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In Part 1 I touched on the basics of Bitcoin. For this part I’m going to switch it up and make use of a couple of short videos to help with explanation of the Blockchain.

What is the Blockchain?

Watch this video first. (Don’t mind the fact the title says “for kids”. This kid does a better job at explaining this than most adults.)

Next, watch this video. I think this one does a good job at filling in a few gaps from the first video.

A few quick highlights from the above videos:

• Blockchain is exactly how it sounds. A chain of blocks
• Each block has information about a transaction
• As new transactions occur the chain gets longer
• The history of this chain and each of it’s blocks is shared with everyone’s computer who chooses to be on the network. Therefore, the information is not stored all in one central location (i.e. a bank)
• Because the information is not all stored in one central location, if the information is tampered with in one location the records are still safe and traceable because the contents of the chain is on all of the other computers on this network as well
• The computers on the network are called nodes and your own computer could be a node on the network if you choose to
• The more computers on the network the stronger and more secure it is

What is an Altcoin? These are alternative coins to Bitcoin. This covers just about every other coin out there that is not Bitcoin.

How can you invest in Altcoins? There are several exchanges out there that offer Altcoins. The main one I use is Binance.

I’m going to walk you through  how I do an Altcoin transaction with few steps:

Step 1: I buy Bitcoin through Coinbase

Step 2: I transfer Bitcoin from my Coinbase account to my Binance account.

Step 3: I search for the coin I would like to purchase on Binance and use the Bitcoin I transferred into my Binance account to purchase them.

(*NOTE-When you’re making purchases of altcoins, whether on Binance or another exchange, you will not purchase them in Dollars. If you’re using Bitcoin to purchase altcoins, depending on how much you’re spending you might use several decimal places to place your order. BE CAREFUL HERE AND PAY CLOSE ATTENTION TO MAKE SURE YOU ARE PUTTING IN THE PROPER NUMBER OF DECIMAL PLACES.)

What is a wallet? This is a place for you to safely store your digital currency.

Do I need a wallet? Yes. When you open a Coinbase account and purchase Bitcoin or Etherum (another popular cryptocurrecy) your coins are being stored in a wallet on Coinbase’s platform. Same thing when you are buying Altcoins on an exchange. Your coins are being held in a wallet on that exchange.

How safe are wallets? This is where the cryptocurrency world starts to get a bit sticky. There are varying levels of safety with wallets. The safest two are the paper wallet and a hardware wallet. I will save this discussion for a later post, as that can get a bit more in depth and this series is meant to be an introduction.

In the final part of this series I’ll share some final thoughts and resources to get you started on the world of cryptocurrency and if you haven’t already check out Part 1.