You could argue we are using cryptocurrencies by default, most people use credit cards and no cash or gold or anything physical changes hands, its all numbers and trust. No different to bitcoins really.
Only the taxman and banks dont make a cut every time a number moves.
I have done well out of bitcoins, was mining them in the early days just for fun, cashed in most at last peak, so in hindsight I should have kept them all. But thats how hindsight works.
For those confused at what they are, they are everything, really digital cash. If you take $20 out of your wallet do you worry how many hands that piece of plastic/paper have been through before it became yours? Now many rapist, murderers, pedophiles, etc had it before you? Bitcoin is not for people commiting crimes, so is cash, so is gold , so is anything with an intrinsic value.
Once the proof of concept took off in its early novelty phase, clones cropped up and died away and exchanges came along to allow people to swap their money into and from bitcoins. It works like every other money market but also like a commodities market essentially. You could invest $1M in gold if you want but you will never physically own that as a pile of actual gold. So much of the existing markets are just as vapourous and based on nothing as cryptocurrencies. You could buy $1M worth of physical gold and sit on it at home and sell it off later, but actually owning it will produce problems of proof of ownership and provence etc. The markets are only concerned with the movement of numbers, bitcoin has just become another one of those numbers. People make money when the numbers go up then make a little more when it goes down, this is happening constantly, They rarely get rich by buying stock today at one price then waiting for it to just go up and sell once. Moving averages are typically where people get rich when markets move suddenly.
You can use bitcoins as purely cash if you like to bank your cash out of the banks that whittle away at it with fees and won't pay you interest.
You can use bitcoins as an investment, it doesn't always move for the same reasons as the traditional markets move.
You can mine bitcoins for free but not really anymore as the system ws designed to increase in difficulty with use and slow the mining down and years ago it passed the point when the cost of electricity to mine a bitcoin was higher than the value of the bitcoin or satoshi you actually get from the process.
It was the people mining that made anything from the bitcoin system, these days you can try it for fun but it wont be for profit. Eg at the rate I mine today my estimate is over 25yrs to mine 0.1BTC, so you think 25yrs of electricity is less than $700 odd in return? but what do you think that 0.1BTC will be valued at in 25yrs time when it pays out? will it grow 100 times, 10000 times? Hell I never thought $100/BTC was going to be possible and my goal when I started mining as a novelty was maybe it would buy me a DVD one day, a free dvd just for letting my computer which is on 24/7 do a little extra work seemed worth it.
If you are already a savvy investor in the stock/money markets you stand a chance of investing in bitcoins and coming out ahead. But like the other markets buying and selling itself has its commission fees etc and then theres banks and their currency conversion/transfer fees and the taxes on top too. As bitcoin has grown and matured so have laws and you still have those fees to deal with now, it the earlier days there weren't as many hurdles from exchanging your $ with BTC.
Trust ran it all and yes many people, myself included got burnt by theft. To mine bitcoins you really need to join a mining pool, these cropped up regularly and like anything new nobody knew which are trustworthy unless they give them a try etc. Similarly exchanges could be the same. And once the values went up the operators of those sites could give in to temptation and keep the bitcoins for themselves, nobody knows who they are or where they live after all. The mining pools operate by portioning out small packets of data to process(mine) to its users from the current block that needs to be mined. Every packet mined gives you a share of the block value, so its lots of machines mining away and sharing the profits according to their effort basically.Typically this means you get maybe 0.000000017 BTC for the effort maybe as there were thousands of people mining the same block in your pool. So this amount is held for you by the pool and the next block to be mined you get a different amount again in proportion to the mining effort your computer contributed and so on andso on. The usually once you'd earnt say 10BTC you cash that out from the pool and at that point it gets sent to your bitcoin wallet. Once its there you have your bitcoins in your hand, nobody can spend them or steal them , only you. But until then the bitcoins are in the pool owners account. So imagine now you run a pool, you have thousands of users and they typically payout at 10BTC so they all have some amount they havent claimed yet therefore you probably have tens or even hundreds of thousands of bitcoins in your pool owner account, and now the value of 1BTC is suddenly not a novelty $1.03/BTC but $1,500/BTC. A bunch of pool owners just vanished, keeping the entire pool of btc for themselves and anyone who hadnt claimed their share got left in the lurch. As I did with one pool. But now there are pools that have been around for long enough to be considered trustworthy for miners wanting to dabble in it. Like any company or brand or anything, with time the trustworthy tend to be the ones who've been there all along. Its no guarantee of anything really but a good indicator.
Scams, bitcoins is not and never has been a scam. People use it to run scams however. Just like taking your cash and credit card details, it depends on the scam. The scam itself doesn't make money itself meaningless, thats just people being a-holes as normal. Bitcoins are not to be feared by people only governments and banks as the money is held by the people and doesn't sit somewhere the banks and governments can continuously take chunks of it from you forever. It is truely open and accountable and every bitcoin transaction can be traced as far back in history as that bitcoin existed unlike that $20 note in your wallet.
Doesn't matter the currency of valuable object, someone somewhere will use it for purposes you disagree with. Government backed or approved it doesn't matter, bad people will find ways to do their bad things.
If you find this information helpful I greatly accept donations to my medical expenses in bitcoin and litecoin. Any amount no matter how small is appreciated.
BTC: 14CTRNqHCoq2AX145qCoHwGP6VWFmjQMDR
LTC: Ld7V1BbXbrBqtncLBCYT6R2eoxRo67J1Ax
