Magical Internet Money – Cryptocurrency

Cryptocurrency

Magical Internet Money (a.k.a. Cryptocurrency or crypto) has been gaining more and more attention lately so I thought maybe I should share some of my experiences and also how to make your own magic internet money! You might be saying “why write about it now, why at all”. Well, I’ve thought the same thing several times, mainly because I always figure that I’m late to the party and all my friends already know about the topic. Quite the opposite is true though, the more I share with friends the more I realize that some blog posts and videos are probably needed.

So my thought is to break this up into several posts because honestly if I were to try and share everything I’ve learned in one post or video you would probably feel like Neo from the Matrix. (I’m not trying to say I know that much about the topic, just saying that there is a lot of information and some of it is really confusing). So let’s get started.

Comparing crypto to something you understand

We’re going to use a farmer analogy mainly because I grew up on a farm, and it’s easy for me to understand this way. You could use oil, or any other traded good really… you just need something that has producers, traders, and buyers.

Agricultural Grain Production

OK so here is my oversimplified grain production overview.

Step 1 – A farmer grows a crop of wheat, and harvests it.

Step 2 – The Farmer either sells his wheat or stores it for sale at a later date.

Step 3 – People who want wheat buy it when available

Step 4 – Owners of wheat can either use it or store it for sale at a later date.

Applying this to Cryptocurrency

In the cryptocurrency world, there are really two roles that a person can assume.

Producers – which are called miners, these people have an investment in hardware and product new coins with that hardware

Buyers/Traders – people who want cryptocurrency but don’t want to invest in hardware.

There are also other concepts that are much like an agricultural market that you will come across.

Wallets – These are the “grain bins” of the crypto world. These allow you to store something of value if you are not ready to sell or use the commodity. Farmers store grain in theirs, crypto miners store coins in theirs.

Exchanges – this is a website that offers Producers and Buyers/Traders a place to conduct business (ie trade coins for other coins or fiat currency)

Mining Pool – imagine if you were trying to farm thousands of acres. You would need a lot of equipment, a single farmer may not have the money to invest in that much equipment. So in order to get the job done, several farms may group together to pool their equipment and get the job done. In mining, miners will all work together in hopes of getting more coins faster because of their combined equipment’s power.

So you hear there is more than one type of cryptocurrency?

Well, you heard right!

Much like the markets offering tangible assets, crypto is no different. For example, you can trade corn, soybeans, wheat, cotton, tobacco, oil, gold, silver, etc etc etc….

When it comes to cryptocurrency you have the well-known coins, that people on the news talk about… like Bitcoin, Ethereum, and Litecoin. But that is just scratching the surface, most people refer to everything but bitcoin as an “altcoin”, and there are 100’s if not thousands of them.

The best advise I can give you is to do your research, because there are some really good ones to mine or invest in while others are completely worthless.

When doing your research here are the bare minimums to look for:

  • Is the coin listed on an exchange
  • Does it have liquidity (meaning are people actively buying and selling it)
  • does it have a future? (ie is it being actively developed, does it have a social media following, and does it solve a problem that a more well-known coin does not address)

If it meets all three of those you should be ok. (Again this is not investment advise… just trying to give you something to look for)

So how do you get started with cryptocurrency

The first thing you have to ask your self is, am I a miner or a buyer?

For the miners

This path can be as complex or as simple as you want it to be. However, it will require a separate article which I have not written yet. So until I do that, check out YouTube there are a bunch of good channels for learning how to mine. BitsBeTrippin is a great place to start.

What you will find though is that you need a video card, aka GPU. GPU’s are great at solving problems and are much faster than a normal computer CPU. However, there are some coins that are candidates for CPU mining such as ZCoin and Monero. Anyhow, to point you in the direction you need to go here are my tips (until I get a full article).

If you have an NVidia GPU follow this:

  • Select a coin – I recommend Equihash based coins like Zcash, ZClassic, Bitcoin Gold, or Hush
  • Get a wallet for that coin so you get a wallet address
  • Get a mining program – I used ewbf miner, version 0.3.4b (google it its pretty easy to download)
  • select a pool – this will depend on what coin you select, most coin websites will point you to a compatible pool
  • configure ewbf miner with the proper settings for your pool (the pool website will tell you how to do this)

If you have an AMD GPU follow this:

  • Select a coin – I recommend ethhash based coins like ethereum
  • Get a wallet for that coin so you get a wallet address
  • Get a mining program – I used claymore miner, version 12.6 (google it its pretty easy to download)
  • select a pool – this will depend on what coin you select, most coin websites will point you to a compatible pool
  • configure claymore miner with the proper settings for your pool (the pool website will tell you how to do this)

For the buyers

Your path can be started much quicker. Your first task is to get a wallet for the coin you want to invest in, and then exchange fiat currency into crypto via an exchange. There are many exchanges, I’ll talk more about them in a follow-up article, so until then do some Google searches and you will find some to get you started… the most well known is CoinBase. (Some people love … some people hate Coinbase… my experience has been mostly positive) If you decide to sign up for CoinBase, consider using my referral link, and after you do $100 dollars in trades we both get $10 bucks!

Take away

So for now, do your research and stay tuned for some follow-up articles where I will explain my mining operation and what I’ve learned so far.

 

 

 

 

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