"What yall think about Bitcoin?" is a question we are seeing more often on social media. I interpret the question to mean, "Can somebody tell me more about cryptocurrencies?" And with the most recent spike in the price of Ethereum and Litecoin, those 2 currencies have been added to the "What yall think about..." question. As a creative who has a substantial portion of income coming from online transactions, this is a market that is necessary for me learn. So over the last few months, I have been doing my homework to try to get a baseline understanding of the world of cryptocurrencies. In the process snatched up a hand full of Ethereum (ETH) and Litecoin (LTC) I just too "see what it do".
Well as of the date of this post, what it did this was, from the time I bought it in June, ETH has tripped and my LTC as increased by 1000%. And in my mind, all I can say is “f*#$!, I should have bought more!"
Firstly let's try and give a simple definition for cryptocurrency:
"a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank."
That's right. In simple it’s the elimination of the need for banks to conduct transactions. So now, let's go over the big 3 coins Bitcoin, Ethereum, Litecoin.
To put it simply, Bitcoin is a form of decentralized digital currency, created and held electronically. No one controls it. Bitcoins aren’t printed, like dollars or euros – they’re produced by people, and increasingly businesses, running computers all around the world, using software that solves mathematical problems. Although Bitcoin is not the first ever cryptocurrency, it is the first successfully implemented one. The biggest power behind bitcoin is that it’s a peer to peer network. It completely cuts out the need for banks to facilitate transactions. Check out this in depth explanation as to how bitcoin works. Understanding Bitcoin
The second crypto titan is Ethereum. Ethereum seems to be a software company. According to Blockgeeks.com:
At its simplest, Ethereum is an open software platform based on blockchain technology that enables developers to build and deploy decentralized applications.
Ethereum is not just a digital currency. It is an entire platform. Inside the platform, you can build any application you can imagine and encrypt it in Smart Contracts. A Smart Contract is just a phrase used to describe computer code that can facilitate the exchange of money, content, property, shares, or anything of value. When running on the blockchain a smart contract becomes like a self-operating computer program that automatically executes when specific conditions are met. Check out this simple explanation of Ethereum.
Check out this video that will give the simplest explanation of Ethereum that we can find
Litecoin is the third most popular of the trio and it is often referred to as the "silver to bitcoin gold". According to Litecoin's website
Litecoin is a peer-to-peer Internet currency that enables instant, near-zero cost payments to anyone in the world. Litecoin is an open source, global payment network that is fully decentralized without any central authorities. Mathematics secures the network and empowers individuals to control their own finances. Litecoin features faster transaction confirmation times and improved storage efficiency than the leading math-based currency. With substantial industry support, trade volume and liquidity, Litecoin is a proven medium of commerce complementary to Bitcoin.
Litecoin is a fork of Bitcoin using the original Bitcoin protocol. It has been developed to be more streamline and operate faster than Bitcoin. So why do we need Litecoin? Litecoin is faster and cheaper but there is not guarantee that will stay constant. But that doesn't mean that Bitcoin will squeeze out Litecoin. Litecoin adapts new technology than a much faster and efficient rate.
What makes these cryptocurrencies so valuable is the technology that they are built upon. The concept of cryptocurrency is sending shockwaves through the financial sector because it is based on speculation; the value of the possibility of a thing. That is what makes people so nervous. But to ease peoples nerves, lets put this unimaginable industry in perspective. Wouldn't you have loved the opportunity to invest with the Wright Brothers and the possibility of The Airplane? #SkysTheLimit!