What Is Cryptocurrency? A Breakdown Of Bitcoin & Blockchain Basics
Some claim that blockchain is unbreakable, while others see it as the next in a line of unbreakable systems to get broken. So far, more than $4 billion worth of Bitcoin have been stolen in today’s market values with no clear explanation. That should make investors a little uneasy.
Blockchain is a peer to peer (P2P) system similar to – but much more complicated than – the one used by Napster to share files back in 1999. The tendency of users to trade copyrighted files of music, movies and computer programs is what eventually put Napster out of business, but not before a few people made millions and millions of dollars and the music, movie and software companies lost even more.
Imagine a virtual world where you do all your banking. In this world, they use Bitcoins instead of dollars. You can mine for Bitcoins, or you can buy them at the market’s current rate connected to supply and demand and by using real world dollars.
Your virtual world is fun to play in, but the makers of cryptocurrencies have figured out a way to turn your Bitcoins into real money in the real world. Until you do that, you will just have your VR money and be virtually rich, but not really rich.
It’s like playing with chips in Las Vegas. You may be $50,000 up but until you leave the table and cash those chips in, you haven’t won anything. And as long as you stay at the table, you could lose everything. Casinos count on that. If you do get into Bitcoin and it rises, don’t be greedy. Cash in before it all slips away.