On this episode of AI: Decodes the System, AI does a solo episode where she decodes the topic of Cryptocurrency. If you want AI to decode a topic, please send an email to ai@aidecodes.com.
What is Cryptocurrency? If you've been hearing a lot about cryptocurrency recently and are wondering what it is, you're in the right place. In this podcast episode, we will discuss what cryptocurrency is, how it works, how you can use it, and some of the benefits and drawbacks of using it. By the end of this conversation, you'll have a better understanding of what cryptocurrency is and whether or not it's something that you might want to start using yourself!
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00:00.00
aidecodes
If You've been hearing a lot about cryptocurrency recently and are wondering what it is. You're in the right place in this podcast Episode. We will discuss what cryptocurrency is how it works how you can use it in some of the benefits and drawbacks of using it. By the end of this conversation. You'll have a better understanding of what cryptocurrency is and whether or not it's something that you might want to start using yourself. So What is cryptocurrency like that's the age old question right? I say crypto and most folks say crypto for short, but it's a digital or virtual currency that uses. Cryptography to secures transactions and to control the creation of new units of currency. So quick aside what is cryptography. Basically it is a way to secure Communication. So that only the sender and intended recipient of a message can view his contents. So if you think about how you get a text message. Um, when the text master is sent over a server is sent with the code in between and then only the person sending it and only the person Receiving. It has the key to unlock and see that cryptocurrency works on a similar technology. It keeps communication. Very Clear. So Only the folks who are meant to see it see it and like someone Hacks it. But that's like another conversation for another day but crypto is decentralized so meaning is not subject to government or financial institution control.
01:19.26
aidecodes
So by now I think most of you would have heard a bitcoin which is the first and most well-known cryptocurrency that tested out the blockchain technology it was created in 2009 by anonymous person or group that goes by the name of satoshi na nakamoto I'm also gonna mess the name up if you figured out who he she they is. Please let me know but they're anonmous person that created the technology it all started on a white paper that was created in October two thousand and eighteen about this peer-to-peer exchange and that's how bitcoin was started feel free to check it out feel free to Google but I'm going to more so focus on cryptocurrencies in general. So cryptocurrencies are traded on decentralized exchanges and can also be used to purchase goods and services. Some people see it as an investment similar to gold or stocks while others view it as a way to be able to access global payments without the need of a bank or other financial institution. So how does cryptocurrency work. Cryptocurrency works using Blockchain technology episode 19 talks about this so please go back to that episode to hear more about it because the way I'm gonna explain it is not goingnna be is plain english but Blockchain Deck Top excuse me blockchain technology. It allows you to have a digital ledger of all cryptocurrency transactions. It is constantly growing as completed blocks are added to it with new set of recordings. So each block contains a cryptographic cache of a previous block a time step and the transaction data and then the nodes are used.
02:47.15
aidecodes
In that blockchain to differentiate and legitimate make sure that transactions are legitimate from transactionction transactions that are attempting to respin cryptocurrency that's been already used before so basically like we talked about in episode 19 block trim blockchain decode it. It allows you to understand. What blockchain is so please go back there but cryptocurrency works on that technology. So what are some of the ways that you can use crypto instead of just buying bitcoin right? When most people think of cryptocurrency. The first thing that comes to mind is bitcoin and it's true. That bitcoin is the most well known former cryptocurrencies. But there's a whole bunch of other. Cryptocurrencies that are popping up and many people don't realize that there are actually many different legal uses. Let me say it again. Legal uses for cryptocurrency today. Some of the less. Well-known uses for cryptocurrency include donating the charity purchasing gift cars investing in real estate by are protecting your online identity. Storing value of the coin. Um, so that you can take value out later sending money overseas getting a loan paying your employees or contractors some people up Evan came to me and said hey I'm doing this work in your backyard I take bitcoin or I take ethereum or other cryptocurrencies. It allows you to set payments on your website. And also allows you to use reward reward programs for customers or employees so you may say ai how can I do all this well I'll break it down a few use cases you can use it to buy goods and services online. So in fact, more and more businesses are more and more businesses are beginning to accept cryptocurrency as a form of payment.
04:21.83
aidecodes
So whether you're looking to buy a new pair of shoes or a new car. Um, you can use cryptocurrencies to make those purchases. Um, if you have ever tried to send money overseas. You know that can be a hassle you have to go through a bank or other financial institution and they typically charge very high fees. But with cryptocurrency you can send money anywhere in the world quickly and easily and without those silly fees that they attached to it also did you know that cryptocurrency can be used to donate to charity. That's right if you're looking at a way to get back but don't have cash on hand you can donate some of your crypto. Um, and it is also tax-eductible and you can get a little bit back during tax time. So those are just a few ways that people use cryptocurrency today. So what are some of the benefits of using cryptocurrency. Well one benefit of using crypto is that you can be. That you can actually use it anonymously and send and receive payments so you don't have to tie it back to yourself right? Um, I'm not saying this for dark web or for anything else, but that is one benefit cryptocurrencies are not subject to the same regulations as traditional financial transactions. So there is more privacy and you can remainate remain anonymous when using crypto additionally cryptocurrencies often seen as a more secure. Um transaction than traditional currencies because it is decentralized and not subject to government or financial institution control also is believed to be least likely to be hacked or stolen. However.
05:48.33
aidecodes
They have been hacked and or stolen. So just keep that in mind there are also a lot of drawbacks to using cryptocurrency and I cannot do this podcast without sharing those 1 drawback is that the value of cryptocurrency can be volatile you all have seen especially recently with the price of bitcoin. It has fluctuated greatly since its inception. Other coins as well. A lot of folks are buying coins when they were receiving extra money during the pandemic and a lot of those coins like skyrocketed up and then felled and crashed down so that's something to think about cryptocurrency is still relatively new and is not yet as wily accepted as a traditional currency. So. There's always risk of that. There's also risk of fraud theft or mismanagement when using cryptocurrencies. Everyone's popping up with all these different cryptocurrency currencies out there and you need to make sure you are doing your research before you putting any money into this you all may have heard a lot of buzz around ftx lately that is one space where we've. Seen that in the last few weeks so if you are not aware of what's happening with ftx please Google and you will learn a lot about how that cryptocurrency went on a rise very quickly I think it started in 2019 and has fallen very quickly. So with that being said, should you start using cryptocurrency. That's ultimately up to you to decide. However, if you're interested in trying out this new form of digital currency. There are few things you need to keep in mind make sure you do your research to find a revable exchange or wallet to st store or your cryptocurrency you need to make sure your cryptocurrency is in a wallet that has.
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aidecodes
Authentic identification. 2 wo-factor Authentic identifiation codes and things like that that can keep others away from it so it cannot be stolen. Please do your research, you not just buy on exchanges and leave it. There. A lot of people buy it on exchange and then take it to their wallet. Some exchanges have wallets as well. So please make sure you have a wallet that you can put those currencies in just like you would for any money Also be aware of the risk associated with using cryptocurrency and only and invest what you can afford to lose I'm gonna say that again, be aware of the risk. Only invest what you can afford to lose a lot of people were paying a lot of money in this during a pandemic and we're losing a lot of Money. You do not want to put your house up your other assets up to buy this stuff. It is not that serious. Please don't do that Cryptocurrency is very fascinating and it's a new technology that has exciting. Alternative um traditional uses to or alternative to traditional tech currencies and traditional uses of how we think about Currency. So with the right information and precautions. It can be a great way to send and receive payments securely and anonymously hopefully this podcast has helped you gain a better understanding of what cryptocurrency is. Hotworks and how you can use it and some of the benefits and drawbacks of using it if you have any questions or comments feel free to drop them below the episode also feel free to rank all right Y I'll see all soon and thank you for listening.