into Bitcoin trading, I know that I must do my due diligence so that I don’t get scammed as a newbie.
Since there is so much news about crytocurrency scams these days, I wanted to know what to look out for, and after a little digging I came across some very good tips.
I won a new crypto wallet last year at a conference and I already knew that the issuing company was reputable but I found out later on that you really do have to do your research to make sure your dealing with good companies right from the start. Check out reviews and talk to others that have dealt with that company directly. As far as exchanges, make sure that you are checking prices and also make sure the site starts with HTTPS which is a sign that the traffic is encrypted. If it sounds too good to be true (and promises the world) – it probably is.
Of course we all know about fake websites that bait and switch visitors but what I didn’t know was that this tactic is being used in the crypto space via social media (See video below). ICO’s – Don’t deposit your coins ANYWHERE until you fully vet the ICO that your thinking of investing with. READ the white paper carefully.
It’s interesting that I was looking into mining just a few weeks ago. Turns out this is also an area where you really have do your homework and be realistic about returns on investment since they will probably go down a little over time and you have to be wary of sites that promise you otherwise.
I’ve ultimately decided that I’m going to read a few crypto articles everyday along with my favorite blogs so that I can start to spot things that would stand out as a red flag right away. I also read Investopedia for all things financial. They have some great articles on crypto as well.
Ok so we know the bitcoin halving is coming this year but exactly what does that mean to me?
First, lets figure out what bitcoin halving IS.
What is Bitcoin halving?
An event that halves the rate at which new Bitcoins are created. It occurs once every four years.
As many know, Bitcoin’s (BTC) supply is finite. Once 21 million coins are generated, the network will stop producing more. That is one of the main reasons Bitcoin is often referred to as “digital gold” — just like with the yellow metal, there is only a limited amount in the world, and someday, all of it will have been extracted.
Right now, there are around 18 million BTC in circulation, which is roughly 85% of the total cap — but it doesn’t mean that the cryptocurrency is about to reach its limit any time soon. The reason is the protocol, which has been coded into the blockchain from the very start: Every 210,000 blocks, it performs the so-called Bitcoin “halving” or “halvening,” and producing new coins becomes more difficult — just like in gold mining where finding new deposits becomes more challenging over time.
More specifically, the protocol cuts the block reward in half. So, every time a Bitcoin halving occurs, miners begin receiving 50% fewer BTC for verifying transactions.
Ok, so I guess this creates a supply and demand situation which is pretty interesting but what does that really mean as far as the price of Bitcoin in the future?
Will the Bitcoin price change?
Historically, the price has gone up following a halving, but it ultimately depends on the supply/demand ratio.
Essentially, Bitcoin halving cuts down the supply of BTC, making the asset more scarce. If the demand is there, the price is likely to increase. There are also some historical precedents. On Nov. 28, 2012, the day of Bitcoin’s first halving, the cpryptocurrency’s price rose from $11 to $12, and continued to climb up throughout the next year, reaching $1038 on Nov. 28, 2013.
Roughly four years later, a month before the second halving, Bitcoin’s price started to follow a similar, bullish pattern. It surged from $576 on June 9 to $650 on July 9, 2016 — the day the block’s reward was reduced by half for the second time in the asset’s history. Again, BTC continued to accelerate through the next year, albeit with occasional turbulence, and traded at $2526 on 9 July 2017.
Will it be the same next time? Skeptics believe that the halving has already been priced in (remember this year’s epic, but short-lived systematic price increase?). Although, there is no scientific way to verify this.
Moreover, the industry has drastically changed over the last four years, as cryptocurrencies — and Bitcoin in particular — became an essential part of mainstream news coverage. Still, some people might be tempted to take the chance, especially given the previous patterns exhibited around Bitcoin halvings.
Consequently, if history repeats itself and the Bitcoin price starts going up in April 2020, even more traders might start buying the asset out of a fear of missing out, thus stimulating the demand, and, ultimately, the price.
Hmm..well, I personally believe in the success of Bitcoin and crypto currency in general so I’m excited to see what the future has in store. I take the bullish approach and see a strong and upward trend. Curious on your thoughts as always!
If your anything like me you want to save money on autopilot. I love when I get cashback or coupons for doing things I do on a normal basis. I have Honey and Rakuten attached to my Chrome browser so that I can save automatically when I need to buy something whether its something I need, a gift, or a treat for myself. Anyone familiar with these sites knows how it works. You get cash back automatically just for shopping online.
Just this week I learned that that Lolli is the crypto equivalent to this same structure. Lolli has just partnered with Kroger supermarkets along with many other high end retailers like Nike, Udemy, Booking.com, and Macys just to name a few. What I found especially intriguing about this is that I Shop at Kroger every week. Hey…why not get some free Bitcoin while I’m shopping! Kroger only offers pickup and delivery through Lolli. I was so excited to see Kroger on the list because grocery/drug stores are a big bonus with a cash back type situation. I think this will be a great way to bring in early adapters to get their feet wet with Bitcoin without feeling uneasy.
After reading some reviews, I did notice a few hiccups like slow processing/payment but I still think its worth a look if you want to open the door the Bitcoin and crypto without the risk. The best part is that you don’t have to invest anything up front, the Bitcoin is accrued and held on the exchange.
Ok, I know the next question is, how do they get paid? Lolli partners with top merchants who pay them when people use Lolli to shop their site. They then split that payment with their users, sending free bitcoin to your Lolli wallet. Its safe, easy to use and free. Sounds like a great to start to the Bitcoin world to me. Hopefully they will add other supermarkets to the list because in my book that is the easiest and fastest way to earn Bitcoin. You have to buy food right?
If you wanted to get started with Lolli, download the Chrome browser and create a account.
Please let me know if you use Lolli and what your experience has been.