Top 10 Cryptocurrency Questions and Answers!
Learn and understand cryptocurrencies in just a few minutes from the basic questions to advanced answers unlocked the hard way by experience! Would you read this post for answers to the top 10 questions I see about digital currencies like Bitcoin and Steem or watch the video I did live below?
Top 10 Cryptocurrency Questions and Answers!
- What are cryptocurrencies like Bitcoin, Steem, Ethereum, and Litecoin? Digital currencies such as Bitcoin and Steem are like electronic money issued and managed by users. Servers setup by entrepreneurs and companies handle all the transactions while exchanges like Coinbase and Bitstamp allow changing fiat currency like USD to cryptocurrencies like Bitcoin which provides the real value. Bitcoin is currently accepted as payment for goods and services on thousands if not millions of websites worldwide with continuing adoption every day. Cryptocurrencies are also a popular choice for the black market because of relative anonymity and ease of use compared to using credit cards and bank accounts. Digital currencies are also very popular in countries like China where moving wealth out of the national economy and into the global market is difficult.
- How is the value of a cryptocurrency determined and where can I see it? https://coinmarketcap.com/ has a list of cryptocurrencies ranked by the value of 1 unit of that currency times the cost on an exchange to buy it which equals the market capitalization. For example, 1 Steem today is worth $1.56 on Poloniex and Bittrex as I write this. With 235,749,278 STEEM available, that means in theory to buy every Steem at the market price today would cost $1.56 times 235,749,278 which equals a total market capitalization of $368,544,488. As you can see these numbers are all really fiction because the price moves all the time as does the quantity available meaning no one is going to actually be able to buy all the Steem in the world with $368 million. Still, the market capitalization gives a rough estimate of the total value today of a digital currency.
- What are the most exciting reasons to become involved with digital currencies? With the ability to transfer money in just 3 seconds to anyone in the world with a Steemit wallet without any fees, digital currencies like Steem make sending and receiving money 10 times easier than using wire transfers, PayPal, or Western Union. Digital currencies are just like cash meaning for merchants receiving payments this way guarantees you actually get the money whereas with processing credit cards using Stripe or PayPal there is no guarantee the customer actually paid because of the ability to easily to a chargeback with almost no chance for the merchant to win. I believe that money in the future will be primarily transacted from user to user with digital currencies meaning that buying even a little bit today may be the biggest investment opportunity going forward and an ideal retirement plan!
- Worst part about using cryptocurrencies? Lose your password or make a mistake in the transaction and you lose it just the same as if you lost your wallet or mailed cash to the wrong address. Cryptocurrencies can be extremely unforgiving when it comes to making mistakes because many wallets are only locked with a password with no hope of getting back in if the password is lost. To make matters worse, they are relatively easy to steal compared to say robbing a bank. For example if your wallet is unlocked on your computer or your account is open, anyone that has physical access to your computer and knows how to make the transaction could easily clean your whole wallet out with a few clicks the same as they could taking the cash out of your wallet. Law enforcement at less than the NSA level is not likely to be able to help out either unless the thief is sloppy beyond belief because it is easy to move any cryptocurrency through some kind of anonymous transaction that makes tracking it nearly impossible to those without access to the real time global electronic monitoring system which no one is going to allow use of to track down some stolen cryptocurrency! Fortunately Steem has both account recovery and Steem Power both of which make it significantly more difficult to instantly clean out an entire account. That said, I have seen at least one Steemit user accidentally send as much as $200,000 to the wrong account and thankfully the user that received it is giving it back in exchange for a 5% fee offered by the sender! Read more at https://steemit.com/steemit/@ravensw/steem-whale-accidentaly-send-a-lot-of-steem-by-mistake-to-no-name-user-ouch. Ironically the ease of losing cryptocurrencies is also likely to drive the value up!
- Which cryptocurrency is best to buy today? The best cryptocurrency to buy is one we are willing to hold onto even if it goes down. For example, I believe in Steem enough that I am willing to hold it even if it goes down 99% and would start buying more of it if the price dropped. I have no intention of selling and am continuing to invest for the long term because of the supportive and energized group of users we have on Steemit! One of the most expensive mistakes I made starting out with buying Bitcoin, Ethereum, and other altcoins was to buy with the belief that it should go up and therefore make me money. When it actually went down, I got into fear and anger because the real reason I had purchased was just to make money which obviously was not working out in the short term as the price dropped. Naturally I could only take this pressure so long and sold down low to "cut my losses" which also cut all my profits when I sold over 30 Bitcoin at around $200 in 2015 after a year of buying it and hoping to make money. Buying into any cryptocurrency with the expectation it should make money quickly is a guaranteed way to be miserable because even if it goes up, then the pressure is on as to when to sell? I am currently only buying Steem and investing in Steem going forward because I believe in the community of users of which I am a part. With fiat currencies, the government issuing the money and the people using it determine the value. Would it be a good idea to buy into whatever country's currency was hot today or recently up or had the best features? Obviously that would be a huge risk. The same with digital currencies. Just buying in on hype or to make money will produce little joy even if the price goes up. Buying in with the intention to become a long term user of that currency and to participate in its development and growth is the best opportunity. Therefore, I suggest and am practicing only investing in digital currencies where I am willing to go through the good times and bad regardless of the price. Steem is where I am today and where I plan to stay indefinitely!
- When to sell a cryptocurrency? Before Steem I was all in an another altcoin and really excited about it. When I first bought the price was low and made payments to me every week just for holding it. As I tried to participate in the community over the next several months, I was consistently met with a mix of excitement and hostility. When I began talking openly about this, the negative emotions won over in the community and in me. Originally I had invested and been happy to hold no matter what the price which quickly went up after I bought it. After months of frustration in trying to be of service in helping that cryptocurrency grow, I suddenly found myself staring at the price charts with fear. I was back to only seeing the currency as a way to make money and I knew it was time to exit because I now no longer cared if I missed out on the profits from a price increase while having the price go down had become completely unacceptable. I sold everything just before the price doubled again but still made 7 dollars for every dollar I invested. In other words, when the digital currency became a means to an end of making money instead of an investment I was excited about, I sold it because why have my money tied up in something I no longer care about? I used about one third of what I sold to invest in Steem and am extremely grateful for this experience today because I learned how to make a graceful exit. Could I have made more money by holding the other currency longer? Sure. Is the point of investing purely to make money? No because the point of investing is to use money to do some good in the world and if there is no joy from investing, there is no good in it either.
- Where are the best websites to use for changing fiat like USD and EUR to digital currencies like Bitcoin, Ethereum, Litecoin, and Steem? I use Coinbase.com with Bitstamp.net as my next best option for buying and selling Bitcoin, Ethereum, and Litecoin to USD because I can make direct transfers from my bank account and quickly move Litecoin into an exchange where I can then buy anything else.
- What exchange is working the best today to buy altcoins? Bittrex.com is where I am buying and selling most of my Steem and Steem Dollars into Bitcoin because the transactions complete in about half an hour total from sending SBD to Bittrex to having USD in my Coinbase wallet. For buying into Steem, the reverse is true where I can have my USD changed into Steem in my wallet at the best rate in about thirty minutes. Poloniex is what I used previously but many users have been unable to make withdrawals leaving me to suspect a crash is coming.
- When to invest? The ideal strategy to me seems to be to invest consistently over time because this minimizes the impact of volatile prices. For example, if you decide you want to invest in Steem but are not sure if the price will be up or down later, buying in every month instead of all at once is often an ideal way to go forward because if the price goes down, you get a better deal next time. If the price goes up, you got a good deal buying in initially. If you feel the price is absolutely a great deal today, then buying in all at once can be a good strategy when combined with an ongoing investment plan to continue buying more in the future. I bought into Steem all at once to begin and then bought more as the price dropped right after I bought it. Today the price is up more and I am grateful just by making posts I am continuing to invest more as an author. If the price takes a serious drop below a $1, I will begin buying in again with cash in addition to my author rewards because I believe the price will be over $10 in a few months. In summary, investing over time is ideal because it helps account for the up and down prices more effectively.
- How about day trading crypto? While profits are possible trading cryptocurrencies, so are losses. My first year involved me spending hundreds of hours trading Bitcoin with a result of losing over $5,000 with nothing to show for it. Simply trading digital currencies is very similar to gambling because no one really knows what is going to happen next although anyone can guess! While I was lucky to do nothing expect lose money when I started, the worst thing that can happen is to get lucky right away and get a big ego about what an amazing cryptocurrency trader we are. The predictable result then is increasing the volume and risks in trades with eventually losing everything with again nothing to prove to anyone that we learned anything except a story. If you are not aware of how the very top traders and companies rig the game to wipe out ordinary traders, then the odds are stacked against winning just as much as going to the casino. I struggled with a gambling addiction not because I lost all the time but because sometimes I did win big but mostly lost. The night I turned $10 into almost a thousand in college was followed by years of gambling compulsively with most nights resulting in losing all my money and occasionally turning a few dollars into a thousand. Cryptocurrency trading is the same. The systems are setup at the highest level to capitalize on the ups and downs with almost no risk and are great for consistently taking money from ordinary traders like me when I thought I was smarter than everyone else while allowing just enough good things to happen so the game continues to be played. Avoid trading on all levels or risk the consequences of losing a lot of time and money overall even if initially or occasionally big success comes.
Thank you for reading this and I hope it was helpful!
If you have more questions, would you please post them as comments here because every reader then will have a chance to answer your questions?
If you would like me to make more posts like this, would you please upvote this post because it will help me continue making Steemit my "real job"?
Love,
Jerry Banfield
Hey @jerrybanfield
I notice your top two upvoters are again these "BookingTeam.com" guys. Do you know anything about this? I know you emphasize giving back to the platform, a position I agree with, does this behavior concern you?
https://steemit.com/curation/@lexiconical/exposing-advertiser-circle-jerks-in-trending-reward-pool-rape-and-bookingteam-com
Note: I am looking for information, I am not implying anything.
Upvote for visibility.
@lexiconical thank you for sharing about the circle jerks because I was just talking with my friends about that! The difference with linear voting is that now everyone can participate whereas before the biggest whales could do the most epic circle jerks but most everyone else could not do much more than watch!
I read the articles you linked to and another one after that and made a few comments because I believe our upvotes do need to do the most good! Allowing circle jerks to consume a significant percentage of all rewards leaves out everyone that has not found a circle to jerk with! LOL
I am very grateful for every upvote I receive and try to thank those voting with the most power however I can from comments to shout outs and whatever else I can offer!
I try to focus my votes on bringing posts up from under a $1 to $5 or $10 because I think that has the highest impact for our future. I am grateful for every upvote I receive especially the high power ones. While I normally do not curse, I think I said something like holy shit when I saw the $800 upvote come in right away on this post today and whatever I did to earn that I hope I keep doing it!
"I try to focus my votes on bringing posts up from under a $1 to $5 or $10 because I think that has the highest impact for our future."
I think you are right, Jerry. That really helps authors get to the Hot page.
Thank you for the thorough reply!
follow me @lexiconical @jerrybanfield
please
Congrats !! When I saw that the video would last than 30 min I thought I wouldn´t be patient enough, I was wrong, it was clever and fun, I´m sure you actually made, not just me but everybody, laugh in some parts. Keep rocking!! Buena suerte!!
@jerrybanfield 800 haha you're so lucky i wish I was getting up to that number more often- I feel weekends are slow and dont really generate much- had some quiet posts.
good on you though :)
Followed you bro. :)
Thx, followed u back
Focus on the posts. That's the key right there. Thank you!
I'm glad you addressed this issue. Its very easy for speculation to run rife in the absence of clarity. Shared your article, as i think alot of newcomers to steemit may not be inherently involved with Crytpocurrency. This is consistent with the narrative of all important steemit community growth the early adopters really expect to see in the coming weeks and months ahead.
So thanks :)
and what about nanohash bitcoins?? https://steemit.com/bitcoin/@quantumdragon/nanohash-bitcoins-real-1
I'm not sure that mentioning these people will actually make them go away, you know. But thats just how I see it...
It seems logical that those with the most invested would want to help those working the most to pump the value of Steem and Steemit up to keep going because that would be best for everyone's existing investments. It is an honor to earn an upvote from one of the top investors in Steemit which is @hendrikdegrote and whatever I am doing to earn that I hope to continue doing it! I trust each user on Steemit to do what is best for all of us especially those with the most voting power and consider everyone on Steemit a friend!
This post help us a lot of information about other cryptocurrency.Thanks
Steemit will never be anything great or big it will crash with this kind of loopholes and exploiting behaviour.
Facebook has turned out great even with allowing advertisers to spend billions spamming users with mostly irrelevant and often exploitative ads. Until we step out of capitalism any system will have the same basic problem.
Placing ads is one thing, but those companies do not control the content on Facebook, which is something that cannot be said for Steemit. Here on Steemit, the content is controlled by the top (liberally estimating) 10 percent.
Yeah I agree with that...... Simple fact
The whales are actually the platforms biggest enemies, and they will inevitably lead Steem and Steemit to its death. The platform is essentially a pay to win platform, and nothing that it is pay to win ever lasts... unless of course it's run by the government.
Whales have a bad influence on steem?
This is a common misconception that many users have.
You must think of steem as a race between users. Whenever someone is refuelling (powering down) he loses position in the race. Steem is exactly the same.
Why are whales not bad?
Because whales have to stay powered up if they don’t want to lose position in the race, by doing so they contribute to increase the price of steem.
Whales who are powering down are not bad either because they are losing position in the race and will soon be eliminated from the race. They also contribute to increase steem supply on the market thus giving everyone a good opportunity to boost their engine.
Another misconception is that whales are draining the reward pool.
Again, people should stop thinking of the reward pool as a limited thing, the reward pool is potentially unlimited because the price of steem can increase indefinitely.
Whales by staying in the race and not refuelling ( powering down) essentially increase the size of the reward pool by increasing the price of steem thus allowing everyone to earn more.
Whales are either powering down and will be out of the race soon or powering up and increasing the size of the reward pool, so they are definetely not the enemies.
I suggest you check https://steemwhales.com/ to see where you are in the race :)
A few months ago I was a dolphin and now I am a whale because I never refuelled during the race. Many users who were ahead of me have however and are now behind. Everyone who are on steemit today basically have a head start on the race, so they will soon become whales too.
This makes a lot of sense. Thanks for posting that.
Abundant mindset @someonewhoisme.
thanks 4 sharing that.
(upvoted)
I do not think whales are the enemies. I think the problem is that when we post something, it disappears from the front page real fast, making it extremely hard to even get seen. So people start to rely on other methods to build up. However, I don't really know what would be a solution for the "disappear too fast from the frontpage" problem, though.
Soon we will have communities, like reddit so that would solve the problem you mentionned. It's in steem roadmap 2017.
STEEM could replace pretty much every type of social media out there......
@someonewhoisme thank you very much as a whale for upvoting so many of my posts because you have helped me continue giving everything I can to our community here!
Funny you mention the government, because I think Steemit has an "inequality problem," too, and the way to solve that would be acting more like a responsible and rational government.
That would mean not creating "feedback loops" for "rich people" to get even richer, but instead making it easier for the "little guy" to become "middle class" faster.
I believe this is how the Steemit platform should work, too. It should try to put as many people in the "middle class" of Steemit authors as possible, rather than just show-off with a handful of authors (no offense to Jerry here) that can earn more than a thousand of dollars per article, almost every time.
Yes, I do think that "draws-in" people to the platform, as they see the platform's potential. However, I also think this could be temporary (as in a matter of months to a year). If the platform grows 10x in number of accounts, but 99% of the users still make less than $50 a month writing an article every day, while top authors earn, presumably, over $10,000 per post by then, then this will end-up being a big turn-off for everyone, and they will start dumping the platform.
The platform would be way more successful if, maybe not every user, or even half of the users, but a good percentage of them can say that they can live off Steemit earnings. This doesn't necessarily need to happen right now, as the platform still has too few users. But when it's say 10x bigger, I do expect to see that happening.
Steemit could solve the inequality problem rather easily by using an algorithm for the payouts that gives diminishing returns for top authors. For instance, if a post has already made $200 from the first 100 votes, with an average of $2 per vote, then the next 100 votes should only give the author $100. The next 100 votes after that should only give her $50, and the next 100 votes $25. Something along those lines.
This is just a solution for capping the earnings of authors that consistently rank at the top due to their big initial followers on the platform, or perhaps by bringing their followers from Twitter or Facebook or YouTube to Steemit, which in a way gives them an "unfair" advantage compared to others who want to start from scratch let's say in the year 2019. Then spread that "unused money" in some way to authors of less popular posts.
There could also be some ways to solve the whale problem and/or loopholes used by vote rings and such. For instance, a "whale's" upvote should be worth more when given to a post that has under $100, but worth much less when given to a post that has over $500. The same diminishing returns idea from above, but applied to whales directly.
Obviously, these algorithms can be tweaked, and they don't have to work exactly as I said. But I do believe something along those lines is needed so that the newer authors are encouraged to stay with the platform and see that they can indeed have good earnings potential here by seeing it with their own posts, rather than just staring mesmerized at how some top authors (consistently the same ones) keep earning $1,000 per post.
As a new user, I see the same issue. There are posts created by the early adopters that have so many upvotes and with plenty of earnings even when the quality of posts is so poor.
I appreciate this concept - diminishing financial returns as the viewership increases through virality. Sounds like a good way to even the playing field and avoid fraud.
@jarexx: you have hit the problem absolutely correctly and your solutions in principal are excellent. That is the only way the platform can be saved from greedy and creepy people
I guess we as human beings are inherently flawed, and always tend to create these circles and loops. It is not a flaw in the system as such, but more a flaw in all of us. We have to be more responsible citizens.
I agree to it.. Let's wait and see what happens in few months.
I've been on this platform for a few weeks and it's obvious why the superstars are liking it, they're getting paid thousands for their content however, for the vast majority with content which is just as good, they barely get a look in.
I suspect I'm beginning to experience the user experience for most of the Steemians on here with an optimistic and hopeful beginning and then a slow realisation that maybe it's not that great with the whales pulling the strings, casting the bait and us minnows swimming around wide eyed, ever hopeful yet utterly powerless.
I'm currently 55/45 in favour of STEEMIT, I'm still hopeful it's going to fulfill its potential but I'm powering down just incase so I can ditch it, if in 3 months, I'm still of the same opinion.
Not to burst your bubble, but "pay to win" systems never ever work.
Take for example: World of Warcraft gold, Diablo 3 real money auction house, and almost every mobile game ever created, etcetera.
Eventually, all pay to win systems are totally manipulated by people with lots (whales) of money, hackers, cheaters, fakers, liars, or in China's case... people with a whole lot of free time on their hands.
The biggest reason why Reddit is so successful, albeit gamed a little itself, is because there isn't any real incentive to post, up-vote, or down-vote on there. People do because they want to educate, learn, agree or disagree. The fact that Karma points don't have any value at all is the platforms biggest advantage.
Great point. Steemit will never get to one billion authors making money. People will have to want to come hear to read and curate, since there isn't enough time in the day for "one billion great bloggers" to be successful authors on Steemit
STEEM On !!
Dave
Exactly, if this thing is ever to be successful, people have to come here for the content and content alone. The currency you make or may make via your creation or comment needs to be an afterthought... and appreciated treat if you would.
I love reddit.
For everyone with a lot of Steem Power I think it is our duty to both help each other and help those just getting started. I try to do both as best I can. With any system there is always a way to exploit it and Steemit at least makes it transparent. On Facebook, it is just the same except not obvious to the average user how it happens or in the user's face in the form of ads which are taken for granted. I much prefer Steemit's system over being shown ads on Facebook.
There's a thing called adblocker. Then you just follow whatever brands you like...
I feel that my time, money, contributions or whatever effort won't be showing here anytime soon.
you make thousand dollar on this post this great,
This post help us a lot of information about other cryptocurrency.
My contribution for this platform is over until this is a fair space. This shit is rigged.
I CAN'T STOP SAYING ABOUT THIS FILMS _ _ YOU SHOULD WATCH THEM _ _BEST ON YOUTUBE
I WANT THIS FILM BE POPULAR. DON'T LOWER ME CARMA. ONLY WATCH on YOUTUBE.
https://steemit.com/neill/@uneducated/new-best-films-on-youtube-firebase-and-rakka-donate-them-if-you-like
LOL, You're a funny guy Jerry. I had my doubts about you when I heard you were here. But hey, it's great that we have an open market eh ?
Welcome to Steemit !!!
Hey @jerrybanfield :)
I just saw your other post on upvoting undervalued posts which need more attention. Would you consider this post:
https://steemit.com/health/@theaustrianguy/this-website-saves-lifes-the-one-basic-life-support-website-everybody-should-know
It is a very important issue and the content should be known by everyone. Furthermore the collected money will be given out to a rescue organisation and not into my own pocket :)
Thanky you sir!
This post received a 3.3% upvote from @randowhale thanks to @theaustrianguy! For more information, click here!
great people sharing awesome amount
If you like it share the message :) But most importantly - go through the tutorial :)
thank you, good post!
If you like it share the message :) But most importantly - go through the tutorial :)
Great work bro, I will be upvoting you here and resteeming and upvoting your original post.
Keep it up!
As I mentioned in the original post - Thank you too - By sharing/upvoting everybody does his part in making the world a safer place for all of us!
You are welcome. Keep it up!
Voted it up thank you for sharing!
Thank you @jerrybanfield! :)
@jerry great work as ever
Another awesome post @jerrybanfield, you made so many great points in this post.
Number 5, stuck out the most for me and this is why I'm here not to mention your original announcement post and course about STEEMIT.
"Which cryptocurrency is best to buy today? The best cryptocurrency to buy is one we are willing to hold onto even if it goes down. For example, I believe in Steem enough that I am willing to hold it even if it goes down 99% and would start buying more of it if the price dropped. I have no intention of selling and am continuing to invest for the long term because of the supportive and energized group of users we have on Steemit!"
Everyone says that until the stock.. errrr currency hits their stop loss sell point. Same as stock market. Everyone says and preaches "HOLD!" and then they sell out when it goes up high or goes too low. Otherwise we'd all be sitting on billions in virtual currency eating only beans and living off government subsidies watching our cryptocurrency.
haha you make a good point. I wish I had never sold any of my crypto from the early days. I would be sitting on stacks on top of stacks.
i keep reading it over and over " I believe in Steem enough that I am willing to hold it even if it goes down 99% and would start buying more of it if the price dropped. I have no intention of selling and am continuing to invest for the long term because of the supportive and energized group of users we have on Steemit!".
It's a good thing that you're only investing in Steem. That makes me more comfortable for the future since I have done the exact same. :P
So you are telling me...
$368 Million and I owe all the STEEMMM
Thanks Jerry,
that's a nice summary for beginners!
Answered a few of mine, thanks!
Good post man!