I almost hesitate to publish the name out of sheer exhaustion at its ubiquity-but, deep breath, here it goes: cryptocurrency. Are you as tired of hearing about this as I was just a few weeks ago, when explanations of it usually centered around Bitcoin-along with breathless narratives of the life-changing, bank-account-invigorating wonderments, sprouted everywhere turned in my news reading, my Twitter-feed scrolls, and my newspaper lifestyle trend pieces? When certainly one of my close friends started ranting and raving concerning the entire “blockchain revolution” and his awesome recent decision to toss some funds into Digital Cash (which had, yes, gone from $900-something at the beginning of a year ago to around $20,000 toward the conclusion of the year, as of this writing, it hovers around $11,000), I vented my rage in the entire puffed-up concept by demanding he explain to me what sort of hectic nonsense this whole scheme amounted to.
You know what? It’s not really that complicated. But yes, right about now seems an apt time to have an all-important notice to my dear readers: You’re about to read financial advice from somebody that until a week or two ago had, inside the entirety of his life-besides some fairly rote 401(k) behavior-invested in the stock market exactly once. Once I was 13, a business-savvy family friend mentioned something about Chrysler staking their main point here on the new type of car; if it worked, he said, the company’s stock might skyrocket; when it failed, obviously, the company was finished. Somehow, I was able to buy a handful of shares in the stock at around $3-which I then sold at about the time the stock peaked several months later somewhere around $16 or $18, netting myself a handy hundred bucks or so together with the straight to pat myself on my own greenhorn greed-is-good back. But having once ridden the white lightning with such blistering success, I was thinking, Why not quit while I was ahead?
Understanding crypto, though, is straightforward-with a bit of help from Samuel Taylor Coleridge’s perpetually useful willing suspension of disbelief. You don’t must browse the myriad stories and posts and think pieces about how to understand crypto, or Bitcoin, or perhaps the coming transformation of our entire method of doing everything: They’re generally overly complicated and, perhaps more importantly, simply not that much fun. May I let you know exactly how blockchain technology-the DNA of crypto, if you will-works? Absolutely not. I can tell you that it works something similar to this: Bitcoin as well as other cryptocurrencies basically record every transaction and distribute the records of those transactions equally to any or all parties involved. Every now and again a “block” of those transactions is verified and essentially sealed up and stacked along with the last block, making a chain.
Within the cryptocurrency world, these “transactions” are users buying and selling different cryptocurrencies, usually as virtual “coins.” (A number of the more well known ones: Bitcoin, Ethereum, Ripple, Litecoin.) Whenever people speak about the “blockchain revolution,” they’re generally noting the blockchain can be used as secure transactions of virtually any type: storing and moving birth certificates, votes, insurance claims, whatever. The revolution I’m focused on most presently, though, is definitely the one about to take place inside my bank account.
Here’s where the skeptics are available in: “But these ‘currencies’ are derived from nothing!” they wail, gnashing their teeth and furrowing their brow. That I summon all of the high-minded derision this one-time philosophy major (I jettisoned that idea faster than my Chrysler stock) can summon in responding: “Since Nixon took us from the gold standard in 1971, our entire monetary product is based solely on shared assumptions, man.” The dollar bill is, at root, a piece of paper which has value only because it relies on the “full faith and credit” of the usa. Well, crypto is the same as that, with one exception: It relies on the “full faith and credit” of . . . of . . . of whoever chose to write the white paper that declared the actual cryptocurrency in question to be a thing of value. (In Bitcoin’s case, that person, or population group, operates within pseudonym-see above in re: willing suspension of disbelief.)
So, yeah, it’s sketchy. (Riddle me this, though: How many concepts you know of the start out with “crypto-” aren’t?) Let’s put an optimistic spin into it, though, and refer to it as untested. Then let’s test it. Honestly, it’s the simplest way to figure it. Here’s what you do (or don’t do, if you’re the type of person who has qualms about putting your cash axtisi hazy concepts that may collapse with a moment’s notice but that can be the magical money-spawning harbingers of our collective future): Take the kind of walking-around money that you’d blow on a pair of shoes that seemed essential for about a few minutes, or perhaps the equivalent of an enjoyable-but-forgettable night out on the town. Open a Coinbase account. Coinbase is surely an exchange for your biggest cryptocurrency players-consider it the brand new York Stock Exchange for crypto. It’s in which you buy and sell coins, or fractions of them. (Just trust me with this one: Coinbase is every casual player’s entrée; it is to crypto what AOL ended up being to getting online in early ’90s.) You link a charge card in your Coinbase account and get Bitcoin, Ethereum, or Litecoin. (Bitcoin, while somewhat Captain Obvious, is the crypto that’s most easily changed into other kinds of coins; it’s also the one that’s most widely accepted as payment for actual products or services, from OkCupid to Etsy for an alpaca farm in rural Massachusetts.)
So, yeah, it’s easy. You will find, it could be addictive. Rather than reflexively checking Twitter or Instagram while waiting around for the train, I’m now watching the sine curve of my crypto account on one of several apps. My Twitter feed features a new, almost psychotically geeky component: Crypto Twitter. My spouse came home one other night coming from a night out to discover me watching neither tennis nor politics but, rather, a YouTube video of the teenage boy who I likely wouldn’t trust simply to walk my dog dutifully explaining how you can convert Litecoins on Coinbase to Ripple coins on that aforementioned China-based exchange, Binance, utilizing the GDAX exchange being an intermediary host in order to avoid trading fees. (Reader, it worked!)
So, how am I doing? With a whole two weeks under my belt, my main anxiety over my “investments”-it still feels a bit grand to use the phrase, considering that the midnight-sweats element of my psyche is still convinced the Trading Bitcoins is an invention of Chinese intelligence to raid our pocketbooks after their Russian neighbors raided our democracy-is they are, well, maddeningly stable. The $400 worth of Litecoin I began out with (I purchased at a dip in the market) is maybe $20 down; the $400 in Ripple which i jumped over a week later during the things i thought had been a preposterous low is up merely a $20 roughly; and also the $200 in Bitcoin that I dutifully purchased a couple of days after that is actually the identical. (There already is, though, One That Got Away: After reading the proverbial “hot tip” from what appeared like a credible source on Twitter, I yearned to get the XLM coin from Stellar, which, the source said, was poised to “take off.” Yee-haw! Of course, this is the kind of thing I told myself I wouldn’t do-at least until I learned more details on how all this works-therefore i didn’t. Also of course: The coin, which is up almost 30,000 percent over the past year, gained another 20 % inside the day approximately since i have passed it up.) I’ve even bought a “digital wallet”-you can store your hard earned money on the exchange you buy it on, though, so far, only Coinbase guarantees it, so it’s recommended you retain funds on these tiny pieces of hardware-but, because of the insane demand, it’s on backorder until March, so for the time being, well, Bitcoin better have my money.