Cryptocurrency for Beginners | Mind Favor | Skillshare

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Cryptocurrency for Beginners

teacher avatar Mind Favor

Watch this class and thousands more

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Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Watch this class and thousands more

Get unlimited access to every class
Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Lessons in This Class

9 Lessons (21m)
    • 1. Introduction

      0:47
    • 2. What is cryptocurrency?

      3:06
    • 3. Why people care?

      4:17
    • 4. Investing

      1:29
    • 5. Possible concerns

      3:03
    • 6. Bitcoin

      3:29
    • 7. Ethereum

      2:19
    • 8. Altcoins

      1:02
    • 9. Final thoughts

      0:59
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About This Class

Cryptocurrency is a new exciting space that can be very confusing. In this course, we explain to you the basics of what cryptocurrency is and explore a couple of the more popular cryptocurrencies such as Bitcoin and Ethereum. We will also cover some of the possible concerns related to cryptocurrencies so you can make an informed decision about this space. This course is designed to provide a high level overview of Bitcoin, Ethereum and cryptocurrencies. We don't go super in depth about the technical details and the goal is to keep everything high level. 

Note: Nothing within this course constitutes (or should be construed as being) investment, legal, tax or other advice.The information in this course is not a personal recommendation and does not consider the investment objectives, financial situation or other needs of any specific viewer.  This course is solely for informational purposes

This course should not be used as the basis for any investment decision(s) which a viewer may be considering. Any potential investor in digital assets, even if experienced and affluent, is strongly recommended to seek independent financial advice upon the merits of the same in the context of their own unique circumstances.

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Mind Favor

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MindFavor is dedicated to teaching you skills that will help you thrive and succeed in the 21st century. Most of the information taught in the current school system is outdated and irrelevant to how daily life really is. Our mission is to empower you with the RIGHT information to help you live your best life. 

 

And if you're looking to get started with 2 FREE months of Skillshare Premium, use this link to take advantage of this offer now: https://www.skillshare.com/r/user/mindfavor

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Transcripts

1. Introduction: Cryptocurrency, you've most likely heard of it and it's been exploded in popularity over these past couple years. How many Steven, I'm a content creator and instructor here on Skillshare to now over 2000 students. You've most likely heard of cryptocurrency over these past couple of years. And a lot of it can be really exciting, but also overwhelming. So that's the reason why I created this course here is to break down fundamentals and basics of cryptocurrency, bitcoin, this whole space, and explain it in a way that actually makes sense. So you better understand really what's going on here, why it's so important. By the end of this course, you'll walk away with better certainty and clarity about what this whole space is. And more importantly, what you can do to possibly take advantage of this. I'm super excited. You've decided to stop by and let's go ahead and get started. 2. What is cryptocurrency?: Before you get into the course, one disclaimer, everything that I'm talking about here is not financial advice. I'm not a financial advisor and I'm simply just explaining concepts to you. Please don't take or construe any of what we're talking about to be financial advice as the stuff we're talking about is extremely risky and speculative. One other disclaimer two is throughout this course, like I said, my, my main goal is to explain it in a way that the average everyday person can understand. So when it comes to explaining some of the more technical sides of this whole process and may not be explaining it in the most precise way. If you're looking for the most precise, accurate explanation of some of the technical side, this whole space, I would strongly encourage you to check out another course as there's plenty of other great folks and resources. The first obvious question is, what is cryptocurrency? And there's a couple of ways I kinda want to explain it. The first thing is when you hear that term cryptocurrency, you could think of that as just a general term that refers to many different types of digital currencies. So for example, Bitcoin, Ethereum, Cardano, SRP. These are all examples of a cryptocurrency similar to the word money, how that's just a general term. But then we could refer to dollar bills, coins, credit cards, all those other things could go under category of money. That's the first way to sort of think about it, is cryptocurrency is just a general term that could refer to many different types of digital currencies. The second aspect of that is a cryptocurrency is exchanged in a decentralized manner. And we take a step back and explain what that means. Let's think right now how most transactions work in the everyday world. Let's say you go to Target and you want to buy some stuff, you're going to use your Bank of America credit card. So when it comes to actually processing that transaction, that whole record of what occurred is centralized because the only parties I know about this is you target in Bank of America. Let's compare that to an example of a decentralized transaction. Let's say you own some Bitcoin and you go to a website and you want to buy some product that you spend the big line and you get the product, your transaction that you're making. It's recorded on something called the block chain. It's a public record of the transaction that you made. So anybody can view this decentralized network. The main concept right in these two examples is the one example when you went to Target and bought something, the only people who know about what occurred was, you know, you target and Bank of America compared to this other example where because the transaction occurred on the blockchain, that is public information and any and everybody can verify that you in fact made that transaction. It's kind of a heavy topic to start the whole core software. That is the basic concept of the block chain. And really what makes cryptocurrency very different from the way our current financial system and the way we exchange money works right now that might not seem like it's that big of a deal, or why would somebody really care? But in the next lessons we're going to go more in detail about why people care about this type of stuff. And more importantly, how this will change the world as we move forward. 3. Why people care?: Before we get more into the technical side of things, I think it's important for us to take a step back, understand some of the motivations that's driving so many people's interests into cryptocurrency in Bitcoin and all that. One of the first main reasons why so many people are interested in cryptocurrency, bitcoin, this whole space is the advancement of technology. And what that's going to allow our future world to look like. If you could think back to what the world was like before the Internet and then taking a look at all the possibilities we now have in our daily life, simply because of the internet or simply because of smartphones. This next wave of technological development is extremely encouraging and exciting for many people. So for one that's driving a lot of really smart folks into the space to develop technology. Just one really small example of this would be there's a cryptocurrency out there right now or a project working where imagine, let's say you don't use all of your electricity every single month, and let's say you generate extra electricity. Imagine having the ability to take any extra electricity you've generated and then selling that back to the electric company or the power grid. Basically being able to make money every single month by selling back extra electricity that you didn't use or you conserved. So that's just one example of many countless projects that are currently being worked on right now to help make our whole world much more efficient and better for everybody. This second big reason is people's growing desire for privacy in retaining their freedom, many people have developed a strong distaste and distrust for not only their governments, but large corporations. For example, the 2008 financial crisis, seeing how it was really the government in hand with the, these large financial institutions that really drove the financial crisis. And then the banks were too big to fail and the government basically bailed these big companies out. I think that bigger than really changed the perception in a lot of that trust and the way that the average person views governments and large corporations in recent years, there's also been big concerns about companies using your data and selling your data without your permission or make money off your data. So there's lots of different factors that probably too complicated to go all the way in depth about. But the main idea is, as time has gone on, people in general have become less and less patient with governments, less trusting of them and big corporations and people want the ability to have more control over their data, how they choose to share it, and they also want to have more privacy for themselves. Another big factor for many people moving into the cryptocurrency space is changing demographics and also changing risk appetite. Right now, many millennials and Gen Z folks are starting to move more so into their professional career. They have more disposable income. And so there are the next generation That's starting to really make investments, at least in the United States. There's also fears and worries about whether Social Security or pensions or a lot of this stuff that's promised by the government and big companies. Whether that's actually going to be around when we get to retirement, write as many things could change between now and then. These are some of the concepts that are in the back of the mind of many of the younger folks who are coming up and moving into this whole investment landscape. One other thing to be mindful of when it comes to cryptocurrency is much more volatile, which means it could go up much more, ward go down much more. It's basically much riskier than a lot of other traditional investments like stocks or bonds. So for example, if somebody were able to get a 6% return on their investment in the stock market, that's generally considered a pretty successful investment. So we take 6 percent compared to some cryptocurrencies where it's possible to get a 80 percent return within a week. Although the 80 percent is, you could also go down 80 percent. The possibility of being able to make 80% in a week or a month compared to just 5% in a year, seems much more appealing to some of the younger folks. That's another thing to keep in the back your mind is the changing risk appetite. And many younger kids who are starting to invest nowadays have a much stronger tolerance for risk. 4. Investing: Another way for us to think about cryptocurrency in general, which is a digital currency. It's also kind of like a stock, and it's also part technology. When we're talking about cryptocurrencies, one of the more common aspects that you're gonna see people talking about is the actual price. A lot of that conversation around the price of what these different cryptocurrencies are is going to be one of the more common things that you'll hear and come across in the news. So it's similar to stocks in that sense, right? Because stocks can go up or down, they can move, they move around in price. There were heavily influenced by the news and how much interested public has in binding and all of those concepts that go into buying stocks. What drives the price of stocks up or down? That all applies to cryptocurrency as well. One other concept when it comes to cryptocurrencies, since it is so new is a lot of the price is very speculative. Many people, to just be frank, at least right now, really buying clients based on how well they think the project is going to do. That's not just say everybody isn't, because there certainly is a good portion of people who are. But at the same time, there's also lots of people buying coins simply because they're trying to make a quick buck and they think this coin is going to go up. And that kind of leads into the next section which we're going to talk about, which is some of the possible downsides of cryptocurrency. To make any educated decision, you have to take a look at both the pros and the cons. That's what we're gonna do in the next section is break down some of those possible concerns. So that way you're being careful when taking a look into this space. 5. Possible concerns: There's definitely been some big concerns about cryptocurrency. I think one of the more common one you've probably heard of or maybe your first thought when somebody says cryptocurrency is, you know, isn't that the thing that criminals use to that I would say, yeah, it's true. Some criminals do use Bitcoin because it's harder to be traced, but at the same time, criminals also use cash. So does that mean we should eliminate all cash? Because criminology, is it? No. So I don't think that, in my opinion, isn't a valid argument for AS not using big Weiner us completely dismissing this whole space simply because some criminals use it, right? Criminals are gonna do whatever they want to do. Now, one valid concern when it does come to cryptocurrencies in general, is much easier to lose your money if you don't know what you're doing, whenever you buy a cryptocurrency like Bitcoin, It's store, the actual bitcoin remains on the network, but nobody can actually access your funds unless they have this specific key to unlock it. So you can think of your money being in a lockbox on this network and you're the only person who owns the keys to access it. And your keys are stored in something called a wallet. If you're not careful, it is possible for somebody to basically hack your system and gain access to your keys and steal your, your cryptocurrency. And if that's the case, there's really nothing that you can do and you're just kind of out of luck. There's definitely ways that you can protect yourself to ensure that that doesn't happen. But especially if you're a beginner or you're first getting started or you're not exactly sure of what you're doing, that is a valid concern and risk and this whole space. Another concern related to that is if we think about other transactions right now, right? So let's say somebody steals your credit card, they rack up a ton of transactions. What do you do? Well, there's protections in place right now. We can just call your bank to speak those transactions and then you'll be reimbursed. When it comes to something like cryptocurrency, that mechanism doesn't exist. So if you go to a website and you want to pay for something with cryptocurrency and then that website doesn't deliver what they were supposed to. You're kind of out of luck and there's nothing you can do to get your Bitcoin back like you could in a credit card situation, another possible concern is governments cracking down on this and deciding to ban it in general, right? It's important in the government wants to have control of the money supply. They want to have control of how the whole economy works, right? So if something sort of comes up out of nowhere, and it could be essentially competing with the economy or create some type of ecosystem that the government doesn't like. It's very possible that the government one day just makes it illegal to own Bitcoin or any type of cryptocurrency. The fourth possible drawback is since this whole space is pretty new, the government has been playing catch-up trying to better understand how they want to tax this. But in my experience, I've found that the actual calculation of taxes for something like cryptocurrency is much more complex than something just like stocks or other regular income. It was much more complicated than I would have anticipated it to be. 6. Bitcoin: The next thing we're going to talk about is a couple of the more popular cryptocurrencies out there. And these are ones that you've most likely heard of or you will hear of in the news. The first and most popular one for sure is something called Bitcoin. And this was started in 2009, but as I'm currently filming this in 2021, it's pretty widely accepted that Bitcoin is looked similar to like digital gold. We take a step back and think throughout history for thousands of years, gold and silver were some of primary stores of wealth, if you will infer, most of the United States history are US dollars. They were backed by gold. And when I say backed by gold, what I mean is for all the dollars that we had in circulation, there was also gold somewhere in a vault that was tied and associated with that. And that was something called the gold standard. That was until the 1970s when the United States decided to move off of the gold standard from that point moving forward, all of the US dollars that are in circulation, we're no longer tied or they're didn't have to be some gold matching up and tied to the amount of dollars in circulation. So the main worry that some folks have regarding the United States going off the gold standard is a concept called inflation. If we think about it from a supply and demand standpoint, the more dollars that exist or the more dollars that are printed that are within our economy in theory, that can make the dollars that you currently have less valuable. So for example, think about, let's say you have a $100 in your bank account and there's only a $1000 in the rest of the entire economy. Well, you're, a $100 is pretty valuable because you own 100 out of all the $1000 that exists in the country. Now, imagine the government decides to print a $1 million, throws it out into the economy. You're a $100 is still a $100 relative to what it could buy, it's going to become less valuable. Inflation is a general concept that's accepted within our economy. A general rule is, you know, two to 3% per year is acceptable. The problem is, when inflation gets out of control in too much money is printed. And that can lead to a concept called hyperinflation, where basically a currency becomes worthless and it's pretty bad situation for just everybody in the economy in general. There's been examples of this that have occurred throughout history before, such as Germany, Zimbabwe, Venezuela. Understanding this whole concept of basically since the 1970s in the United States going off the gold standard, The United States has gone deeper and deeper into debt, and they've continued to print more and more dollars. There's many people who are concerned about this hyperinflation, incurring, and then losing the value of their dollars and their purchasing power. So it's possible for somebody to own physical pieces of gold. But how this ties in plays into Bitcoin is nowadays, it's pretty widely accepted that many people view bitcoin as a digital version gold. And the reason for that is because the way Bitcoin was created, it wasn't created by a government. It wasn't created by a central agency. It was basically created by an unknown person. In the way bitcoin was developed, there's a limited supply, right? So as time goes on, it's going to be increasingly difficult for somebody to get a hold of a Bitcoin. There's other mechanics that go into it. But the main idea to keep in mind with Bitcoin and why people are so interested in, in it nowadays, simply as a way for them to preserve the value of their money. I know that's kind of a lot, but from a higher level, that's the main reason why nowadays, so many people are interested in Bitcoin. 7. Ethereum: The second most popular cryptocurrency out there is something called a theorem. The easiest way to think about a theory. It's a platform on which many other projects are being built on top of it. So you can sort of think of it first the Internet was developed and then on top of the Internet and many other great projects were built. I know it's kind of an abstract concepts. So let me give you an example of how this could change the world that we currently live in. One of the main possible benefits of a theory, um, and that just this blockchain technology in general is the elimination of middlemen in every part of our society. For example, let's say you're going down to the bar on Saturday night and you need to order a Lyft driver to calm the way you pay lift right now in the way the whole process works, you order it through the app. You send a payment through your credit card to the bank. The bank then sends the money to lift, lift then sends the money to the driver. The main idea behind something like blockchain technology would be the elimination of all those other steps. It could just go directly from you to the driver. Where this gets really cool is there's something called smart contracts within the system. You can program specific things to occur in this Lyft driver example, it could be preset where if you order a ride and the driver doesn't get there within five minutes, that will take 3% off the total bill of when you eventually pay. The easiest way to sort of think about that is right now for a lot of those complex types of situations where if this happens, then we do this. A lot of that type of stuff involves a human element, right? It involves somebody taking a look and saying, okay, well, this unexpected thing happens, so we sort of have to adjust for it this way. Whereas with these smart contracts, you can program all of these types, Then situations to occur immediately. Removing that extra human element, which if you think about it, adds additional cost to the overall process. In general, it would make the whole process now only much more efficient, but that would put more money in the pocket of the Lyft driver and also make the whole trip much cheaper for the rider. There's countless possibilities with smart contracts. There's many other types of cryptocurrencies which are working to compete and become a more efficient, better version of a theorem as I'm currently filming this, these are the two main ones, Bitcoin and Ethereum. 8. Altcoins: The last category of cryptocurrencies that we'll talk about here. I'm going to lump under something called altcoins or alternative coins. These are basically smaller projects and they haven't reached the same market cap or market capitalization as something like Bitcoin or Ethereum. The main distinction between these is because they're smaller, they're much more volatile. They're inherently going to be more risky if you're trying to invest in something like Altcoins, since they have such a small market cap, they're very open to the price being manipulated. Honestly, if a big YouTuber just made a video talking about a small altcoin, that one or two YouTube videos could be enough to move the price 20 to a 100 percent. The rest of the cryptocurrencies, we're just going to lump under the category of altcoins. That's not to say there aren't big Altcoins out there. There's many, many that are coming out every single day, some that are building really great products. So again, to keep it simple, the main three are Bitcoin, the theorem, and then a general category of altcoins. 9. Final thoughts: With that being said, that as a wrap up the course, I first want to thank you so much for your time and attention for the class project. What I want you to do is to complete the attached worksheet and spend just a little bit of time researching one of the altcoins that we didn't talk about within this course. Explain what you learned about it in why you think that is an exciting project. And then once you're done with that, be sure to upload that to the course project. And also too, if you have any insights or any questions or anything that sort of spark your imagination as you're going throughout this research or just the course in general, be sure to leave that in the discussion section so that way, you know me and other students can have a good lively discussion about this and help answer any questions that you may have. And if you do want to see me go more in detail and cover some of the more technical side of things. Let me know in the discussion section, if there's enough people interested, I mean, more than happy to make like a follow-up course to this. Talking about like more advanced topics are going sort of deeper into some of these concepts. But again, thanks so much for your time and ticker.