TAMPA, Fla. — At Florida's Bitcoin and Blockchain Summit earlier this month (which was held here in Tampa) Mayor Jane Castor announced she was going to take her next paycheck in bitcoin.
Miami and New York's mayors recently did the same.
Over in Los Angeles, the Staples Center, one of the world's most famous arenas, will get its name changed to "Crypto.com Arena" come Christmas Day, for a reported $700 million.
Cryptocurrency has entered the mainstream and if you feel like you're way behind, you're not alone. But, all of this Bitcoin and crypto talk can be a heck of a lot for us newbies to the coin game, even if it has been around for more than a decade.
So, let’s learn together. It’s a journey I like to call: Crypto 101.
To make this easier, we’ll break it down into four parts:
- What is cryptocurrency?
- How can I buy it?
- How safe is it?
- Am I too late to the game to get in?
What is cryptocurrency?
Bitcoin, Blockchain, Coinbase, Etherium, To the Moon - it’s all a part of the crypto vernacular, but let’s get down to the basics.
In simplistic terms, it’s essentially a peer-to-peer digital cash system that’s decentralized, so it doesn’t go through any bank, government or third party, like how we’d traditionally use cash or a credit card.
“Cryptocurrency, very simply, is just a digital or virtual currency that’s secured by code, which makes it nearly impossible to counterfeit," said Nick Agar, the founder of AXIA, an ecosystem and non-profit for hyper deflationary virtual currency.
"These currencies run on something called a blockchain, which is a distributed ledger where these transactions are being tracked. What makes them that much more secure is they have to go through a proper validation process.”
And that process is called mining, which verifies the transaction via sophisticated computers solving very complex math problems.
"In bitcoin, all of these miners are processing the transaction, which is ultimately securing the network and making sure all the transactions are secure," said Mark Palomba, the founder and chief investment officer at Deltacore Capital, a hedge fund for digital assets based here in Tampa.
"In return, they get newly minted bitcoin.”
Najah Roberts, the chief visionary officer of a crypto services company called Crypto Blockchain Plug, likened it to what we're already doing with digital payments, like Apple Pay or Venmo.
“Money is changing," Roberts said. "We’re already in the digital space...this is just one step further, which is a digital currency, such as bitcoin. I tell people to get knowledgeable about Bitcoin first.”
So let’s do that because there are thousands of cryptocurrencies, but Bitcoin is the most popular and the most lucrative. It’s like the McDonald’s of crypto.
Satoshi Nakamoto created bitcoin in 2009. He wanted an independent way for users to send money to each other - fast and with little to no transaction fee.
“There will only be 21 million bitcoins ever in existence," Palomba said. "They are slowly trickled into the flow of the system by miners, decreasing every four years until 2141.”
So, they’re limited and clearly in demand, with Bitcoin exploding over the last decade. CaseBitcoin says its 10-year compounded growth rate is unmatched in financial history, nearly tripling your money every year for a decade.
How can I buy it?
Okay, so now I’ve got your interest, but how do you buy, trade or sell crypto, like Bitcoin?
“Always make sure you’re using a trusted exchange with a lot of security,” Palomba said. "In the U.S., the biggest exchange is Coinbase, which is the quickest and easiest way for beginners to get into the market.”
“Similar to when you open a bank account," Agar said. "You go through a registration process at one of these exchanges and then you receive one of these cryptocurrency wallets to go into the market and purchase whatever crypto you want at that time.”
How safe is it?
So, now that you know how to buy some, how safe is it?
The Federal Trade Commission says consumers lost north of $80 million on crypto scams during the back end of 2020 and the first quarter of 2021, but experts say that has more to do with a lack of research and knowledge than it does with the crypto process itself.
Blockchain technology is known for its unparalleled security. The user has their identity protected, but all transactions are public, making it nearly impossible to hack or cheat the system. With thousands of miners keeping track of the transactions and showing proof of their work to get paid, it increases the security.
“We should actually be looking to crypto as a far, far more secure way to make our payments," Agar said. "Because of the immutable nature of blockchain transactions and because they’re so transparent on that ledger at all times.”
"Anybody that’s talking about massive gains, immediately you have to put up your red flags," Roberts said. "I meet so many people who are scammed in this space and they don’t know better. The moment you begin to get greedy, that’s the time you begin to get scammed.”
Is it too late to get in?
We’re a decade in, so is it too late to get into the crypto game, or are we just getting started?
“This is a marketplace that’s in its infancy," Agar said. "We’re almost at an inflection point in our economic system in terms of what is possible.”
“The sky is the limit," Palomba said. "We’re only scratching the surface on the technology and the tools and the solutions that this can really offer. In 5-10 years, I don’t think we’ll recognize a lot of the difference that it’ll make in how we transact and do things on the internet.”