Cryptocurrency for Beginners – Everything you Wanted to Know About Bitcoin and Other Cryptos


How’s it going guys. It’s Austin with the Crypto Playhouse here. Today we’re gonna to give you a little crash
course in cryptos for those of you that are new to this game. And of course, any crash course in cryptos
is gotta start with the lore: Satoshi Nakamoto and the hidden face that nobody really knows. Alright, so just a little bit on the lore. Satoshi Nakamoto, he is the first guy who
put Bitcoin out there, but it could be a pseudonym. Nobody really knows who is is. Just about all we know is he’s a guy that
supposedly has lived in Japan. He announced Bitcoin and he launched it, but
he did it from boards, from encrypted IP addresses and in all reality, nobody really knows who
he is. The one person that many have actually known,
Hal Finney, was the first person to receive a Bitcoin transaction and probably the closest
person that ever came to Nakamoto, but back in 2014 he died! So anyways, what are cryptos? What makes them exciting? What sets them apart from regular cash currencies,
what we in the crypto world refer to as fiat? Basically, the whole idea behind cryptos was
creating a decentralized currency that really relies on a peer-to-peer relationship that
cannot be falsified. And how do you do that? Well, really it all boils down to encryption
and something that we call �hashing.� And all hashing is the process of doing encryption
on a computer and we just refer to it as hashing. So basically, it’s based on a thing called
�proof of work,� and what that is is a set of encryption algorithms that a computer
runs through that they’re relatively timely and power consuming, but it’s basically, instead
of having the gold standard where you have gold to back it, cryptos are backed by a data
standard. We crack those algorithms, we find the block
and that encryption stands as what you would have for gold for a currency. You’ve got the encryption solution for a crypto. So that encryption and those hashes that we
do to basically run through those algorithms, when you hear people refer to �crypto mining,�
we’re not mining anything. Quite obviously. All mining is is using a large number of computers
running off of, originally, CPUs, that’s what all the original mining was. Now things have moved on to GPUs or graphical
processing units or ASIC units, which are, essentially, mini computers that are just
completely tailored for nothing but the purpose of an encryption and a hashing algorithms. So when you hear somebody say mining, really
you can thing, alright, they’re just taking these transactions. They’re running the encryption and that’s
what mining really is. It’s just a continual process of processing
these transactions through encryption and that’s what we based the whole crypto model
off of. That’s how this is done from the get-go. Alright, so some of you might have seen this,
little bit of a fossil here. We got a checkbook with us today! Kind of ironic for us in the crypto world
because this is a thing of the past if I’ve ever seen it beyond the crypto world, but
especially for us. But, I’ve realized this is really one of the
easiest ways to explain to people exactly why cryptos are so exciting and what makes,
I wouldn’t see infallible, but just so much more secure than fiat transactions. So, some of you Millennials out there, might
not have even used one of these things in your life, but basically if you write a check
for somebody, you’re gonna go and open it up, you’re gonna write your check and you’ve
got your carbon copy here that you keep. The person that’s receiving the check has
the original check and your bank gets a copy of the transaction when they cash it and there
bank gets a copy of it as well. So the whole concept behind cryptos and the
way that we achieve this decentralization goal is it’s really a peer-to-peer network. All of the information for any crypto that
is out there is hosted on what are called nodes, which are basically just ledgers, just
like you have in the back of your checkbook, a list of all the transactions. But the key difference between fiat transactions
and crypto transactions is that the ledger on a fiat transaction is between you and the
recipient and you’re banks. As for a crypto transaction, the entire ledger
of every single transaction that has ever occurred in the history of a given crypto
is held on every single node out there and for something like Bitcoin, you’re talking
about hundreds and hundreds of thousands of nodes. So, if somebody goes and they want to say,
�Oh, you didn’t send me that Bitcoin,� it’s real simple. You can go to your node and you can look up
that transaction ID and you can say, �Well, yes I did.� In the world of fiat, that might
be a little bit shaky because they say, �Well, you falsified the ledger,� but with cryptos,
there’s about half a million other nodes out there that they can go and say, �Well, I
can check it on this one here in the US. I can check it off a node in China. You can check it off any node and every single
person that’s using Bitcoin has access to that constant blockchain and every node out
there in the world can confirm whether or not that transaction was made or not. So anyways, with this whole idea of Bitcoin,
Bitcoin was the first, but ever since then, we’ve seen new altcoins popping up, at this
point it almost seems like every week there’s a new one I’ve never heard of that offers
some kind of new feature worked into its embedded code and these are all based off new encryption
algorithms. We had SHA-256. Now we have Blake-256, Equihash, Lyra2, all
these new algorithms and they’re really paving the way for new altcoins, and as these new
altcoins start popping up more and more often and people’s confidence in certain ones are
obviously based off the features in it, like Ethereum for example has something called
Smart Tracks, Smart Contracts where the transactions of this currency can actually be held in the
cloud if you will, until both parties complete something that confirms they are both ready
to commit the transaction and boom! Then it completes, rather than doing an instant
transfer. Now, with this, there’s a big price flux in
all of the new altcoins that are coming out and people start to realize, Hey, there’s
so many of these things and there’s such a price flux, depending on the community support,
that while they are a completely new thing, this new decentralized idea, they trade very
similar to stocks and Forex. So one of the big things that’s really been
exciting recently is these new cryptocurrency exchanges that are popping up and for a long
time mining was kind of the quick profit method if you were using cryptocurrencies. You hook up your miner, you make some money
and it’s basically set it and forget it. But now with people have started trading,
they’ve realized there is some great money to be had there and people like me that were
miners originally, for us it’s even more exciting because back in the day if you were trading
stocks, obviously you’re putting your own money into and you’re putting it at risk,
but at this point, personally I love the fact that I can go, I can hook up my GPU miner. I can mine some currencies and I just send
it right over my trading account and I can double, triple my profit in as little as 24
hours if I make some smart trades. So I think nowadays, people are starting to
see that mining was the beginning, trading is kind of what’s coming about, and when you
got different groups that are excited about each of them, but really the people that are
truly benefiting from this are the ones that are kind of splitting over and doing both
of them and it’s a whole new world being able to pad a trading account with something that
you essentially set and forget. Once you pay off your units, it’s nothing
but a free trading account essentially. So as time goes on, it’s gonna be really exciting
to see how the trading market evolves. How all of the new technology is going to
improve mining, the hashing algorithms will be changing. It’s an exciting time for cryptos and there’s
gonna be a lot happening in the next six months to a year. And we wanna know from you guys. What are you excited about in cryptos? What do you wanna see come from cryptos? It’s there a new feature you’d like to see
working to the back-end code of something? Let us know in the comments and also let us
know what you’d like to see from us. If there’s something you’d like to get to
know a little bit better about the crypto world, something you’re confused about. Let us know down there and you know, if you
enjoyed this, give the video a like and subscribe to the channel and we’ll hear from you next
time.

13 thoughts on “Cryptocurrency for Beginners – Everything you Wanted to Know About Bitcoin and Other Cryptos”

  1. Would love a better look at the exchanges, Bittrex, Gdax etc etc. How they function, Pros and cons to each other, Is there any risk? Thanks!

  2. Thanks Austin!!! I lost one Litecoin in hexa Bot this week I was going to get my first mining payout from nicehash and then that went down I'm having a rough start but I'm excited to get into this stuff

  3. Hey Austin loved the vid, just tossed a sub. Do you have any recommendations for GPU mining rigs? Any good affordable ones out their?

  4. I am confused, how to trade cryptos for the very beginners… and how to check the nodes you told about in the video……???!!

    Please help! i really wanna learn!

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