The Basic Babe’s Guide To Bitcoin

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Whether you believe it is a bubble or not, tried investing yourself, or are just tired of hearing the word BITCOIN, there is no doubt that the world of Cryptocurrency is here to stay.  We can’t promise to turn you into a crypto-connoisseur, but we can make sure that the next time you’re out to drinks with friends and the topic comes up in conversation, you’ll have a better idea of what the hell everyone is talking about.  Of course, there is still much confusion as to what to do with all your bitcoins once you’ve purchased them… but that’s a topic for another day.

The Basic Babe’s Guide to Bitcoin:

What the heck is bitcoin anyway?

Bitcoin in a form of Cryptocurrency.  But don’t get it twisted, not all cryptocurrency is Bitcoins.  Many argue that the opportunity to make money investing in Bitcoin has long been over, but don’t give up just yet.  Countless smaller, less known cryptocurrencies such as Ripple, Litecoin or Etherium are still picking up momentum.

Okay, so what is Cryptocurrency?

We’re Glad you asked! Cryptocurrency is a form of currency that exists strictly online.  The beauty of this is that it exists in a decentralized system away from government and social influences.  No more sexual predators affecting the markets and more importantly your money.  The down side, because there always is one, is that Cryptocurrency is used heavily on the black market, aka. the dark web.

So if a government isn’t monitoring it than who is?

A group of individuals referred to as “miners” process all the transactions. Miners use high powered computers to solve crazy complicated math puzzles.  Solving these puzzles complete the transactions and unlocks a specific amount of bitcoin for that miner. The Miners verify these transactions through the block chain; a global shared ledger where each transactions is added like a building block, or link in a chain.  The block chain can never be altered, which makes transactions final, and virtually incorruptible.

Are there infinite amounts of Bitcoin?

Simply put, no, Bitcoins are not infinite.  Experts say that only 21 million Bitcoins can be mined and that should take us to the year 2140.  Currently we are sitting around 17 million mined Bitcoins.

What is this Bubble they speak of?

To understand why many experts think this is a bubble, one must first understand the evolution of Bitcoin.  Let’s say for simplicity sake you invested a $100 into Bitcoin back in 2010, you would have purchased it at an affordable rate of around 30 cents/Bitcoin or 333.33 Bitcoins.  As of June 2011, Bitcoin hit a high of $31.91, turning your initial $100 investment into just over $10,500 (or as we like think of it, three and a half Kardashian-favourite Celine handbags).  If you chose not to cash out and instead kept your money invested, by the end of the year your $10,500 would have dropped to $1500.  Welcome to the highly volatile world of cryptocurrency.  A bubble is a term used to describe a time when an asset’s trading value or the popular demand of an asset exceeds it’s actual worth, as we are seeing with Bitcoin.

We’re far from experts here at Alpha Beta Pie, so in no way are we telling you how to invest your money.  What we can tell you is that we regret not investing that measly $100 back in 2010.  Sadly, our heads were too busy trying to process Kanye’s “Taylor, Imma let you finish” speech at the Grammys.

Ginevra Fenton

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