Crypto Currency Investing Chapter 3 Summary: The Third Wave

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If you think you’re too late to invest in crypto, you’re wrong!

So far we have only been through two waves of the rise of crypto. In 2022 we entered the third, and there are more to come.

People have been trying to develop a digital currency since the 1980s, but it wasn't until after the 2008 financial crash that Satoshi Nakamoto published the paper “Bitcoin: A Peer-to-Peer Electronic Cash System.”

The release of this paper marks the beginning of phase one, which was the rise of Bitcoin.

As Bitcoin became popular, people started seeing the flaws.

One man, Vitalik Buterin, understood that one of the biggest flaws was that Bitcoin was best as a store of value and didn’t have much other utility.

But he saw the huge potential in blockchain technology and out of that he created Ethereum.

Ethereum allows developers to build apps on top of the blockchain, much like how software runs on a computer. Thanks to the secure nature of the blockchain, these applications can store and transfer personal data as well as help facilitate financial transactions.

Ethereum is a block chain network that developers can create apps on top of.

Since the blockchain is decentralized, when a developer builds something on the blockchain, they have complete control over the data. That means you can store sensitive data without using a third party such as Amazon or Google.

Ether is a cryptocurrency, similar to bitcoin, which is built on the ethereum blockchain.

Smart contracts are self-executing contracts with the terms of the agreement directly written into lines of code.

These contracts are automatically executed provided the conditions in the contract are met, and the compensation is paid in Ether.

Some popular use cases for this are:

• Multisignature accounts, which would only allow funds to be transferred once everyone involved has digitally signed.
• Storage of sensitive information, such as membership details.
• Encoding financial agreements.

Even if most people don’t understand how crypto works, they have certainly heard about it.

Many people invest in and make purchases using cryptocurrencies.

But crypto is getting used for much more than that.

One huge area it is being used in is on cloud computing and the creation of Web 3.0. In this third generation of the internet, websites and apps can process information in a human-like way, such as AI, and thanks to blockchain it can all be done in a decentralized manner.

Cryptocurrencies allow people to make financial transactions outside the traditional banking system.

One popular use case that has come of this is crypto lending. When someone wants to borrow crypto there is no credit check. Instead, they are asset-backed loans that require you to pledge cryptocurrencies..

This allows borrowers to access additional funds while still retaining ownership of their underlying assets, i.e., the crypto they own.

Many game creators are now using blockchain technology in their games which is generating a lot of financial benefits.

For example, Axie Infinity is a game that allows players to collect, breed, raise, battle, and trade creatures called “Axies,” which are NFTs that can be bought and sold.

Read the next chapter here.

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