Bitcoin and Ethereum Beginners Guide

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How’s it going everybody doesn’t beat the bush today i’m going to talk about crypto currencies such as bitcoin and etherium a little background about it how you can invest in it and the risks involved now i’m a beginner myself and i did my research just enough so that i would be comfortable investing in it i know you can get a lot deeper into in terms of the

Implementation the types of crypto currencies the way it works and actually how actually mined things this is all kind of transparent you don’t necessarily need to know every single detail in order to invest in it wisely but it is important to know a little bit of the background so crypto currencies is kind of like this you have a whole bunch of computers on a

Network on the internet they all have a thing called lectures which keeps track of all the transactions now cryptocurrency is a decentralized network which means every single node every single computer has a copy of this ledger of every single transaction there is now every single node can actually have a concave version of this ledger currently this ledger which

Holds all the transactions that ever been completed since the beginning is roughly ten the 30 gigabytes and it’s actually growing the whole decentralized network constantly checked itself for error so if an attacker comes in and tries to modify one single computer and tries to feed this to other computers other computers are going to complain about it and not going

To allow this fake transaction to go through the thing i like about crypto currencies is that the number of coins is actually fixed from the very beginning now not all of them may be discovered yet because they have to go through this mining process this is in contrast to u.s. dollars where the central bank can actually just print any amount of money bail whatever

Company out all of the supply of the united states dollar would inflate and the value of our dollar would gradually go down this is very different in the crypto currency because the number of issued coin stays the same much like gold where the amount of gold stays the same and therefore there’s a rarity to it and due to this rarity the value of gold is kept and

I expect the value of a digital currency to be kept as well you can see as the us dollar goes down and down the value of the digital currency would go up as compared to a united states dollar now what’s the difference between bitcoin and aetherium bitcoin is just a digital currency itself however aetherium you can attack on all these other different services on

To the blockchain and essentially do fancy things with it and that’s why people like to use as a area more than bitcoin for example you can set up the etherium to do something like a kickstarter where people can actually pay into it and it would not actually be duck from their account until certain criterias are met usually these bells and whistles a theorem has


Been a bit more popularity and currently it’s a second most popular digital currency after bitcoin theorem has a shorter block time of 12 seconds whereas bitcoin has a block time of around 10 minutes this really just means that whenever you do a transaction for example you want to buy more etherium that transaction would go through faster this is because bitcoin

By itself it’s architected in such a way that they can only do so many transactions per second need to propagate through the whole system and this takes ten minutes to do just because of this bottleneck and because the original creator is nowhere to be found there’s a lot of different groups that are trying to change the way bitcoin works and they can never agree

To something because of this is kind of going to be like an hd dvd versus a blu-ray battle the digital currency that’s going to win is the one that’s easier to use now i see bitcoin it’s kind of slowing down although it is the most popular right now due to this blockage of all the different ideas of how bitcoin should be changed so therefore they’re going to be

In a gridlock and nothing will happen and therefore it’s just going to slow down in terms of usability compared to the etherium now you wonder how the heck do you buy into this because sometimes you have to run a server or something this gets really complicated personally i just go to one of the largest exchanges coinbase comm if you’re interested in supporting

This channel you can check on my coin base referral link down in the video description below or if you buy more than $100 worth of bitcoin you get another ten dollars of bitcoin and you can help out this channel by giving me another ten dollars a bitcoin this is the actual servers diet use and in doing research for this video i actually bought one aetherium this is

At the cost of two hundred fifty five dollars and i’ve gained about 26% since maybe a month ago that i bought this coin you have to understand that digital currency is highly highly speculative it’s kind of like currency traded you never know where it’s going to go based on policy or whatnot for example the etherium got hacked a while back someone sixty million

Dollars from the server however the creator said no you can’t take 60 million dollars so then they kind of went back on the ledger and just kind of forked it and they call the new one etherium and the old one is called the etherium classic the classic one started off about two dollars now swears about twenty dollars normal aetherium is about three hundred twenty

Dollars as of today now i like it here and better because i like the idea that thieves wasn’t able to get away with the 60 million dollars however the theme classic people just think oh yeah you know this programming is immutable you should not be able to change it no matter how what happens now that’s two ways of thinking about it kind of side on the etherium side


Rather than the classic side so i bought more a theorem instead now i want to give a case on why i should buy things that holds their value a lot better such as crypto currencies or gold however cryptocurrency is a super duper volatile just one day it can go like 10% and i just bought a cerium i bought at 255 min and went up all the way to like 350 that’s like a

Hundred dollar game how many percent gain is that it’s like 33% and then it just dropped back down thirty dollars this is another 10% down so you can expect it’s going to go up 30% down 10% one day up with other 20% you know it’s just going to move all over the place and you just have to expect this however if you think about long term let’s say ten to twenty years

The us currency in year 2000 let’s say you have one dollar then you know how much it’s worth today it’s about 71 cents to that dollar now if you held $1 worth of gold it’s going to be worth a lot more than one dollar now since year 2000 there’s about an inflation of about two percent now over 17 years this equates to about a 40 percent of inflation so the average

Price of things if it was one dollar back then today it’s going to cost you one dollar and 40 cents now you just can’t look at inflation and just go all my currencies is going down in value but at the same time your wages has been going up as well so what you really want to look at it’s not at the actual value of this dollar but rather how much you can buy per your

Income every single year back in 2004 to average expenses as a ratio of income is about 55 percent now this includes housing transportation medical costs food etc now fast-forward 10 years in 2014 people actually have this 74% to buy the same exact stuff this is a 19% increase of cost relative to your income so yes your income may be increasing but the costs are

Increasing a lot faster all this boils down to that your buying power is actually being reduced in light of all this you may have a chunk of investable assets and you put it in an investment account and it’s growing at 6 to 8% every single year now yet this beats inflation however if you keep any of this in cash such as in a savings account which earns you only 1%

The inflation of 2% along with wage is outpacing your expenses it’s going to create an effect where your money is kind of shrinking by you know about 1% every single year and over a long time this is a lot for me when i looked at digital currencies is highly speculative so i wouldn’t want to put all my investment money inside a digital currency of course couple

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Years ago a friend told me about a guy who invested in bitcoin really really early on and he invested in just about a thousand dollars and it grew 1,000% so guess what $1000 turned into a million dollars so he put in in something highly highly speculative and he got a really good gain from it you can imagine for anything that’s so highly speculative you may gain

1,000 fold or you may actually lose it all if maybe bitcoin just folded one thing’s for sure i think buying digital currency is actually a lot better than lottery tickets or going gambling with the same amount of money when you gamble at a casino the long-term gains is actually very very negative the more you play the more you’re going to lose so in light of all

This my comfortable range of investing in something like this maybe about five to ten percent of your portfolio now your portfolio is the amount that is over and beyond what you save your emergency fund so if you have an emergency fund and anything over this this is what you should use to invest out of this five to ten percent i would stick about 25 percent in

Bitcoins and 75% in aetherium there’s other digital currency alternatives such as aetherium classic which i don’t really like that one so i’m not going to invest in that one there’s like coin as well if you look in coin base is going to show you a thing where you can buy like coin as well for a light point i don’t like that one that much myself because it’s just a

Kind of copycat of the point theorem is completely different than those other two because of the added features i had the ability to do all these fancy transactions that’s why i prefer to waited more seventy-five percent on a theorem and 25 percent on bitcoin just in case you know you don’t know which one’s going to win so you know just put a little bit in each

Overall investing wise i think this is kind of like a moonshot and you really got to be prepared of losing all your capital or maybe having it stolen if one of these crypto currencies do pan out you’re going to see really really good game so it might be good to get in early by a little bit into it and just hold it long-term and you might see you’re a bitcoin or

A theory and worth a lot more later on like i said if you’re interested in supporting my channel you can check out my point base referral link down below where you buy $100 worth of bitcoins you can get another $10 free added on top of that and i would also get another $10 there’s other ways to support my channel so just audible link down in the video description

Below where you can get a free audio book there’s a patreon link over here and don’t forget to subscribe thanks for watching

Transcribed from video
Bitcoin and Ethereum Beginners Guide By BeatTheBush

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