Cryptocurrency & ICO Primer

Essential Resources Behind the Hype

Cryptocurrency & ICO Primer: Essential Resources Behind the Hype

How This Primer Is Organized:

  • Bitcoin: The Original: Understand the spark that ignited the blockchain and cryptocurrency movement.
  • Ethereum: The Leading Alternative: After the development and “mass-adoption” of Bitcoin, other cryptocurrencies followed. These cryptocurrencies announced better systems, faster transactions, codability. All of these coins are deemed “alt-coins”, meaning any cryptocurrency that’s not Bitcoin. The most prominent of these alt-coins is Ethereum.
  • Researching a Coin: How do you find out more about a coin? How do you know if the coin is the real deal?
  • ICOs: The Basics of This New Wave of Crowd-based Funding: 2017 was the year of the ICO. Explore the crowd-funding mechanism and understand the risks and the rewards (and maybe deflate some of the hype.)
  • News Sources:  These are some of the sources that cover the day to day shifts within the technology. Everyone consumes news in a different way so resources represent diverse approaches.  Scan through the list and subscribe to a few to keep up to date on cutting edge advancements.
  • Getting Involved: There are countless ways to stay involved in the cryptocurrency community but it can be hard to find out where to start. Here are some events to check out.

Bitcoin: The Original

Now it’s time to at least touch upon the blockchain’s use as a means to exchange cryptocurrency. Now that you have an awareness of blockchain as a global, immutable, information storage technology rather than just a means for cryptocurrency exchange.

Here is the origin story of blockchain. The first blockchain invented was Bitcoin’s blockchain. The identity of the mastermind behind this amazing development is unknown, but the pseudonym used for the first Bitcoin documentation was “Satoshi Nakamoto”.

Satoshi, whomever they may be, wrote the first White Paper for any cryptocurrency, and here it is.

It’s unfathomable how much influence this one 10-page document has had on the world. For that reason, you should read it. It’s similar to reading the proofs of Einstein or Darwin, though much easier because the language is relatively colloquial.

How to learn the basics of Bitcoin

Now here is where you can learn everything you need to know about Bitcoin, and yes, it’s only one book, but this is truly the only source you will need. Read the first section of the introduction, then read about how Bitcoin works and then go on further if you’d like, the book goes from broad overview to a technical description over the course of 400 pages, but the only points that are essential for your understanding of cryptocurrency are the chapters previously referenced.

And talk about a glossary! This is also your in-depth reference if you are truly trying to “Master Bitcoin”. Otherwise it’s kind of a bit much for the average user.

If you’re more of a visual learner, use this video to supplement and generalize what this book will teach you.

This video is well done, but it’s a bit fast. Here’s a slower video.

Staying up to Date on Bitcoin

Bitcoin has an immense following of dedicated supporters who love to talk about anything Bitcoin related. Key forums include:

  • Reddit’s “BitcoinBeginners” Forum: This forum deals with questions and ideas posed by those who are new to Bitcoin and have similar conceptual issues or would just like to talk about how awesome Bitcoin is. A lot of the posts are about big things happening with cryptocurrency and are explained by long term cryptocurrency users.

And if reddit isn’t for you:

  • https://bitcointalk.org/: This is a great source to keep a heartbeat on what’s really going on. Its recommend to go to forums first to check what the crowd is thinking and then pivoting to find relevant articles. Many times, in the traditional media landscape, this dynamic is reversed, but with such a crowd-sourced and crowd-governed system you have to find your news in a different way.

Ethereum: The Leading Alternative

How can there be more to learn after this 400-page technical guide? Well, after the development and “mass-adoption” of Bitcoin, other cryptocurrencies followed. These cryptocurrencies announced better systems, faster transactions, codability. All of these coins are deemed “alt-coins”, meaning any cryptocurrency that’s not Bitcoin. The most prominent of these alt-coins is Ethereum.

Ethereum will be used as a way to transition from traditional blockchain into the exploration of different cryptocurrency models.

Look at the White Paper

The first step to learning about a new coin is to look at that coin’s White Paper. The contents vary from coin to coin, but they all will give an explanation of the coin directly from the developers rather than secondary sources. Typical, you can find the White Paper of any coin by just Googling it. Below you’ll find Ethereum’s White Paper.

Just as with Bitcoin’s White Paper, there are a lot of terms that are too technical in Ethereum’s White Paper for the average user, though the White Paper can be used to see the perspective of the developers.

When scrolling through Ethereum’s White Paper there are a few things that may stand out in contrast to Bitcoin. Some of these aspects include the creation of smart contracts, identity based addresses, and decentralized organizations / applications.

After looking at the White Paper to get a few key points about the coin and how it theoretically works, it’s time to do some research.

Researching a Coin

When researching a coin, the first place to go is always YouTube. This may seem strange, but there are many things one can gain through these videos. First off, they are quicker and more general than technical papers and always have some sort of visual representation that aids in the understand of new theoretical concepts. Take these videos on Ethereum for example.

The first video is your short overview of the coin, the second is Vitalik Buterin’s overview of Bitcoin, and the third is a more in-depth perspective of a user and investor.

These perspectives teach one a lot about the coin, its use cases, its following, and its value in the marketplace along with key differential advantages when compared to other coins (which in this case is Bitcoin).

Gaining Insight from Videos

This is not all that you can learn from YouTube. There are three things to make note of when using any video on YouTube for your source: Publisher, Views, and Comments, in that order.

If the publisher has a big following you should subscribe to them (if you like their content of course) because they are most likely an influencer in the cryptocurrency space.

The views of a particular video are also indicative of how important certain events are to that coin’s community.

Comments can be used after you’ve verified the legitimacy of the content in order to get a glimpse of the crowd’s reaction to certain developments. Even though comment sections can sometimes be wastelands, once in a while there are actually productive conversations that clarify misleading points. This is particularly true about cryptocurrency comments. The community wants to stay consistent so it is always correcting these flaws.

Here is a talk given by Andreas M. Antonopoulos (the author of Mastering Bitcoin) on Ethereum vs. Bitcoin. Also, recommend looking into the cryptocurrency events in your area. They are typically very informative and a great place to meet like-minded individuals.

It is astonishing how open these communities are to their new members.

Exploring Various Sources

It’s quite easy to find news sources on Ethereum because of its recent upturn in popularity. Some of the best sources include:

This website is a great source for an estimation of Ethereum’s exchange value but that’s not the reason this a solid website. If you scroll down to the section “Ethereum Price Updates” you’ll find about 40 articles all written by Nick Cannon. He publishes about once every two weeks and they are always very informative.

This site has a direct focus on Ethereum news and that most of their articles take less than a few minutes to read. They state the facts so you can update yourself without having to spend hours trying to be briefed.

The same logic as for exploring news sources for Bitcoin, applies to all other cryptocurrencies. It’s a bottom-up approach to news in which you’ll start with a forum and then research the topic directly.

Startups

On the Ethereum network there is a way for other users to create their own cryptocurrencies that runs on the Ethereum’s fabric. These ERC20 tokens are produced and disseminated to the public through something similar to an IPO (initial public offering). These coin creations are called ICOs (initial coin offerings) and they have their own subset of rules. In this next section, the discussion will move towards the format of an ICO and get into the financial aspects of all cryptocurrencies. For now, check out these companies that have joined as partners in the Enterprise Ethereum Alliance.

It’s interesting to periodically check in on this list to see it grow. Companies are investing in Ethereum at an ever-increasing rate because of the utility of the coin and its associated network.

General News Sources

You should also be aware of non-specific news sources that talk about cryptocurrency in general. These websites are very good to get a general gauge of the marketplace, though if you are trying to track a specific coin and its developments, stick with the tactics previously described.

  • https://www.coindesk.com/: This website has great articles and a great layout. Very easy to traverse, not many ads, all around a solid source for news.
  • https://cointelegraph.com/: The articles on coin telegraph are quite unique. Some of the article are “cat stuck in a tree”, click-bait articles which don’t really get to the source of larger developments. All considered, it’s an interesting website, it’s just something to be aware of.

Icos: A New Wave of Crowd Funding:

The Basics of “Equity-Based” Crowd Funding

In order to understand ICOs, it’s best to start with their original counterpart, IPOs. IPOs have been used to raise funds for corporations since the stock market first began. Here is a more in-depth guide of that processes and the inherent benefits and risks involved both on the company and investors side.

Once you have this baseline established and understand that an IPO is essentially the first offering of equity to the public, it is easier to understand why ICOs are so popular. ICOs don’t sacrifice a company’s equity and still raise millions over the course of months.

The Pros and Cons of ICOs

The crazy popularity of ICOs is unprecedented. Some markets have raised hundreds of millions of dollars in the course of only a few weeks with relatively low start up costs. It’s amazing that these numbers are not unique, multiple ICOs have broken the 100 million mark and some even the 200 million mark.

After an ICO occurs, participants assume that the coins which they purchased during the ICO will appreciate in value based upon traditional principles of supply and demand. The better a product is, the more people will want the coin and the higher the price will soar as investors cash out on exponential returns. Though, one must be aware of the intrinsic risks of ICOs for both investors and companies.

After all things are considered it’s imperative that you weigh the pros and the cons. This article is a good source while talks about both sides of ICOs, regulation vs reward.

How to Stay Informed

Typically, if an ICO is good enough to invest in it will find you. The top ICOs are typically talked about on all of the forums and news sources previously listed because those audiences are also on the lookout for startups to invest in. Keeping that in mind, one should also realize that typically ICOs will have bonuses for earlier participants so if you are one who likes a good discount you’ll have to do some leg work in order to stay in the loop.

Luckily, due to popular demand, there have been websites created to track all upcoming ICOs in the cryptosphere. One of the most trusted and useful websites is listed below. The website is sleek and easy to traverse with clocks next to each ICO link.

After learning briefly about which ICOs interest you, you can then check out the link below to find out the popularity and financial probability associated with investment. This is a quick way to check if an ICO is a scam or actually has potential. If the coin happens to have been fully reviewed, this website will give you an in depth 10-page analysis of the coin’s strengths and weaknesses.

The last source you should be aware of in order to stay up to date on the progress of a coin is the actual exchange value. Coin Market Cap is where many investors go to get the full picture of a token. The site provides the price, where the token is trading, who is tweeting about the token, and further in-depth analysis on all aspects of the coin’s success.

2017’s Winners

It’s not too difficult to see that nearly every ICO this year has been a winner in their own respect. As the pioneers in a new funding space, they’ve been rewarded by venture capitalists who have been trying to diversify their portfolios. Though some ICOs have surpassed what anyone would had thought they could. Here are some of the most successful ICOs of 2017.

  • https://filecoin.io/: Filecoin raised a record breaking $257 million dollars through its ICO in August after releasing its White Paper which describes how Hard Drive space can be shared across the blockchain. Advocates say that this technology has the ability to rival the cloud storage technology of Google and Amazon at a lower price point.
  • https://www.tezos.com/: Tezos raised an astonishing $232 million dollars in less than a month. This token provides a solution to hard forks in a network based upon a modular fabric design. This means that the longevity of certain protocol is never in question and the system can have worry-free self-governance.
  • https://eos.io/: EOS raised an amazing $185 million dollars over the course of 5 days. This platform is comparable to Ethereum with the advantage of transactions that can be programmed through smart contracts, but there is so much more to EOS.

Getting Involved

There are countless ways to stay involved in the cryptocurrency community, though with ICOs it’s a little different because the communities are very new and may be close to non-existent. If you are interested in a specific coin, first check reddit to see if there is a forum for the coin. If not just keep updated on the developments and as the community grows there will be more opportunities for you to be involved.

Additionally, if you’d like to meet up with the developers of these new tokens and find others who are also excited about the current developments, check out the yearly token summit. This event draws speakers from around the world to talk about their work with cryptocurrency.

While on the subject, here are some other big cryptocurrency conferences you may want to check out:

Due to the infrequent nature of ICOs it is difficult to find a reliable source which has a community based approach to ICO valuation, though one YouTuber seems to have hit it right on the mark with his channel “Hacking the System”.

HowDo can help you bring new tech into your innovation strategy. We can help you navigate the noise to discover what really matters to your business.
Contact Us
2018-12-12T18:20:23+00:00

Leave A Comment