This is the fifth installment in an ongoing series breaking down innovations in Web3 for creators and why it matters to writers, course creators, coaches, consultants, and anyone looking to create value on the internet.
Today, I'd like to discuss a topic that you often comes up in association with Bitcoin, Web3, or the blockchain: Cryptocurrency.
My goal is that hopefully once you've read this article, you'll have a high-level grasp of the historical background of Cryptocurrency, and how it came to be (enough to sound reasonably intelligent to your peers). You'll be able to start thinking creatively about how cryptocurrency factors in to the future of online business, and building community.
So without further adieu ...
Cryptocurrencies are digital assets that use cryptography to secure transactions and verify ownership. They’re also known as virtual currencies because they don’t exist in tangible forms such as coins or paper bills.
Cryptocurrencies are created through a complex algorithm called mining, which involves solving complicated mathematical problems. Once solved, these blocks of data are added to a public ledger called the blockchain. This makes them tamperproof and virtually impossible to counterfeit.
The first cryptocurrency, Bitcoin, was invented by Satoshi Nakamoto in 2008. It was released as open source software and has since become one of the most popular cryptocurrencies in existence. The original Bitcoin protocol was designed to limit the total number of Bitcoins that could ever be mined. As of January 2022, there were more than 18.9 million Bitcoins in circulation.
There's no doubt that investing in cryptocurrency can be volatile, and some have likened it to being on a rollercoaster if you are thinking about your investments with a short-term outlook.
That said, if you invest wisely, there are a few valid reasons why you might want to have some cryptocurrency in your wallet. Here are a few reasons why you might consider investing in cryptocurrency:
Crypto is a good investment long-term:
In the last ten years, Bitcoin has outperformed all asset classes, including the US Nasdaq 100, large and small cap stocks, and REITS. I found this chart by Charlie Bilello helpful:
Ethereum has been growing even faster in the past five years, and while this is speculative on my part, I believe that once the 2.0 infrastructure is complete, we'll see even bigger growth in value, as it becomes easier to transact on the network without high gas fees.
I'm not an economist, but smart people tell me that Cryptocurrency is a hedge against the traditional financial system, and inflation. In 2021, the US inflation rate was roughly 7%. Because Bitcoin for example, will only ever have 21 million coins, there's some protection here, whereas a government can print more currency at any time.
Cryptocurrency in many cases has far more utility than fiat money. While it's true it can be an investment vehicle, more and more its something that is required to transact on specific technology platforms, and purchase goods and services within the growing Web3 creator economy.
The best place to buy cryptocurrency is through an exchange. For most people just getting started, Coinbase is going to be the most widely accessible and trusted option you'll want to consider.
It’s one of the largest exchanges in the world with over $1 billion worth of transactions taking place every day.
You can use Coinbase to send and receive payments online using their app or website, or via SMS. They also offer a mobile trading platform so you can trade directly on the go.
You can fund your account using bank transfer, debit card or credit card. The minimum deposit amount is $100. Sign up here.
Other Exchanges for buying crypto:
Check out these additional links:
I highly recommend joining The Invisible College. The Invisible College is a learning DAO that gives you the skills, network, and opportunities to make an impact.
The Invisible College is a school owned by the students where you can learn, build, and create in this exciting new world of Web3.
Joining this organization has been the best decision I've made this year so far for my growth and learning, and I'm excited to see how the organization evolves.
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