The Next Level of Professional Gambling

The Next Level of Professional Gambling

Developing a broader understanding of Cryptocurrency

By Alan Yip

If you have used social media recently or watched the 2018 Super Bowl Half Time commercial, then you have probably heard of Bitcoin. With a click of a button, you can invest in your future with next level currency in a growing world.

Get Rich or Die Trying

The famous rapper named Curtis James Jackson III famously known as “50 Cent” recently made 8 million in bitcoin by accepting bitcoin for his album release “Animal Ambition.” Bitcoin was valued at $662 at the time of his album release but has soared up to $17,000 making Jackson’s coins worth millions (Liao 2018). This is just one of the many stories of people who got rich over this new investment currency.

Over the past year in 2017 bitcoin’s price went from $900 at the beginning of the year to $20,000 at the end. Cryptocurrency is a new medium of exchange known as Peer to Peer (P2P) digital currency. It is the new money of the world. Many people are jumping off their seats for not forecasting and investing before the explosion. But, it’s astonishing to hear stories about people becoming rich from making smart investments off it. This article will dive into an overview of how Cryptocurrency works.

The main points to understanding how cryptocurrency functions include:

Ø  Background and principles

Ø  Blockchain                      

Ø  Initial Coin Offering

Ø  Exchanges

Ø  Types of Coins

Ø  Future Forecast  

Where It All Began  

The idea for creating digital currency started with Satoshi Nakamoto (Rosic 2017). He wanted to create a peer to peer (P2P) electronic cash system. Cryptocurrency is best defined as limited entries in a database. Miners are people who have the authority to release new coins and clear transactions when made. If a consumer wants to buy a portion of the coin, then the coin is idle until the miners finalized the sale and it is added onto the blockchain.

Some properties of cryptocurrency include:

Ø  Irreversible – a transaction cannot be reversed

Ø  Pseudonymous – neither transactions or accounts are connected to real-world identities

Ø  Fast and global – transactions occur instantly throughout the world

Ø  Constant opening period – the crypto market never closes so it continually fluctuates

Ø  Secure – All of your funds are lock in a cryptography system

Ø  Open free market – anyone can use and purchase crypto with no barriers to entry

Ø  Controlled supply – the supply of coin is limited

Ø  No debt to bearer – coins are as hard as gold.

Blockchain

Think of blockchain as a large spreadsheet called a ledger that exists publicly. It is a distributed database. Blockchain gives cryptocurrency it’s “digital value” in the market. When data or a transaction is made to the public and it is finalized into the system. It gets put into a blockchain that is added to the whole database of the coin market.

Some takeaways from blockchain are:

Ø  It cannot be controlled by any single entity

Ø  It has no single point of failure

Ø  It has transparency where data is embedded within the network as a whole

Ø  It cannot be corrupted without using a huge amount of power to override the system

From Pictures to ICO

Kodak is a famous photography company who recently announced that they would launch a new Initial Coin Offering (ICO). Kodakcoin’s mission is to help photographers protect their creative endeavors (Kodak 2018). Kodak has not released their coin into the market yet, but this is the first attempt for a publicly traded company to develop ICOs. Let’s transition into what exactly is an ICO.

An ICO is used by startups to bypass the rigorous and regulated capital raising process required by venture capitalists or banks. It is like an Initial Public Offering (IPO) for a company but instead of offering shares, it offers coins into the market. When a new coin or cryptocurrency firm wants to raise money through an ICO, it creates a new plan for its new project or venture. It states how much money is needed to undertake the venture, what type of money is accepted, and how long it plans to finish the project. If the money raised does not meet the minimum funds or objective of the firm’s goals, then the money is returned to the investors and the ICO is identified as unsuccessful (Digg 2017).

The Great Exchange

Cryptocurrency exchanges are websites that allow you to buy, sell, or trade other cryptocurrencies and purchase new cryptocurrency with traditional currency like cash. Coinbase is known as one of the largest coin exchanging markets. However, it is limited to the types of coins it carries. Bitcoin, Ethereum, and Litecoin are the three P2P coins that Coinbase acquires. The disadvantage to these exchanges is that there are multiple exchanges meaning that one exchange may not have a certain coin that you want to obtain and some exchanges may not accept cash as a currency. The process of transferring coins comes into play here.

Consumers are allowed to purchase one portion of a coin in one exchange and can transfer it to another one to trade for a different coin. This might be tedious, giving people a disadvantage compared to purchasing a share of stock. Buying a share of stock is easier since there only a set number stock exchanges that carry the majority of stocks in their markets, while there are numerous crypto exchanges in the market.

There are three types of exchanges:

Ø  Trading platforms

Ø  Direct trading

Ø  Brokers

    

The Collection

As I stated early in ICOs, each coin has a specific purpose or mission statement. You are essentially buying into their project or startup idea when you invest in a coin. One unfamiliar cryptocurrency that people may not be aware of is TRON. The goal of TRON coin is to construct a global free entertainment system, utilizing blockchain technology (Tron 2017). They want to decentralize and create a content-free digital entertainment system. This is just one of the many examples of various coins.

Another surprising coin that was recently released is TrumpCoin. The goal of this coin is to support President Trump and his powerful vision to Make America Great Again (Trump 2017). By purchasing TrumpCoin you are supporting the movement in creating a bright, secure, and prosperous future for all Americans. As crazy as it may seem, this is an actual cryptocurrency priced at $0.11 in the market. This provides a wide spectrum of the types of coins being created in the market. With no restrictions and barriers to entry, anyone could create their own coin.

 

 

Future Forecast

Cryptocurrency exploded over the past year. However, the future of crypto is yet to be determined. The Bitcoin market hit an all-time low of $6,888.45 this week (Higgins 2018). This is an extremely volatile market meaning that one day the market could dramatically rise and fall within the next day or week. High and inconsistent volatility is preventing financial institutions from investing in it. This brings in many of questions into whether crypto will survive within the years to come. This market is also unregulated meaning that there is even more risk to invest because there is no fallback or safety net to get your money back if you invest. There is not a Security Exchange Commission (SEC) to regulate or control the market. Cryptocurrency is a raw market with huge potential for success.

Works Cited

“About Trumpcoin” Trumpcoin. https://www.trumpcoin.com/ (4 February 2018).

Buntinx, JP. “Coinbase Logo.” The Merkle. https://themerkle.com/wp-content/uploads/2017/01/coinbase-logo.png (4 February 2018).

Higgins, Stan. “Bitcoin's Price Dips Below $7K As Crypto Selloff Continues.” Coindesk. https://www.coindesk.com/bitcoins-price-dips-below-7k-as-crypto-selloff-continues/ (4 February 2018)

Higgins, Stan. “From $900 to $20,000: Bitcoin’s Historic 2017 Price Run Revisited.” Coindesk. https://www.coindesk.com/900-20000-bitcoins-historic-2017-price-run-revisited/ (4 February 2018).

“Initial Coin Offering (ICO).” Investopedia. https://www.investopedia.com/terms/i/initial-coin-offering-ico.asp (4 February 2018).

“KODAKOne platform & KODAKCoin cryptocurrency.” Kodak. https://www.kodak.com/kodakone/default.htm (4 February 2018).

Liao, Shannon. “50 Cent accidentally made $8 million in bitcoin.” The Verge. https://www.theverge.com/2018/1/24/16930010/50-cent-rich-bitcoin-twitter-instagram-humblebrag (4 February 2018).

“Make Web Decentralized Again.” Tron. https://tron.network/enindex.html (4 February 2018).

“Robinhood Logo.” Use the Bitcoin. https://usethebitcoin.com/wp-content/uploads/2018/01/rbin.jpg (4 February 2018).

Rosic, Ameer. “What is Blockchain Technology? A Step-by-Step Guide For Beginners.” Blockgeeks. https://blockgeeks.com/guides/what-is-blockchain-technology/ (4 February 2018).

“Tron Logo.” Cointame. https://www.cointame.com/wp-content/uploads/2018/01/Tron-coin.jpg (4 February 2018).

“Trumpcoin Logo.” Coin of View. http://coinofview.com/images/splash/jpg/trump_splash.jpg (4 February 2018).

“What You Should Know About Bitcoin's Ridiculous Surge In Value.” Digg. http://digg.com/2017/bitcoin-value-what-the-heck (4 February 2018).