What is a Cryptocurrency

What Is A Cryptocurrency

What is a Cryptocurrency

The easiest way to explain “what is a cryptocurrency” is to say that it is a digital currency rather than something physical you can hold in your hand and are primarily exchanged over the Internet. They also operate outside of traditional banking systems and government control. Essentially they are invisible.

Why Is That a Good Thing?

Because they CANNOT be manipulated by the Federal Reserve, or any other of the numerous central banks around the world. So they cannot be inflated or devalued by them, nor can they be seized or confiscated by any Government. 

Which is why Cryptocurrencies are probably a more “honest” and “secure” form of currency,  than any other in the world today.

I mean, Just look at how much trouble the global economy is in. With the central banks printing massive amounts of money, government Bailouts, bank Bail-ins (which is where a bank take depositors money) and loads of financial ‘stimulation‘ and manipulation going on.

Its created a world of fiat money that has lost massive value, resulting in one messy financial crisis after another to the next and so on.

But that’s not all…

Government Inference with Traditional Money

what is a cryptocurrency

Ten Thousand Dollars

Just take your own money that you have earned legitimately. Most people are unaware that under the Bank Secrecy Act, if you withdraw $10,000 or more of your own money, your bank is required, by law, to file a Currency Transaction Report with the Financial Crimes Enforcement Network (FinCEN).

This is a special agency that’s tasked with supposedly combatting money laundering, terrorist financing, and other ‘financial crimes‘.

And your bank is also required to file a Suspicious Activity Report with FinCEN.  If it believes you are trying to avoid triggering a Currency Transaction Report by withdrawing smaller cash amounts. This then puts all your past and future cash withdrawals under the microscope.

And If That’s Not Enough…

Taking out your own cash isn’t the only activity the government deems suspicious.

Activities, such as,

  • Depositing $10,000 or more in cash,
  • A foreign exchange transaction worth $10,000 or more,
  • Taking more than $10,000 in cash in or out of the U.S,
  • Receiving more than $10,000 in cash in a single payment as a business, 
  • Or having more than $10,000 in accounts outside the U.S.A, for example.

Any of these and more will trigger a Suspicious Activity Report, even if you are an average law abiding citizen with nothing to hide.

In fact if you are an American citizen, irrespective of where in the world you reside or where you earn an income, you must file annual tax returns and declare all bank accounts and assets (including those of your non-American spouse) to the IRS, just because you are a US citizen.

Again, not many people are aware of the 2010, Foreign Account Tax Compliance Act (FATCA) Not only does this new law impact every American living and working overseas but every U.S born person on the planet.

It also requires all non-US (‘foreign‘) financial institutions, such as banks, to allow the IRS to search through customer databases to identify customers suspected of being US persons, and to disclose the account holders’ names, addresses, and the transactions of those accounts.

“Welcome to the Land of the Free and the Home of the Brave

Then There Are The Civil Asset Forfeiture Laws

That most countries have in some form or another.  Under these ‘civil asset forfeiture laws’, police and federal agents can confiscate any cash you might have, if they ‘merely suspect’ that it was involved in a crime.

They don’t need to file any criminal charges or prove any wrongdoing. They only have to ‘suspect’ or say they ‘suspect’ the cash ‘might be’ involved in a suspected criminal activity. No proof on their part is required! And they can keep any seized cash for themselves. 

According to The Washington Post, since 2007, the DEA alone (just one agency) seized more $3.2 billion in cash from Americans in cases where no civil or criminal charges were brought against the legal owners of the cash. Over the past decade, the federal government has seized more than $28 billion.

What’s disturbing about this, is that in 2015 alone, civil forfeitures, exceeded the amount stolen by all the robbers.

Yes, the U.S Government stole more from the American public through confiscations, than what was stolen outright from robberies and muggings.

But That’s Not All…

Just having this discussion could soon be a considered a crime. I’m not kidding! Even in the USA, this might well become an illegal conversation.

You Don’t Believe Me?

Most Americans, are unaware that in December of 2016, congress passed the Countering Foreign Propaganda and Disinformation Act (CFPDA). This new law removed all your rights to ‘freedom of speech’. This new law states that if an individual’s ‘statements‘ disagree with “accepted truthsthen they are in breach of this new law.

“What is OR are ‘Accepted truths’ is yet to be tested by the courts. But  the type of information on this very page could be deemed to be an ‘unacceptable truth’ – about the government” and be in breech of this new law.

A Growing Alternative to Traditional Money

So it’s no surprise that Cryptocurrencies are becoming an Alternative to Traditional Money because it can be used outside the banking system and immune from theft by governmental institutions, and could be a way of protecting yourself from further attacks upon your rights and freedoms from your own government.

As a result of these infringement on your basic rights and rapidly shifting times, cryptocurrencies are attracting a lot of interest from everyday people.

As of June 2017 total market capitalization of cryptocurrencies was larger than 100 Billion USD and record daily volume is more than 6 billion USD.

What is CryptocurrencyThere are now more options than just Bitcoin, there is Ethereum, Litecoin and Ripple, and many others.

what is a cryptocurrency

The first known cryptocurrency

Bitcoin

You have probably heard of ‘Bitcoins‘. It was the first known cryptocurrency to be used for a commercial transaction back in May 2010, when a web developer purchased two Papa John’s pizzas using 10,000 units of Bitcoin. At that time that many bitcoins was roughly worth about $30.00.

What you may not know, is the value of Bitcoin has been skyrocketing ever since. By 2014  (just four years later), that same $30 of Bitcoin units, was worth more than $5 MILLION.

“Today, that same $30 is now worth a life-changing $20 million!

What is Cryptocurrency

Have I Got Your Attention?

what is a cryptocurrencyThat is an astonishing increase in value, from what bought a couple of pizzas a few years ago, to what could buy you a very nice mansion today.

There are numerous reasons why you should invest in cryptocurrency and the first of which is that soon millions of people will be investing in them, once they realise how powerful and secure this type of currency is.

You don’t even need to buy a whole coin, you can buy units and pretty much in any currency you want.  

This means it’s A HUGE opportunity for you as a CRYTO investor as well as an online entrepreneur to get started before it becomes mainstream:

A Bitcoin Overview

See the 3 minute Video below to get a quick overview of Bitcoin.

There Are Other Reasons  

There are many other reasons, apart from what we have already mentioned, why people will be interested to buy or invest in Cryptocurrency:

Reason #1. It’s HOT

Bitcoin is making some serious gains in valve right now. If you had bought just $100 worth in May 2010, you would now have $72.9 Million today. But it’s not all over  yet, there is still much more upside and there are still many other cryptocurrencies to invest in.

Reason #2. It’s Liquid

Japan’s decision, in April 2017 to recognise it as legal tender appears to have led to the current run-up in Bitcoin’s value. In fact markets in Japan and South Korea have both been fuelled a rally in many other cryptocurrencies.

Reason #3. Hedge Against Market Uncertainty

Gold has traditional been a hedge against market uncertainty. In March 2017, the price of just ONE Bitcoin surpassed the price of Gold at then $1,271.00 and 3 months later it reached $3,018.54… and it still continues to grow.

For More On Cryptocurrency

Growing Acceptability

While these alternative, decentralized modes of exchange are in the early stages of development, they have the unique potential to challenge the existing systems of currency and payments.

  • In a 2013 report, Bank of America Merrill Lynch stated that;“We believe bitcoin can become a major means of payment for e-commerce and may emerge as a serious competitor to traditional money-transfer providers”
  • In June 2014, the first bank to convert deposits in currencies to bitcoin without any fees was opened in Boston.[see Wikipedia]
  • In 2015, merchants accepting bitcoin exceeded 100,000.[1]
  • Firms that are accepting bitcoin include PayPal,[2] Microsoft,[3] Dell,[4]
  • In April 2016The Wall Street Journal, stated that “Bitcoin is starting to look slightly more stable than gold”.[see Wikipedia]
  • On 3 March 2017, the price of a Bitcoin surpassed an ounce of gold.
Legality

Many people worry about the legality of cryptocurrencies as the legal status of cryptocurrencies varies substantially from country to country. 

While some countries have allowed their use and trade, others have restricted them. As various government agencies, departments, and courts have classified bitcoins differently.

  • The China Central Bank, initially banned the handling of bitcoins by financial institutions in China during an extremely fast adoption period in early 2014, then they relaxed they rules on them, only to ban they again in September 2017.
  • In Russia, cryptocurrencies are legal, although, it is illegal to actually purchase goods with any currency other than the Russian ruble.
  • In Japan (April 2017) they are recognised as legal tender.

A Good Time to Get an EducationWhat is a Cryptocurrency

While it seems like a good time to invest in Cryptocurrency (There are now more options than just Bitcoin, such as Ethereum, Litecoin and Ripple, for example) and as of August 2017, there were more than 1,000 digital currencies in existence.

But knowing where to start and how to invest in these new assets could be an overwhelming and daunting task if you don’t know what you are doing.

Which why it is probably a good time to get educated about Cryptocurrencies and learn how you can invest and profit from them.

Introducing

A Video, training program that I have created based on my book ‘Why Invest in Cryptocurrency and How to Get Started’. It will give you the information you need to explore this fast growing, and potentially exciting profitable opportunity while helping you to avoid the common mistakes with this advanced video series, putting you on the fast track to investing in cryptocurrencies.

What is Cryptocurrency

Get the Cryptocurrency Blueprint here

Traditional Money is Not As Stable As You Think.

What is a Cryptocurrency

Traditional money as we know it has actually had a tumultuous history. The Romans may have been the first to debase their currency in a significant way, and many historians believe this was a key factor in contributing to the downfall of that empire.

Unfortunately, the world has not learned from those events and countless other currencies and country economies have also bitten the dust due to the government manipulation of the money supply since then. Many currencies around the world have failed due to government tampering and the resulting hyperinflation.

Notably and alphabetically;

  • Austria (1922)
  • British Malaya (1945)
  • China (9th Century and several other times 1945 and 1949)
  • France (1796)
  • Germany (Weimar Republic, 1923)
  • Greece (German-Italian occupation, 1944)
  • Hungary (1923 and 1944)
    what is a cryptocurrency

    Zimbabwe One Hundred Trillion Note

  • Iraq (Between 1987 & 1995)
  • Mexico (1983)
  • North Korea (2010)
  • Poland  (1923 and 1990)
  • Philippines (1944)
  • Romania (1990)
  • Soviet Union (1924)
  • United States (1779 and 1864)
  • Vietnam (1988)
  • Yugoslavia (1994)
  • Zimbabwe (2008)

Recent Events in Venezuela

Currently, Venezuela has the highest inflation rate in the world at 741%. In 2014, 6.25 bolivars got you about US$ 1.00. Today, you need around 16,000 bolivars to get that same $1. So the Venezuelan Bolivar is basically worthless, you can’t even buy a loaf of bread with a wheelbarrow full of them.

So it’s no surprise that Venezuelans are looking to purchase alternative currencies. And the U.S. dollar has been one of their favourites, however the government has tighten, even further controls on currency exchanges. It restricts the number of dollars people can buy and what they can do with them.

As a result Bitcoin volume has surged to record highs in Venezuela since the crisis has deepened…

What is Cryptocurrency

How Are They Using Them?

They are using bitcoins to buy Amazon gift cards. They buy the gift cards so they can order goods and food from the online store in the U.S. and other countries. The goods are then delivered by courier to Venezuela. The people are doing this in order to survive. But they’re not the only ones who have done this.

In 2013, Cypriots loaded up on bitcoin after the Cyprus government closed banks for a month and then confiscated account holders’ money to “bail in” the banking system. Bitcoin volume in Europe shot up 286% during that time.

Then there was Greece’s 2015 economic crisis, when the government shut down all the banks for a month. Bitcoin volume in Greece increased 79%.

Bitcoin is fast becoming the world’s premier chaos hedge. And we are heading towards more chaos in the coming months and not so distant future.

Getting Out of Government Controlled Money

So if you can’t trust government money, what can you trust? 

Gold! Well, yes! But it’s not so easily traded at retail stores and banks and its difficult to move and store.

If you need a way to protect yourself from just relying solely on vulnerable government created paper currency.  Then the solution may be: cryptocurrencies.

Cryptocurrencies could be a good way to protect yourself from the wealth-destroying policies of governments and central bankers. As digital currencies like, Bitcoin (for example), are not owned by any government or any bank and as they have a fixed supply, Politicians and bankers can’t inflate its value away or outright steal them. They are also easily moved, stored and traded

Buying Cryptocurrencies

If you want to buy* Cryptocurrencies (like Bitcoin) online, it can be a daunting experience. However I have found a useful site called LocalBitcoin.com which is a person-to-person bitcoin trading site.

Unlike other stock-exchange-like bitcoin trading sites, you can make a trade directly with a person from the US or from another country who can exchange their local currency to bitcoins. This makes the process lean and fast, as there is no corporate overhead. You get your bitcoins instantly.  

See image below for real time value of a single Bitcoin

         

The site allows users to post advertisements where they state the exchange rate and payment methods for buying or selling of bitcoins. You reply to these advertisements and agree to buy bitcoins with cash, online banking, Credit Card, PayPal or whatever method is specified. Bitcoins are placed in LocalBitcoins.com web wallet from where you can pay your bitcoin purchases directly.

For more see the video below:

 You can click the image above or use the link here 

* Make sure you get an education first, before you start buying and selling cryptocurrencies – as it is a new industry and there are risks!

For more information about how to buy Bitcoin with cash, credit card or PayPal etc. You can review my post How to Buy Bitcoin https://onlineaffiliatewealth.com/how-to-buy-bitcoin 

In Conclusion

what is a cryptocurrency

Governments are trying to prop up the Economy

Governments around the world are pumping up their supply of money, printing billions of notes and injecting astounding amounts of credit into their economies via their central banks to supposedly ‘stimulate spending’ in the economy.

Japan has been doing that for nearly two decades, without success and now we even have negative interest rates in many European countries, meaning you have to pay them interest to hold your cash.  Nothing is working and things are not getting any better.

We are seeing increasing regulation, increasing possibility of warfare, increasing social controls, and the removal of individual rights to financial privacy and tightening of banking regulations and capital controls, in ever more dramatic ways.

Unfortunately, there are no positive political trends in today’s world. None of the Governments of the world are cutting back on regulations, reducing taxes, or eliminating laws anywhere. They’re doing just the opposite and making the entire global financial system even more unstable. 

Those who do not want to wait for the potential collapse of the financial system and seek to sidestep this distressing possibility, might wish to pursue some type of monetary diversification as a bridge to freedom and future financial security.  And one way to do that is get educated about cryptocurrencies. 

 Get the Cryptocurrency BluePrint here

Finally

Take a look around and review other pages and posts while you are here and why not grab a copy of my eBook, Why Invest in Cryptocurrency? while you are on this page.

If you enjoyed this article “What is a Cryptocurrency” please feel free to socially share and leave a comment below.

And if you do I will reward you with a free copy of my 50+ page ebook; Why Invest in Cryptocurrency? 

So what are you waiting for?

Accept my bribe and socially share and leave a comment below. Thanks!

To bookmark this page for future reference you can do it now using (Ctrl+D)

About Peter

An International Speaker, Writer and Internet Marketer, living in Shanghai, China, teaching Business / English at a Chinese University and making a difference to the world. As well as bringing you great information and recommending awesome products that will make earning online while living internationally - a breeze. https://onlineaffiliatewealth.com/about-me

84 comments

  • David

    Under the first heading government interfere with traditional money,
    it should say ” this then puts all your….” It says you. Other than that your website looks awesome! I love that you decided to market your own affiliate company. I think thats a great idea and you will find success.

    • Peter

      Hello, David. Thanks for the ‘correction’ I have found and amended it so all is well thank you. Pleased you have enjoyed the post. I hope you get value from the eBook that is on its way to you asa personal thank you for leaving a comment. 🙂

  • Hi Peter!
    Thank you so much for this great information! I have been looking for ways to invest since I have recently come into a chunk of change. This may have moved to the top of my list.

    • Hello, Kellye Happy to help. It’s an interesting investment that for sure. I do have other posts that you may like to see and Thanks for your comments and please watch out for the eBook that is coming your way. 🙂

  • Marques Pizarro

    Amazing! Thank you for teaching me what cryptocurrency is. I have a hard time understanding what it is and you helped make it very clear.

    I have heard a lot about bitcoin and their successes, but I never knew the story behind it. Their story is very interesting and awesome! As a 16 year old, do you suggest I should take action and invest in cryptocurrency. Please leave me a response, thanks!

    • Peter

      Hello, Marques. In answer to your question. “Should I take action and invest in cryptocurrency? Absolutely! Cryptocurrencies could be a good way to protect yourself from the wealth-destroying policies of governments and central bankers. As digital currencies like, Bitcoin (for example), are not owned by any government or any bank and as they have a fixed supply, Politicians and bankers can’t inflate its value away or outright steal them. They are also easily moved, stored and traded. You also don’t have to buy a whole coin. You can buy a portion of a coin 0.0000001 for example.

      You can discover more about how to do this from my other posts How To Buy Bitcoin and What is Bitcoin About

      Thank you for your comments and I hope you enjoy the eBook that is coming your way. 🙂

  • Nate Kidd

    You make some great points about the Federal Reserve. I made a significant deposit to a bank in the Philippines lately and I encountered some of what you mention here.

    I have lots of friends who have recently gotten involved with cryptocurrenty and namely Bitcoin. It seems very interesting to me. I love the fact that is is not regulated by the Federal Reserve.

    I believe cryptocurrency is definitely the future. Thanks for sharing such great details.

  • Izuddin

    Hi Peter, thank you for you post.

    Allow me to add a 2 things to your content about the benefits of using cryptocurrency.

    Firstly, cryptocurrencies cannot be counterfeited, whether a person is using bitcoin, ethereum or ripple. And there’s no charge backs like in credit cards. Because, the platform mechanism just doesn’t allow reversed arbitrarily by the sender.

    Secondly, no possible of identity theft. The sender just sends on what the person wants to the recipient with no other information, unlike credit cards, where the sender is actually giving the merchant a full credit line, even for a small amount.

    Thank you again, Peter.

  • Oliver

    Hi thanks for sharing your thorough article, it is very interesting. I’ve long had my problems with the FIAT money system and have looked into buying gold in the past, but like you say, it is difficult to transport and store. Bitcoin does look like a good alternative and I appreciate you listing where you have bought it in the past. In light of rising national debt and China no longer wanting to back the petrodollar, do you think the western economy will collapse in the next few years?

    • Peter

      Hello, Oliver. I do think there is going to be an economic reckoning due to the Trillions of dollars that has been created by the central banks and the gross mismanagement of the economy by the governments of the world. Hence my faith in the future of a decentalized currency such as Bitcoin.  Enjoy the book that is coming your way I am sure you will find that interesting and informative as well. Thanks for your comments. 🙂

  • Cameron

    Peter,
    I found your article very helpful and informational. I have come across many times different articles suggesting that Bitcoin is a great investment.

    Having said that, I work in the finance and insurance industry and as a result I often hear the exact opposite and that Bitcoin is just another dead end.

    I’ve come to the conclusion after reading your article and many others, that it only makes sense they way that technology and innovation is going that Bitcoin is the next type of currency.

    I’m not familiar on where to buy bitcoin, but I have looked at your suggestions and am contemplating my first purchase. Do you have any other recommendations to compare to when purchasing bitcoin?

  • Rico

    I just saw that Bitcoin reached an all time high of about $5,900 and I had to find out what all of this commotion was about. I finally stumbled across your site and thank you, thank you, thank you ! Finally, a thorough, easy to understand breakdown of what crypto currency actually is and how it will affect us going forward. It is amazing to read your vast knowledge on the matter, Peter ! Thank you, very much ! I feel much better now talking about it’s effects on our economy.

    • Peter

      Hello, Rico.  Thanks for your comment.  If you enjoyed that post you may also like my latest post How To Buy Bitcoin that you can access here. It explains how you can buy Bitcoin and walks you through the process. Thanks again for your comments. 🙂

  • jacob

    I’ve heard so much about cryptocurrency but didn’t really have any idea about the benefits and how people use themm.

    After reading your article I know loads more than before and am intrigued to learn more.

    I also had no idea how much the government can find about your bank transactions that should be secure and private, kinda scary.

    Do you think the government will take measures to slow/eliminate cryptocurrencies in the near future.

    • Peter

      Hello, Jacob. Yes, I’m sure the banks and the government will try to  implement measures against cryptocurrencies. In fact China tried it a bannin Bitcoin a few weeks ago that inititally saw the price of Bitcoin fall and then once everyone realised that it’ a ‘decentralized currency’ and it doesn’t need any government support and the the government can’t actually stop it. The price raced back up and went to it’s highest level ever.  So I don’t think its going to be prevented from being a great store of wealth and a private source of money.  Thanks for your comments 🙂

  • Jeremy

    Very insightful page! All I can say is that you’ve opened my eyes and made me see that cryptocurrency is the way to go these days. Very informative and was very easy to understand what your message was, and I really enjoyed your video to entice people to sign up to your updates! Great job and keep up the great work!

    Cheers

  • Jerry Burns

    Thanks for this article.

    I have been looking into cryptocurrency and looking to learn more so that I can make some investments. I really apprectiate your information.

    Bitcoin seems very interesting to me. I wish I would of invested several years ago.

    I also heard that bitcoin has been declining, is this true?

    • Peter

      Hello, Jerry Thank you for your comments and yes Bitcoin has been declining and then rising rapidly again. So even though the price of a single bitcoin has exceeded the price of an ounce of gold. It has been very volatile and its price has fluctuated wildly, – adding to its appeal as speculative investment opportunity. That’s why its important to get an education about cryptocurrencies and not just rush in.  🙂

  • vick

    Hi, I enjoyed navigating your site. your site provides the visitor with a good deal of information on affiliate marketing and the scams to avoid. Your site is effectively organized and makes it easy for the site visitor to understand. I found the topic of Cryptocurrencies very interesting and I want to congratulate you on a well researched and written article. Also, I liked the images on your site and the pop up too!

    • Peter

      Hello, Vick I am pleased you have enjoyed my site and thank you for your comments. Please find an Ebook heading youe way as apersonal thank you for leaving a comment. 🙂

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