top of page

Intro Guide to Crypto - Episode 3: Crypto Basics


Intro Guide to Crypto - Episode 3: Crypto Basics

What are cryptocurrencies?


The most comparable technological innovation is the internet.


Before the internet we transferred information by use of pigeons, then electronic telegrams using morse code, then we started using the ‘internet protocol’ which allowed us to transfer information with the click of an email.


But did that mean we could transfer value as efficiently as sending an email?


  • To transfer money internationally using the traditional finance system it is quicker to put the money in a briefcase on a plane and fly it over there.

  • Cryptocurrencies aim to solve this issue; due to the advanced technology they use – the blockchain.


What is the evolution of cryptocurrencies, and how did it all start?


The first cryptocurrency to be created was Bitcoin. The following is a brief history of Bitcoin/crypto:


  • 2008

    • 18th August - the domain name Bitcoin.org (owned by Satoshi Nakamoto and Martti Malmi) was registered.

    • In order to spread responsibility and prevent any one individual from gaining control of the Bitcoin project, Satoshi gave ownership of the domain to additional people, separate from the Bitcoin developers.

    • 15th September - Lehman Brothers filed for Chapter 11 Bankruptcy protection. This has triggered a lack of trust towards the banking system, as it remains the largest bankruptcy filing in U.S. history.

    • 31st October - Satoshi Nakamoto published the Bitcoin whitepaper, a document released by developers that explains the technology and purpose of the project they are working on. This first introduced the foundation of Bitcoin and blockchains.

    • 9th November - Bitcoin Project registered at sourceforge.net

  • 2009

    • 3rd January - a headline from The Times, was quoted by Satoshi Nakamoto in the genesis (first) block on the Bitcoin blockchain, Satoshi Nakamoto quoted a headline from The Times: “Chancellor on Brink of Second Bailout for Banks.” This suggested that the Bitcoin project was started in response to woes in the financial system.

    • 3rd January - the genesis block, the first block of the Bitcoin network, is mined (created).

  • 2015

    • July 30th - Ethereum, the first smart-contracts platform, launched. This was significant as the utility of smart contracts has resulted in a wide range of use cases, including (but not limited to) Decentralised Finance, NFTs and metaverse applications.

  • 2018

    • 26th November – Ohio accepts tax payments converted from Bitcoin via BitPay, becoming the first U.S. state to do so.

  • 2021

    • 7th September - El Salvador become the first nation to adopt Bitcoin as legal tender alongside US Dollars, as their central bank also decides to accumulate Bitcoin.

  • 2022

    • 11th August - BlackRock, the world’s largest asset manager, offers Bitcoin to its retail clients via its Aladdin platform.


Why do cryptocurrencies have value?


  • The value of a cryptocurrency depends on the value of the blockchain network that it operates on.

    • In order to use a blockchain platform, or operate within a blockchain-based community, you typically have to pay for operations with the network’s native token.

    • This can be compared to the way in which we use oil in every-day life in order to fuel our real-world economy, hence meaning that oil is very valuable.

    • Therefore, the more valuable a digital network is, the more valuable the native cryptocurrency for that network is.


  • Cryptocurrencies allow you to own a part of the network.

    • Before cryptocurrencies were born, the internet held the title for the fastest growing adoption of a new technology during its early years (1990s).

    • Cryptocurrencies have grown at around double the speed of adoption growth relative to the growth of the internet.


  • The chart below from GMI (Global Macro Investor) compares the growth of internet users to the growth of crypto users after both innovations reached 5 million users. (Crypto.com – World Bank – Global Macro Investor, March 2022)

    • You can see that crypto has been growing at almost double the rate at which the internet grew over the first 5 years.

    • If crypto growth slows to match the internet’s growth rate from year 6 – year 10, then the crypto industry will increase from 295 million users to 1.2 billion by 2026.

crypto users vs internet users yearly growth

During the time of internet’s early years of rapid growth, investors were unable to invest in the most profitable internet networks themselves. Some were able to invest in shares in the likes of Meta (Facebook) and Google early on, but this was mainly accredited investors.

  • The difference with cryptocurrencies is that you are able to own a part of the actual network, and therefore potentially profit incredibly.

  • This provides an incredible opportunity for those with small amounts of capital, but who are willing and determined to put the work in to find the next Facebooks and Googles, and therefore benefit financially.


If you would like to learn more about cryptocurrency, feel free to contact us. GlobalBlock aim to provide guidance and education throughout your crypto investment journey.


Get started today! You can sign up now by clicking here.


Register and trade today to be one of 50 people per month who will receive £50 of Bitcoin in their account!

Comentários


GB_CC_May_Digital Asset Trading_Whiteout
  • LinkedIn
  • Twitter
  • Facebook
  • Instagram
  • YouTube
  • telegram logo

GlobalBlock EU ApS is a company incorporated and registered in accordance with the applicable laws of the Kingdom of Denmark as virtual asset service provider, with registration number (CVR-number) 45126382. GlobalBlock EU ApS is wholly owned by GlobalBlock Ltd., a company registered in England and Wales with registration number 09450626. GlobalBlock EU ApS is not a licensed financial services provider and is not supervised as such by the Danish Financial Supervisory Authority. GlobalBlock EU ApS is supervised with respect to anti money laundering by the Danish Financial Supervisory Authority within the scope of the Danish Act on Prevention of Money Laundering and Terrorist Financing and other legislation stemming thereof.

.
GlobalBlock Europe, UAB is a company incorporated and registered in accordance with the applicable laws of the Republic of Lithuania as a virtual currency depository wallet operator and virtual currency exchange operator, with registration number 306045642. GlobalBlock Europe, UAB is wholly owned by GlobalBlock Ltd., a company registered in England and Wales with registration number 09450626,  GlobalBlock Europe, UAB is not a licensed financial services provider and is not supervised by the Bank of Lithuania. GlobalBlock Europe, UAB is supervised by the Financial Crime Investigation Service under the Ministry of Interior of the Republic of Lithuania within the scope of the Law on Prevention of Money Laundering and Terrorist Financing of the Republic of Lithuania and other legislation stemming thereof.
 
Investors should be aware that cryptocurrencies are volatile investment instruments that carry a high degree of risk to the capital investment. The information in this website is not intended and should not be construed as an offer, solicitation or recommendation to buy or sell any specific investments or participate in any specific investment (or other) strategy. The products and services outlined on this website may not be suitable for all types of investors. The value of an investment can go down as well as up, and you may not get back the amount you originally invested. You should not invest more than you can afford to lose and should ensure that you fully understand the risks involved. Before trading, please take into consideration your level of experience, investment objectives, and seek independent financial advice if necessary. It is your responsibility to ascertain whether you are permitted to use the services of GlobalBlock Europe, UAB based on the legal requirements in your country of residence. The information in this website is for information purposes only and is subject to change. No part of this website can be reproduced without written permission.


 Client fiat is held with GlobalBlock in accounts with BCB Limited,and does not meet the definition of Electronic Money (e-money). Client fiat and cryptocurrency are not “safeguarded” nor covered by any compensation scheme. Clients could potentially lose their cryptocurrency or fiat if something were to happen to GlobalBlock or, BCB.

Cryptoasset Notice

Cryptoasset services are provided by GlobalBlock Europe, UAB (“GlobalBlock”).   Cryptoassets are not regulated in any jurisdiction and the value of your assets can increase or decrease. You should note that your cryptoasset profits may be subject to Capital Gains Tax.

The service you obtain through the website or the app in the UK, contains cryptoasrvices not regulated by the Financial Conduct Authority. Please be aware that:

  • You will have no recourse to the Financial Ombudsman Service in the event of a complaint relating to cryptoasset services.

  • Your cryptoasset account is not protected by the Financial Services Compensation Scheme.

  • Cryptoassets may experience frequent price volatility resulting in a high degree of risk.

bottom of page