What is a Crypto Currency and Crypto Commodity?

This is an introduction to the world of cryptocurrencies, and crypto commodities. Lets dive in!

What is a crypto currency?

Back in 2008 – 2009 the USA economy took a gigantic hit and it collapsed the stock market. You may think this only impacted the USA but in reality it collapsed the economy in other countries all around the world. In the wake of this disaster one man named Satoshi Nakamoto created a new paradigm shift in order to attempt to prevent this from ever happening in the future. This creation is referred to as Bitcoin.

The movie “The Big Short” paints a pretty good picture of what happened during this time.

What is Bitcoin?

Bitcoin is a new way to protect value, it uses a technology called Blockchain. The blockchain is a way to have every transaction and transfer of value from one entity of another be validated by a vast network of workers, commonly referred to as Miners. The blockchain cannot be changed, it is set in digital stone therefore alleviating the issue of double spending. You cannot copy and paste one bitcoin and double spend the same bitcoin across multiple transactions. Your transaction is added into a block and then validated with previous blocks and then added to the chain, hence the term blockchain.

What do the miners do?

The miners provide computational power to validate every transaction on the bitcoin blockchain. Every 10 minutes one block containing all of the transactions made during that 10 minute period, is released into the blockchain. At a randomly predetermined time another block which holds a reward of 50 Bitcoin is released. If a miner works (hashes) through this block it is then rewarded the 50 Bitcoins, which it can use to make transactions of it’s own.

The miners originally started as CPUs (processors) on computers, computing transactions and validating every transaction that was ever made with the previous ones. Eventually we realized that CPUs can only do linear computation but GPUs (graphic cards) can do much more complex computations and compare and contrast abstract numbers which speeds up the mining process. The transactions held in one block can be quickly validated with the previous blocks and transactions can be processed much faster which makes sending money from point A to point B much faster than any current ACH method used by banks.

Later on we developed ASIC (Application Specific Integrated Circuits) miners which were made to ONLY work on the bitcoin blockchain network. These miners are manufactured to specifically work in computing the mathematics of the bitcoin blockchain architecture. These miners are able to process transactions even faster than GPUs.

What is a pool?

Hashing through these blocks takes a tremendous amount of computational power. It would take a single computer a very long time to hash through one block which is why pools were created. A pool is a group of miners working together to hash out one block, by working together they can work through the blocks much faster and if a block with a reward is found then the reward is distributed evenly according to how much work was performed by each miner.

Will miners always be able to mine?

Yes. Bitcoin was designed to provide a steady ramp up in difficulty. The difficulty of mining is determined by the length of the block chain, the miners have to validate the current block with every single block that was created previously and then add it to the end of the chain. In time the chain gets longer; which takes longer for the miner to process and validate with all the previous blocks.

Once all the reward blocks have been mined, very small transaction fees will be charged to the users for sending funds and these fees will be recycled into the network and rewarded to the miners. At this point bitcoin should be worth a quite a bit so even a fraction of a bitcoin could be seen as very valuable.

How many Bitcoins are out there?

The bitcoin blockchain protocol was created to only allow the creation of 21 million bitcoins. The block reward folds in half every 210,000 blocks or roughly every 4 years. At the current rate we should run out of mineable bitcoins sometime after the year 21xx. This means that there is a finite number of bitcoins out there which alleviates another problem that created the economic collapse of 2009, inflation.

Our cash was backed by gold which was great when we thought gold as something valuable. However in the more recent years our cash has actually been valued by oil. You typically would rather have something that provides actual value to backup a currency. Gold does not provide much value or usability, it’s simply a shiny rock. Oil on the other hand does provide value; we use it every day to manufacture plastics, to power our transportation systems, to fuel wars and manufacturing of other products such as weapons etc. The higher the value of oil the more the cash should be worth? right? No. The governments still say the cash is backed by gold as it paints a nicer picture in peoples minds in contrast to a dark, sticky substance that fuels violence, makes everyone a slave and destroys our planet.

Bitcoin is value based on demand and trust. You can always trust that every transaction is valid and real as it is validated by thousands of computers (miners) all over the world. You also know that bitcoin has value as there is only a finite amount of them that can ever be created. Instead of depreciating in value like the dollar or other wold currencies, it actually appreciates in value with time due to its limited supply. This is why you have recently seen the surge of bitcoin price from $1000 to $2000 in another 4 years it could go up to $4000 – $8000 per bitcoin and the price will only increase as long as the network remains true to it’s roots.

Where can you buy Bitcoin?

There are many exchanges out there where you can exchange your regular currency using your bank account, credit / debit cards or paypal and get Bitcoin or other Cryptocurrencies in return.

Some of the popular ones are listed below


How do you store Bitcoins?

You can use an online wallet or a hardware wallet. Your wallet address is a string of randomly generated characters.

Some of the popular wallets are listed below



Can Bitcoin be hacked?

In theory a very powerful computer or 51% of the workers could initiate an attack on the network. However this is very unlikely as in order to hack the network you would need to hack every single block that’s ever been created. This would take a quantum computer or something similar to crack, and we are no where near that kind of computational power. In the future things may change but we don’t expect anything major to happen to blockchain technology for the next hundred years.

Exchanges however can be hacked

There has been instances of exchanges, the largest being Mt. Gox being hacked. Hackers stole over 850,000 bitcoins from the service. This happened because exchanges are still using single servers with old technology to store data on databases that can easily be hacked. If you purchase coins an an exchange we suggest you send your coins out of the wallet provided by the exchange into a hardware wallet, or into a different software wallet that you can manage. This way you can avoid losing your coins if the exchange gets hacked.

The Internet is Broken

All of this sounds great! However we have more problems than just money. The Internet is falling apart. Companies are still using SQL databases from the 1970s which can easily be injected with malicious code to then compromise a database server which houses user names, passwords, credit card details, social security numbers,  personal ID numbers, personal addresses and much more that can easily be sold for a few dollars per entry on the dark web or simply dumped on a pastebin for anyone to access and abuse.

The FCC (Federal Comunications Commission) is corrupt and no longer provides for the interest of the consumers, instead it provides whatever the companies with the big budgets want. Ajit Pai was recently appointed as the FCC chairman. He worked for Verizon previously which is known as one of the most corrupt companies when it comes to digging as much money out of the average consumers pockets. AT&T, Time Warner Cable, and Comcast are some of the other big monopolies that like to do this to consumers. The FCC is now planning to abolish something we refer to as Net Neutrality which is essentially the notion that any website or service on the Internet should receive the same amount of bandwidth; nothing gets a fast lane and everything is treated equally. This allows the 10 year old to create a website and become as successful as the billionaire sitting in New York. If Net Neutrality is abolished we will live in a world where we will have “Internet Fast lanes” or “Internet Service Packages” similar to what you would get with Comcast Cable TV or Dish / DirecTV packages.

Think about it… How many of those useless channels do you pay for with your cable subscription, but never view or pay attention to? Wouldn’t you rather just pay a flat rate and have EVERYTHING available at your fingertips? You can choose what you want to watch or not? Yes your TV guide might be a bit cluttered but the best of the best channels will get the most views and succeed while the worst ones will fade into non-existence; and are replaced by something better. Survival of the best is the way the Internet works which provides a stable platform for innovation and new ideas to flourish. Now lets reverse the analogy and apply the cable TV service model to the Internet.

How would you like to pay $50 to have an Internet connection, in addition to that you have to pay $15 extra to have access to the “Social Media Package” which might include twitter, facebook, google +, Tumblr, and Instagram. $15 extra to have access to the “Voip Package” which includes Skype, Google hangouts, Discord, What’s App. $15 extra for the “Gamer Package” which might include access to Steam, Origin, Microsoft Games, PSN, Xbox live. $20 extra for the “Video Streaming Package” which might include Netflix, Hulu, Amazon Video, Youtube and Twitch. In addition to all of this you have a 500 GB or less data cap. I don’t know about you, but this seems like a completely stupid idea. This gives immediate privilege to the companies that are already established and make it impossible for new startups to create a better service to compete. Youtube was once an obscure website which not many people knew about, fast forward to today and you can see now it’s mainstream, but it could have never been elevated to this level if we had these net neutrality restricting rules in place. The Internet is meant to be a convoluted place, it’s the last place where we can still exercise freedom of speech. Passing these new laws will silence the little guys while giving more power to the already powerful. Talk about major corruption!

The solution: Crypto Commodities

Meet Vitalik Buterin and Ethereum

Ethereum was created by Vitalik Buterin and is based on the blockchain technology of Bitcoin. Vitalik saw much more than just a solution to money with the emergence of bitcoin. He saw a truly dynamic and decentralized network that could be established based on trust and completely abolish corruption.

Vitalik thought of bitcoin as a tool, a very simple tool. He compares Bitcoin to a knife. A knife can be used for cutting things and that’s about it, Bitcoin can be used for payments and establishing value. Vitalik wanted to create something better so he asked, what if I can create a platform for the knife to sit in? He thought of a platform where Bitcoin or other Crypto currencies could be used and more could be added if needed. Compare this to the Internet, where the Internet is the framework but protocols provide the means to create websites and services.

What makes Ethereum different than Bitcoin or other Crypto Currencies?

First and most importantly Ethereum can ONLY be mined with the memory of GPU’s (Graphic Cards). The powerful ASIC miners that were developed for bitcoin mining cannot be used to taint this new platform, as the protocol and computation is completely different than what the Bitcoin ASIC miners were designed to compute.

Ethereum is a smart contract based crypto commodity. What does this mean?

Ethereum was not created to be a currency however it has value just like a currency would. Ethereum was created as a completely new development and contract platform, where payments can be processed, data can be stored and shared, and trust can be established without knowing anyone else on the network. After all you would consider the Internet to be valuable right?

Ethereum can create tokens or other crypto currencies under itself which can be easily traded and can have independent value from ethereum. These tokens can provide services or some sort of functionality. Some of these uses include advertising fees, computing power, payments on specific platforms, speculation and prediction markets, gambling, data storage.

Ethereum has it’s own programming language (Solidity) than has standards and can be changed in accordance to needs. Ethereum is a decentralized platform in the sense that miners perform work just like with bitcoin and the miners are located all over the world. However Ethereum has a panel of people than can directly affect where the technology is headed. Vitalik is the main contributor to the project and he will add more members  and make changes as he sees fit.

Ethereum can also be used to trigger events at set periods of time for example you could use Ethereum to automatically pay your home bills, pay toll road fees so you don’t get hit with a hefty fine, pay for parking fees based on the location of your smart car (Tesla I’m looking at you!). You can program sales for pre-set periods of time or when certain conditions are met, for example having too much inventory could trigger a 25% off sale. The uses for the platform are endless!

When was Ethereum created?

2014 was the year when Vitalik brought the Ethereum notion to the masses. To get started Vitalik created a crowdfunding campaign in July 2014, contributors donated Bitcoin in exchange for a promise of Ethereum shares once the network was up and running. Ethereum was fully up and running on July 30th 2015. It was not a pretty platform but it worked as intended.

Who supports Ethereum?

Ethereum is still in it’s infancy, however it has caught the attention of major corporations including:

JP Morgan

140 other companies also support the platform and more companies will be announced in June 2017

How much does Ethereum cost?

When Ethereum was sold in the crowd sale it cost a few cents per Ether, as of today May 28th 2017 1 Ether costs up to $150. You can see there has been a huge adoption of the platform and it has much more support coming in the next few months and in the future.

Has Ethereum been hacked?

Yes. Ethereum can create tokens under itself. One of the tokens was  referred to as the DAO (Decentralized Autonomous Organization). DAO was one of the most popular tokens on the ethereum network, and had a good amount of investors. In essence a bug was exploited in how the smart contracts on the DAO triggered, and the bug was used to steal $50 Million worth of DAO tokens. In order to prevent the theft the team that manages ethereum created what’s called a hard fork of the ethereum blockchain; which would create a new revised copy of the blockchain while leaving the old one behind and refunding the money to the original users. This started the separation of Ethereum and Ethereum Classic as there were some users that chose to oversee the dangers of the hack, and kept going with the classic or original blockchain while most users switched to the new chain preventing their funds from being taken by the hacker.

How can I purchase Ethereum?

You can purchase them on the same exchanges as bitcoin, The exchanges are listed below.


How can I store Ethereum?

You can use the following wallets to store your Ethers



How can I mine Ethereum?

We have posted a few videos on the process of mining ethereum on our youtube channel. Yes this is still feasible but it will not be possible in the near future. As Ethereum will move to a new method of mining referred to as Proof of Stake which will use all of the existing ethereum tokens to validate transactions. This will also limit the amount of ether in circulation making every ether in existence more valuable the longer it’s staked in the network.

2017 and possibly early 2018 will be the last chance anyone will get to mine ethereum using the conventional Proof of Work method that bitcoin uses.

You can learn how to setup a miner by following our tutorials below.
PC Turnaround Youtube Channel

How far will Ethereum go?

Ethereum has only been around for a couple of years now. Bitcoin has been around for 8 years. Ethereum is already catching up to Bitcoin; it’s only a matter of time until Ethereum growth surpasses Bitcoin and maybe even adopts Bitcoin as one of the tokens that can be used on the ethereum Network. Ethereum will create a whole new platform that is unhackable completely secure and trusted with minimal possibilities for corruption. Adoption will continue to grow by hundreds of companies and it could completely revolutionize the way the Internet works, considering the current state of net neutrality. This seems like the next step in the evolution of technology against to corruption of centralized governments and corporations. Eventually it will just blend in with everything around us and will become something we use every day just like the internet.

Should I invest in Ethereum?

Short Answer, YES. If you could have invested into the Internet would you have done so? Ethereum has only been around for a couple of years but it has the potential to change everything. Ethereum will keep growing and evolving. It will gain widespread adoption as companies start to see the benefits of having people all over the world host their databases, render their videos and pictures, manage advertising fees, automate functions between humans and AI and process payments; rather than having massive server data centers using tremendous amounts of power. This technology also gives a bit of power to every single person that contributes to the network which will make the companies work for consumers once again rather than just for profits.

If you invest into crypto currencies or crypto commodities expect very high volatility. The markets will shoot up and down depending on what’s going on, however if you’re patient and are able to hold through the crazy ups and downs you will ultimately end up with a positive ROI.

You can easily purchase Ethereum and Bitcoin using coinbase, just click on the picture below. We also suggest transferring your coins out of exchanges ASAP to avoid issues like the Mt. Gox hack discussed previously.





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