Bitcoin’s price surge in the late 2020/early 2021 brought blockchain back to wider public’s attention. While this field of technology and subsequent financial applications are growing at high speed, the knowledge and understanding of “what is the all about?” seem to be lacking among those who don’t work in tech or finance. According to the survey, published in May 2020 by UK-based bank HSBC, 59% of consumers polled have never heard of blockchain. Interestingly enough 80% of those who have heard of the tech said they don’t understand what that is.
At the same time, the mass media of wide reach keep on publishing titles that capture public’s attention but more often than not fail to explain the basic concepts and notions:
Financial times 14.01.2021
New York times 30.11.2020
I have personally been asked by some friends and family members who know my interest in that field questions such as “how to buy bitcoin?”, “what is that ETH?” etc. When I first got interested in this topic in 2017 I would also buy small amounts of tokens based only on what I heard from colleagues who used to invest in that space, but without actual understanding what is it that I’m putting the money into? How does that work? What are the economics behind it? I only started to get better understanding of the field after joining DLT Talent program.
Now, that program comes to the end I decided to keep on learning and focusing on the investing in blockchain technology space. As many of you probably experienced- the best way to test your knowledge is by trying to pass it on to somebody else. In the series of articles, I will aim at creating a brief and to-the-point guide to the space of investing into blockchain for newbees. It is not intended as investment advice, but as a guide to blockchain/tokens/DeFi concepts, which one may find interesting for own investment portfolio. Being a new kid on the block myself, I hope to publish article every 2 weeks and by doing so, keep on researching and preparing a to-the-point summary on selected topic. My intention is to write articles of maximum 1500 words so that they can be red quickly. This choice means that I will not be explaining some concepts/definitions myself, but rather share links which reader can use to deepen his or her knowledge. The initial plan for the 1st series is to cover the following topics:
· What are the different types of tokens- payment/utility/security and how do they differ? Why should you, as an investor care?
· Getting started: wallets, exchanges, and swapping tokens- how to enter the space from practical point of view.
· Coins- Closer look into Bitcoin & Ethereum — what drives their price? What can we expect in the near future?
· Coins- Closer look into Litecoin & ADA- what drives their price? How useful are these coins?
· Making money on your crypto assests- from defensive to very offensive strategies.
Getting started- DLT, Blockchain- what are these?
But before we dive into the investment rabbin hole, if you are a total newbee, it is important that you get some basic understanding of what blockchain and Distributed Ledger Technology are. DLT is a decentralized database managed by multiple participants, across multiple nodes. Blockchain is a type of distributed ledger technology.
Feeling confused? The video below provides a good explaination what “ledger” and “decentralized database” mean. After watching it, you should get a high-level idea what blockchain technology is:
If you are the kind of person who likes to go a bit deeper, I could not reccommend enough the following demo that will will walk you step-by-step through blockchain operations:
Thanks for reading and I enourage you to follow my profile for the future articles. The first one, on the different types of tokens and why should you care coming up next Monday, the 22nd of February.