All aboard the crypto gravy train

All aboard the crypto gravy train

We all felt the heart palpitations as Bitcoin reached unparalleled heights during the holiday season, from ~$20,000 a BTC to a whopping ~$40,000 in the new year. Cryptocurrencies, especially Bitcoin, are infamous for their drunken swings and depression lows, causing dilettantes to either invest like hungry sailors or jump ship like the blockchain is aflame. Before Bitcoin gave us a hope of a trustless, decentralized financial system actually coming to fruition, I started studying cryptocurrencies and the underlying blockchain technology in October 2020. I had no clue about blockchain’s potential and only heard vague whispers about crypto fanatics and the FASB twiddling their thumbs on accounting for digital assets.

I wanted to get into the tech industry and possibly find a new career, and crypto was a total shot in the dark. I lucked out because my boyfriend’s roommate is an integrations engineer for the Maker Foundation, the organization behind the MakerDAO protocol and the Dai stablecoin. In a feverish whiteboarding session one caffeinated Saturday morning in San Francisco, he explained the beatnik crypto world and the opportunities within it. Compared to the traditional financial world and my decaying accounting profession, crypto is the overthrow of Queen Liliuokalani in the 1890s.

In the intervening months, I’ve “gone down the rabbit hole,” consuming crypto content and learning Python and Git so I don’t feel like an imposter. I also started the Phoenix Crypto chapter, which is part of the broader Codecademy chapter network. My club, still nascent and pulling ~15 members per session, is an experiment in community building and on-the-ground learning - it’s the blind leading the crypto blind, but I’ve had tons of fun researching and leading meetings. Our second meeting was all about “getting into crypto”1 as a nontechnical person; it’s the only crypto topic I was half-qualified to pontificate on since I’m 1) a n00b and 2) a classic bean counter and not a human computer. This article is a distillation of that meeting and part framework for understanding basic crypto ideas, part personal ramblings on my foray into tech. I started 2020 as your average tech girlfriend and ended it coding dictionaries and list comprehensions in Python. Cheers!

What the Flamin’ Hot Cheetos is Crypto?

Legitimate and sustainable bull market or digital scam?

Legitimate and sustainable bull market or digital scam?

Cryp·to·cur·ren·cy: a digital currency in which transactions are verified and records maintained by a decentralized system using cryptography, rather than by a centralized authority.

My first exposure to cryptocurrencies was during an Information Systems Assurance2 class in graduate school. My professor simplified crypto to the extreme, saying blockchain was a decentralized “super computer” and transactions were appended to each other through “blocks.” It didn’t get any deeper than that, but I remember watching YouTube videos in my spare time about miners and blockchain tech. In another class, Accounting Regulation, I was assigned a project to develop a FASB (public company) accounting standard for cryptocurrencies. Was it a digital intangible asset, short term investment, cash or cash equivalent or inventory? The FASB is still deliberating on that, but even with a dearth of knowledge, I could see how consequential blockchain-enabled assets were.

Fast-forward a year, and I’m evangelizing crypto to Twitter strangers and scanning the open positions on Coinbase like a fiend. In my words, crypto is an intangible asset who’s store of value is enabled and confirmed by blockchain technology, which acts as a decentralized computer with different nodes (i.e. individual computers) on the network continuously verifying transactions and adding them in blocks to the chain. Cryptocurrencies like Bitcoin or Eth have their own protocols (sets of rules in the software) and separate blockchain ecosystems; other smaller crypto assets like altcoins or NFTs live on top of these established networks. Blockchain is a giant accounting ledger with stores of values being debited or credited to various accounts. For an ultradeep look at Bitcoin that provides historical context, I highly recommend this Medium article by Ben Yu.

You can’t physically hold cryptocurrencies3, but your rights to ownership are uncontested (unless someone discovers your private key). This idea - that crypto assets were intangible yet they still commanded real value - flummoxed me until I remembered the The Scent of Money chapter in Sapiens by Yuval Noah Harari. He wrote,

“…money isn’t a material value - it is a psychological construct. It works by converting matter into mind…trust is the raw material from which all types of money are minted. When a wealthy farmer sold his possessions for a sack of cowry shells and travelled with them to another province, he trusted that upon reaching his destination other people would be willing to sell him rice, houses and a field in exchange for the shells.” (page 180)

As the example illustrates, the concept of money - whether it be fiat or a gold standard - is a construct that human imagination gives value to. Discovering this made me question the real value of my Chase bank account and wonder if anything in this life has inherent, indisputable value. Love, maybe.

Back to the agenda though: beginner resources for understanding cryptocurrencies. During a Phoenix Crypto meeting, I stressed that crypto is like a college class you have to study for and ace. Especially if you’re investing, not doing your homework can ruin you financially and lead to an overall bad taste for crypto.

Learning about crypto is a never-ending process - for an industry and idea so new, the demand for innovation still vastly outnumbers the supply of creators. My brain has been massaged and stretched these last months by Crypto College4, and the Eureka! moments keep coming.

Additional Resources:

Getting Technical - Beep, Boop Bop :}

Snippet of code from Codecademy’s blockchain in Python course

Snippet of code from Codecademy’s blockchain in Python course

The second hurdle to understanding cryptocurrencies is the ultra technical nature of the project - after all, we can only have these unprecedented levels of security and speed because of the leaps in computing. Not knowing how to code is a barrier if you’re looking to be a developer and build applications. If you’re a thoughtful investor, the story is a little different, but having a fundamental understanding of how blockchain works is paramount.

The good news is that coding is (theoretically) an easily acquired skill, and the resources for learning are 1) cheap, 2) abundant and 3) community-based. My first recommendation is starting with online courses such as Codecademy, Udemy, Coursera, etc - I wouldn’t enroll in a bootcamp right away (they can be expensive with mixed results) but would instead rely on the power of self-learning. Crypto tends to woo those who are teetering on the edge of total crypto addiction - and once that happens, you’ll seek and absorb crypto knowledge like it’s your breakfast, lunch, dinner and midnight snack.

I started with Learn the Basics of Blockchain on Codecademy; it’s a two-part course that covers the theory of blockchain and teaches you how to build a mini-blockchain using Python. I realized I didn’t know anything about Python, so I put myself through the Python 3 course on Codecademy in tangent. Then I had to figure out how to use Git to upload my work in VSCode to Github, and the snowball rolled furiously down the coding hill. It’s funny how coding is something I enjoy as an adult when I hated it in high school - the tools for learning have 10x-ed in their design and methods of explaining, and I wish Codecademy was around when I was 17.

Once you have a grip on basic coding concepts, it’s time to get specific and learn the language of crypto protocols - in the case of Ethereum, that means learning Solidity so you can write your own smart contracts on the platform. Ethereum.org has brilliant developer resources and documentation and even links to CryptoZombies, an interactive game that helps you learn Solidity while killing the roving undead. Udemy also has a great Solidity course and countless other blockchain/Bitcoin/Altcoin/Ethereum courses (and they’re always on sale!)

In my experience, the technical challenge of programming wasn’t as large as understanding the theory of digital currencies. Coding is intuitive and stamped into everyday life, whereas the ideas of mining, Proof of Work and Proof of Stake, nonces, merkle trees and protocols are mind-numbing. What hell does it all mean? Once those pieces fall into place and your mental framework is solidified, then adding code into the equation is the cherry on top.

If you’re looking to be a miner or validator in the protocols, that adds another layer of technical complexities beyond the scope of this article. I recommend reading the Ethereum.org resources on staking to get started (but beware, being an active node uses a ton of computing resources, racks up utility bills and is overall unsustainable for the planet in its current form. Switching from PoW to PoS should hopefully help with these issues).

Additional Resources:

Putting your Pleb Fiat Money into Crypto

Disclaimer: this paragraph is not intended to give investing advice.

Disillusioned with fiat currency and want to convert your assets into crypto? That’s not a terrible idea, considering how precarious fiat currency is. The US Federal Reserve printed over $3 trillion new dollars in 2020 to combat the economic effects of the pandemic, which equated to about 20% of the total supply of dollars. If we think about the classic supply and demand curve, it’s clear that an increase in the supply leads to a drop in price - or value - of an asset, which goes hand in hand with rampant inflation. The fact that governments can print whatever money they want - and the only thing backing that money is collective trust in said government - is terrifying. In the case of Bitcoin, politics are (mostly) backseat while the total money supply is capped at 21 million Bitcoins forever. Inflation resistance started looking attractive to individual and institutional investors in 2020, when the interest rates on their assets essentially went to zero.

Meme or strategy of the Federal Reserve?

Meme or strategy of the Federal Reserve?

For the casual investor, getting into crypto markets can be daunting. The bad taste of the Silk Road, Mt. Gox and countless other crypto scandals still makes crypto investing feel sketchy - and that’s where Coinbase and hardware wallets come in. Buying crypto in 2021 is simple and secure, and I recommend watching this Crypto Casey video to get started.

My grossly oversimplified steps for investing in crypto are:

  1. Gather and learn background knowledge on crypto before investing

  2. Create an account on Coinbase, link your fiat bank account and buy crypto

  3. Store your crypto in an offline hardware wallet

  4. Deploy your assets in the protocols (i.e. DeFi in Ethereum) or hold for the long haul

I can’t stress enough that you should understand what you’re investing in before you buy it. I know Dogecoin is all the rage now (thx @ WallStreetBets), but PlunderYurBooty said it best:

Finding your Crypto Community

One of my favorite parts about crypto is the communities that have popped up around it. This field is weird and attracts certain types of risk-takers, so finding your niche community is an important quest. I started the Phoenix Crypto chapter on Codecademy to find others who are also enthusiastic about crypto’s technology and potential. Our meetups are virtual because of covid, so I’ve gotten to meet Ohio lawyers, interview crypto professionals living in San Francisco and chat with fellow chapter leaders in New York City. Crypto fever is here to stay and communities have the power to disseminate knowledge, connections and ultimately, adoption of the financial future. You can find Phoenix Crypto on Twitter, view our chapter page and Notion doc and join the #phoenix-crypto channel on the Codecademy Discord server.

Other innovative communities include SheFi, a “DeFi educational program that is also a vehicle to donate funds to nonprofits that educate women in STEM programs.” Applications for their Winter 2021 cohort are open, so definitely apply if you’re a womxn interested in shaking up crypto. There’s also the seminal Silicon Valley Bitcoin group on Meetup that helped introduce crypto to the mainstream.

As my pal Kenton said, crypto is a brain disease that slowly infects your cells until your worldview has totally shifted to crypto crypto crypto. Once you understand the long-term implications of this tech, it revolutionizes your ideas about money, the meaning of value and the importance of security. I firmly believe digital assets will be the crux of our economy, whether we reach that critical point in 50 years or 5. But the crypto coup is definitely coming - down with fiat!

  1. One of the club members asked what I meant by the phrase “getting into crypto.” I agree that the semantics can be confusing since crypto encompasses an umbrella of concepts - investing in crypto, building cryptocurrencies and applications as a developer, sparking a crypto community, etc. My definition of “getting into crypto” is furthering the study and discussion of this weird, intangible thing that upends millennia of human understanding. I don’t give out investing advice at my meetings, but I do think spreading the ideas of crypto and their potential is important. ↩︎

  2. A fancy name for auditing in the digital age (basically, using computers for audit work instead of pencils and physical ledger paper.) ↩︎

  3. You can technically store them in a physical hardware wallet, but that’s more of a means to prevent confiscation and promote security. You can’t siphon a physical bitcoin out of your wallet like you can with a ceramic piggy bank. ↩︎

  4. The unofficial name for the self-study regime I’ve been putting myself through. ↩︎

  5. If you want to work at Gemini with the Winklevoss twins, here’s your chance. ↩︎

  6. Codecademy has off-platform projects that utilize Jupyter Notebooks, which is an interactive way to write and compile Python. It’s tricky to install (you have to install the miniconda package and open via the terminal), so do some research before. ↩︎