Over the weekend, I built a digital currency, for no good reason.
My coin, let’s call it JoeCoin, isn’t available to you common folk, there’s no ICO on the horizon, and later today or tomorrow I’ll be wiping out the whole JoeCoin economy with a single keystroke.
I created a currency as the culmination of about three months of rabbit-hole research into and experimentation with blockchain. Everyone has their opinions on blockchain and Bitcoin and other cryptocurrencies, and those opinions are strong. I’ve learned over the years that the only way to find the truth about a thing is to take the thing apart and figure out how it works.
I’m old enough to remember Flooz and Beenz from the dot-bomb era, but not old enough to remember much about those digital scrips other than one of them had Whoopi Goldberg pitching for it. Oh, and they were both massive and expensive failures.
I’ve also been a part of the artificial intelligence community for the last seven years. I’ve seen “AI” sold as a black box too many times, much like people were selling “Internet” as a black box during that same aforementioned dot-bomb era, and we know how that turned out.
So in 2018, what better examples of “blockchain” being sold as a black box than unknown iced tea companies and long-forgotten film companies inflating their perceived value by adding the term “blockchain” to their strategy, or just their name.
These are dangerous times, friend. Tread cautiously.
But I’ve been fascinated with the application of blockchain technology for a long time now, and I’m starting to believe in the intrinsic value of cryptocurrency. I’m not one of those stodgy folks saying “Bitcoin has no use, but blockchain is the future.” I’ve discovered that thinking betrays a lack of understanding.
So last night, a few of my friends and I were gathered around a table, maybe a coffee shop, maybe a bar, it’s not important. The subject of blockchain and crypto came up and the interest level shot through the roof but it was soon obvious that two of us had a grip on the basics, and two of us did not.
These are very smart people, so I told the two who were noobs to blockchain (they have general knowledge of the major coin run-up over the last few months and they know what blockchain is) that I’d put together a list of links for them.
Then I thought: Oh, blog post.
So this is by no means an authoritative explanation of blockchain and crypto. I’m sure everything I show you here is rife with “but”s and “except”s. I’m imagining you can take this and springboard off it to do your own research. I’d suggest 10,000 hours but you can probably get by with 40.
Let’s start by getting the currency stuff out of the way.
- The first place you should probably go is this page on investing.com that lists all the coins and their activity. This is the same kind of information you’d find on an exchange, only this site is one I’ve found that tracks most or all of them without signing up. And look, we’re adults here, right? I don’t have to tell you not to play around with this stuff until you 100% know what you’re doing. I’ve traded coin in small amounts to get a sense of the mechanics and the psychology. I also invest in and trade stocks on a pretty regular basis. In some ways coin trading is similar but in other more important ways it’s apples and oranges.
- Before you learn about transacting coin, you should familiarize yourself with storage, to get a sense of how vapor this stuff can really be. This article on Blockgeeks is a very good overview of all kinds of wallets, from mobile apps to sheets of paper. Basically the more accessible the wallet, the less time you should have anything stored in it.
- The next place to go is the starting point for transacting. Coinbase is probably something you’ve already heard of, so sign up. You’ll feel like a player, and it’s perfectly safe. You can even transfer some money if it’ll help you get over your FOMO. Transferring money from your bank account takes 4–5 days. You can allegedly buy crypto with a credit card but for one, that’s a terrible idea, and for two, none of the credit cards I own will let me interact with Coinbase.
- Coinbase is where you would buy your base coin, Bitcoin or Ethereum, to then take to an exchange to convert to an altcoin. Don’t do that yet. Maybe ever. But mostly yet. To see how this works, here’s a play-by-play of going from cash to Coinbase to an exchange to a wallet and back from a site called GetCrypto.
- Now let’s discuss blockchain, a relatively simple technology in theory that can get really complex in practice. There’s no good way to give you this news: If you want to figure out blockchain, you’re going to have to do some slow reading, the kind that’s going to require you to click and learn a lot of terms. Break it down into multiple parts. Transactions go into blocks, blocks get mined and added to chains, chains are connected and can fork, a network of nodes does the mining and each one stores the current chain. The first place I’d stop is BlockGeeks again, for an article called What is Blockchain Technology, which gives you a high-to-mid-level overview of structure and use-cases.
- Then if you really want to understand the transactional nature of blockchain as it relates to cryptocurrency, the best way to do this is the developer’s guide on bitcoin.org. Don’t be intimidated by this article, it’s really not a bad read, just a long read, and one that’s going to require you to click and learn even more terms. But if you slog through at least the “Blockchain” section, you’ll know enough to be able to talk the talk.
- Finally, if you’re more of a doer than a follower, I had a really good time implementing this python-based tutorial from Daniel van Flymen in Hackernoon, that walks you through building a very basic blockchain on your local machine. I have a solid tech background, and even though I’m kind of a python novice, I was able to do this tutorial, expand on it, and rewrite and push my code up to AWS. If you’re not technical, read this anyway, skip over the python parts and understand why he’s coding what he’s coding.
I know I haven’t changed your world, but hopefully I’ve saved you from a few dozen Google searches and a lot of misinformation. Any new technology has its hazards, but this one in particular can be painful when you make mistakes.
And if you’re not making mistakes, you’re not doing it right.