Bitcoin Dreaming, or How Cryptocurrencies Are Changing My Life
The world of Bitcoins and crypto currencies is growing very rapidly! I keep diving deeper and deeper and it simply never ends. In the past several months I have taken courses on Udemy, read books, scoured websites, and participated directly in various aspects of the bitcoin economy.
I just added a bitcoin-mining related website to the websites visible on my profile {note: 3/12 edited out the link to my website to avoid appearance of spam}. It needs work, but I should at least open it up so I can start getting some feedback. I started the website when I decided to join BitClub Network--a bitcoin mining pool with an affiliate program built into it. I have since joined another mining pool as well--Genesis Mining, which does not have a network marketing component (I joined Genesis specifically to mine Ethereum, a kind of Bitcoin 2.0 technology that has really caught my interest). I have also become quite involved in trading cryptocurrencies on an exchange called Poloniex (it's similar to Forex trading, but a lot more volatile). There are over 300 cryptocurrencies that have been created since Bitcoin, but most are small and are not on the exchange markets.
The good news is that these efforts have been making me some money. Some of it comes slowly--like a 600-day mining contract that just drips payments in day by day. Some of it can come quickly--several cryptocurrencies I have traded have risen more than 20% in a day. (caveat--they can also go down very quickly! . . . hence the importance of setting stop loss orders)
The bad news is that there is a pretty big barrier to entry--it's not so much a barrier of cost as it is a barrier of knowledge and understanding. It takes a while before you start seeing why Bitcoins would have value--how can a "bitcoin," which I cannot see or touch, be worth more than $400 per "coin?" Especially when 5 years ago it had no value! How can something digital be "mined?" What do people mean when they talk about the "blockchain?" It takes a while to figure out what is meant by a bitcoin "wallet" and the differences between "hot" and "cold" wallets, why you might want several different wallets. What is a satoshi? Who is Satoshi? It took me several months before I felt I understood cryptocurrencies enough to start trading in them (happily, once I started it was easier than I had anticipated).
If it is all so complicated, why even bother? A few of the many reasons:
- Remember back when nobody had email and people wondered why in the world you would want an email address? Or go back a little further when people wondered what "www" was all about and why someone would want to get onto "the internet." Bitcoin is kind of the internet of money. It WILL change the world's financial systems, and being at the start of the wave definitely has advantages.
- Can you think of any other investment in the past 5 years where you could have earned more than 10,000%?
- Do you trust your government 100%? How about big banks? If not, you may want to consider Bitcoin because it is the first currency that cannot be controlled by any government or bank. Nobody can devalue it by dumping millions of bitcoins into the economy as a "stimulus package."
- Crypto currencies are a big wave (BIG, like internet big!), and there is a lot to ride. Look into what Ethereum aims to accomplish (voting, contracts, mortgages, and more could change drastically using this coin): https://www.ethereum.org/. What about MaidSafe? Creating an internet run by individuals instead of corporations? Online storage that is completely encrypted and distributed? http://maidsafe.net/ has some BIG ideas!
- Do you have any idea how easy it is to invest in cryptocurrencies? This has been a very pleasant surprise--I have traded in stocks for quite a few years, but this is much simpler to do.
- Take a peek at the drastic jump in price of Ethereum this month! https://poloniex.com/exchange#btc_eth (up 28% in the past 24 hours! This is not an uncommon type of movement in these crazy-volatile markets). You can get started with ridiculously small amounts--when I began trading cryptocurrencies (just 10 days ago) I was risking no more than $8 on a trade.
My kids and my wife roll their eyes and immediately tune out whenever I start talking about anything related to Bitcoin, so I pretty much keep all this to myself. My website is a place for me to at least start to share what I have learned, and to hopefully help others make sense of all of this. There are so many resources already out there, so I am not sure how to make mine different.
Like I said, I'm interested in feedback on website (sorry, removed link to avoid spam, but you can still find it from my portfolio). I even have an incentive!! I'm willing to give you one on one help to get your first bitcoin wallet set up, and I will make the first deposit into your account of 2000 satoshis!
Before you get too excited, you should know that this amounts to 0.00002 bitcoins, or about $0.00836--that's almost a penny for your thoughts!! (I'll bet YOUR currency doesn't let you be literal when you offer people a penny for their thoughts!)
Happy Trails!
~Kevin
Recent Comments
12
Hi Kevin, Enjoyed reading your articles and will be taking a very close look at your website. Will contact you by private mail.
I should probably adjust this post now that my initial enthusiasm has quieted down to a more reasonable level. . . I still am excited about the ways in which cryptocurrencies are changing the world, but that change is gradual and it is not clear who the winners will be. Bitcoin and Ethereum are definitely the top dogs in this digital realm but there are other cryptocurrencies with big aspirations that may find their niche.
SPAM? Obviously I'm more than a bit enthusiastic about cryptocurrencies, and that may show up as being spammy. I would like to modify this post to make sure it fits in the NO SPAM guidelines. I can take it down if needed, but prefer to just modify it. What in the post sets off your internal "spam flag" warning system?
Wow, I have had an interest in bitcoin and have done some reading on it. I know that it is commodity backed and onle a set amount can be added every year. I also know that it is independent of governments
But that some cities use it. I read a history that a form of this goes back to Ben Franklin and has been knocking around for many years.
U dabbled in binary trading, which included forex untill I realized that the stress and profit margin were not for me. I will check your site.
I would like to diversify but am not to sure I want to get involved in another time-consuming venture.
Marty
Marty, there are certainly some Libertarian ideals built into Bitcoin that have been around for a long time. This is the first time where person-to-person transactions can take place across any national boundaries with no middle man. If I wanted to send a friend in London or Nairobi $5 it would be practically impossible--the bank fees for a wire transfer would be much higher. Remittance companies like Western Union would not deal with such a small amount. With Bitcoin I can send $5 or even 5 cents (or $5,000,000) all within minutes. Nobody can decide whether or not I am allowed to send or my friend is allowed to receive.
I am trying to trade with a set of mechanical rules so I don't have to stress about things. I have not figured out how to completely automate it, but each time I get a little more streamlined. I have a set of rules for when I will enter into a trade, and I set up a stop loss so I can never lose more than 2% of my portfolio in a trade. I anticipate losing more often than I win, but I anticipate my wins to be big enough to compensate for a series of losses. So far it is going well, but it is too early to really say. I can say that trading fees are significantly lower than trading stocks, that setting up an account is significantly easier, and that trading very small amounts is possible in cryptocurrencies whereas it is not possible with stocks. My total initial investment was a whopping $420 (1 bitcoin), but I could have started with $40 or even $4. I wanted 1 full bitcoin so I could "feel" rich in my trades: a dollar is divisible to 2 decimal point ($0.01 = 1 cent) while a bitcoin is divisible to 8 decimal points (0.00000001 BTC = 1 satoshi). So, rather than thinking I had $400 to invest or 1 bitcoin, I thought "I have an account that is worth 100,000,000 satoshis!!!" Several of the cryptocurrencies are trading for amounts less than 100 satoshis, so it makes me feel like a big wig.
Another funny thing with being able to divide bitcoins so small: I can give my 11 year old daughter or 16 year old son their own account and fund them with 100,000 satoshis (about 42 cents--but they don't need to know!!) and let them make real investments with their account. They can learn by doing. I am thinking of starting a "cryptocurrency trading club" on the campus where I teach. If I can get a few students who want to try it out then I will help them get set up with a "million-satoshi" trading account for about $4 and each week we could meet together and compare our investments, discuss strategy, etc. Maybe we could have "club dues" of 100,000 satoshis/week, and whoever had the best results that week gets to collect that pot as the prize!
Kevin this is all very interesting but I don't know if I have the time. I like that you can start small and feel big. To learn the ropes before you make a big investment is a good thing.
Marty
It can definitely take a lot of time, so I totally understand not wanting to get into it. Don't worry--it's not going to go anywhere, and it should be easier, not harder, to be involved later.
Just like website building. Innovation brings improvement as time goes on. There is a binary tradeing co, that lets you start for $20 and make $1 trades. I was thinking of trying to develop a system without breaking the bank but WA took care of that daydream.
Crypto currency is very interesting and I wish you success in your endeaver.
Marty
The site looks good and interesting enough to attract attention, but if there are lower starting investments, you can put that as well to attract those who are risk averse. I have not read the words of the site obviously for time, and lack of interest now. Best wishes always.
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I just started investing in cryptocurrency and am making more money than I ever did before in my life, so I feel you on the subject. I am still very new to this world but became very enthousiastic so really like it to see another person enthousiastic while being involved in this. It really is the next big thing :)