I started writing a book for teenagers or people who are not yet familiar with cryptocurrency. In this book, I will try to explain how it all works with simple examples and dialogues between friends.
Introduction
Have you ever imagined making your fortune without leaving your couch? It sounds like a Hollywood movie plot, but for many teenagers it’s already a reality. Stories about young millionaires who got rich on cryptocurrencies are inspiring and enticing. But is it really that easy to hit the jackpot in the world of digital money?
Let's figure out what cryptocurrency is, how it works, and what myths surround this world. You'll learn that getting rich quickly is more of an exception than a rule, and that knowledge, patience, and a well-thought-out strategy are needed for success in crypto investing.
Chapter 1. Hello, crypto world!
Jim sat, glued to his smartphone screen, his eyes shining with genuine interest. He scrolled through the news feed where headlines about millionaires who got rich from cryptocurrencies flashed. His heart raced, and thoughts swirled in his head about how he could change his life too.
– Hey, Jim, why are you so excited? – asked his best friend, Mark, peeking into the room.
– I'm just reading about crypto, – Jim replied, not taking his eyes off the screen. – Can you imagine how much money is swirling around?
– Yeah, I heard that too. My cousin bought some bitcoins a few years ago, and now he's driving a Ferrari, – Mark said dreamily.
– Well, I don't want a Ferrari; I would settle for a new iPhone and cool sneakers, – Jim admitted. – And also a cool graphics card to stream games.
– What, do you also want to invest in crypto? – Mark was surprised. – What if you lose everything?
– Well, what if it isn't? – Jim countered. – Everyone says this is the future of finance.
Jim decided he wouldn't procrastinate any longer. He opened his bank account, which had the $500 gifted for his birthday, and started looking for information on how to buy his first cryptocurrency. He had heard many positive reviews about the Binance exchange, but more on that later...
What is cryptocurrency and how does it work?
Jim quickly realized that the world of cryptocurrencies is something entirely new and unusual. These are digital currencies that are not issued by central banks, but are created using complex mathematical algorithms.
Imagine that money is not just paper or coins, but numbers in a computer. And these numbers are not stored in a bank, but in a huge book that cannot be forged. This book is called the blockchain.
Each entry in this book is like a check, only digital. And when you send someone cryptocurrency, that entry is added to the end of the book.
Each page in this book is a block. Each block records some actions, for example, who transferred money to whom. And all these blocks are linked together like links in a chain. That's why it's called blockchain.
And now the coolest part:
• No one can forge records: If someone wants to change something in one block, they will have to change all subsequent blocks. And this is almost impossible because it requires hacking many computers around the world.
• Everything is transparent: Everyone can see what's happening in the blockchain. It's like a public registry, only digital.
• Decentralization: No one controls the blockchain. It operates by itself, thanks to thousands of computers that support it.
How does it work with cryptocurrency?
When you send someone cryptocurrency, that information is recorded in a new block. This block is added to the chain, and everyone can see that you made a transfer. And this happens with every transaction.
And for new entries to appear in this book, special computers called miners are needed. They solve complex mathematical problems, and in return, they receive rewards in the form of cryptocurrency. It's like mining gold, only instead of a pickaxe, you have a powerful computer.
Why are they so important?
• Freedom from banks: Imagine that you don't need a bank to send money to a friend on the other side of the world. Just a couple of clicks and done!
• Fast and reliable: Transfers happen almost instantly, and no one can cancel them. Your money is safe because no one can just steal it.
• Transparency: All transactions are recorded in the blockchain, and anyone can verify them. Therefore, you always know what's happening with your money.
• New opportunities: Cryptocurrencies open doors for new technologies, such as smart contracts. These are programs that automatically execute the terms of a contract. For example, if you buy something online, the money will automatically be transferred to the seller as soon as you receive the item. Blockchain can be used not just for cryptocurrencies, but for many other things, like voting or storing medical data.
• No one can deceive you: Your money is always under your control, and no one can just take it away.
• Fast transfers: Money can be sent anywhere in the world in a couple of minutes.
• No borders: It doesn't matter where you are – in Russia, the USA, or on Mars (well, for now you can't do it on Mars), you can use cryptocurrency.
But there are also downsides:
• The price fluctuates: The price of cryptocurrencies can change significantly in a day. Today you're a millionaire, and tomorrow you're not.
• Not all understand: Not all stores accept cryptocurrency payments, so for now, it's not quite ordinary money.
• Risk of losing everything: If you're not careful, you could lose your money due to hackers or other problems.
In short, cryptocurrency is the future of money. But it wasn't always like this...
Long ago, when people walked around with clubs and hunted mammoths, shells served as money. Yes, just ordinary shells! Can you imagine bringing a handful of shells to a hunter, and he gives you a mammoth skin?
Then people realized that carrying a bunch of shells around was inconvenient and invented metal coins. Gold and silver were considered cool. But there were problems here too. Imagine weighing these coins every time to understand how much they were worth.
Then came paper money. That was something! No need to carry heavy bags of coins. But there was a catch here too. They could just print more of them, and then they would be worthless.
And then Bitcoin enters the scene. It's like digital gold, only its supply is limited. And most importantly, it's not controlled by banks, but by everyone together.
In short, the journey from shells to Bitcoin is a cool story about how people sought increasingly convenient and reliable ways to exchange value. And Bitcoin is probably the biggest breakthrough in this story.
Cryptocurrencies are not just money; they are a new financial system that gives us more freedom and opportunities.
