Are you interested in crypto but not sure where to begin? No doubt you’ve heard of bitcoin - one of the many cryptocurrencies - but let's take a closer look to understand what cryptocurrency is and how it works.
Crypto is a form of currency built for the internet.
It's powered by the blockchain, which is a technology that allows transactions to be recorded, and is very difficult to reverse. Gemini believes that this technology can improve economic efficiency, productivity, and financial inclusion.
What is crypto?
© 2020 Gemini Trust LLC
How has bitcoin evolved
over the last decade?
One of the benefits of bitcoin is that the total global supply is capped at 21M, which means it's not subject to inflation in the same way that government issued currencies are. As of January 2020, 18M bitcoins have been mined, but bitcoin technology still has a long road ahead.
Here's a timeline of bitcoin’s growth over the last decade:
10/31/2008
Satoshi Nakamoto publishes the Bitcoin Whitepaper
01/03/2009
The first block in the Bitcoin blockchain - the “Genesis Block” - is established
10/12/2009
Bitcoin first gained value when 5,050 Bitcoins were sold for $5.02, valuing 1 Bitcoin at $0.0009/BTC
11/22/2013
Virgin Galactic announces they will accept bitcoin for space travel
05/22/2010
The first real-world item was purchased for 10,000 bitcoin (fun fact - someone bought two pizzas)!
10/08/2015
Gemini launches in the United States. The price of bitcoin at the time was $268.01/BTC
12/18/2017
Bitcoin reached it's all-time high price of $20,089/BTC
06/2017
Market cap of bitcoin exceeds $100 Billion
Financial institutions like Bank of America have listed bitcoin as:
Why should I choose to invest in crypto?
Part of bitcoin's success has been driven by its high volatility, liquidity, and resilience. In 2019, BTC opened the year at $3,871.75 on January 1, and ended 2019 at $7,100.02 on December 31st. It reached a high of $13,829.07 during that time, and a low of $3,360.75. Many analysts compare bitcoin to 'digital gold' and suggest distributing 1% of your portfolio to bitcoin. As a result, many have invested in crypto alongside their precious metals commodities.
"the best performing asset class of the last decade."
*The decision to invest in bitcoin or other cryptocurrencies depends on many variables, including one's tolerance for risk and familiarity with cryptocurrencies. The risk of loss in trading cryptocurrencies may be substantial and losses may occur over a short period of time.
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What are leaders saying
about crypto?
"Some crazy stats to consider: In May 2017, one bitcoin was worth more than twice as much as an ounce of gold. By October, bitcoin reached a market cap of $88.35 billion, which surpassed massive corporations, like Starbucks and American Express. And by December, Bitcoin’s total value was $277 billion - almost as large as the economy of Singapore.
Generally speaking, buying Bitcoin is not a golden ticket. Nor is it a substitute for a financial plan… Bitcoin is the first cryptocurrency that’s truly driving change in how we conceive of the very nature of money."
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—Alexa Von Tobel, Author of
Financially Forward
Some of the leading reasons why unbanked adults don’t have an account, according to a Global Findex poll:
cost of an account
What are the global benefits of crypto?
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"Bitcoin is disruptive from a technology perspective, but there's a tremendous power of social good behind it. So you can both build a cool business or have a great investment return, and there's the promise of potentially improving the remittance industry or banking the unbanked."
— Cameron Winklevoss
Secure cryptocurrency exchanges can help people access a global digital economy.
How?
Blockchain networks give people unprecedented access to credit, secure financial products, and spending power for both physical and digital goods. Crypto also allows people to transfer their funds globally and almost instantaneously, without high transaction fees.
individuals worldwide don't have access to banking services
1.7B
What are the different types
of cryptocurrencies?
There are over 2,200 different kinds of crypto tokens. While they all share certain fundamentals, the specifics of how each cryptocurrency works depend on the purpose and design of their respective blockchain protocols — and they can vary widely. There are several types of cryptocurrencies today:
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Utility Tokens
(or Virtual Commodities)
Security Tokens
Non-Fungible Tokens (NFTs)
Stablecoins
Bitcoin and ether (the native currency of the Ethereum blockchain), are generally considered utility tokens because they function as utilities within their networks.
Security tokens have characteristics resembling traditional investment instruments, like equities, and are typically used as fundraising vehicles. They may evolve over time and gain utility functions as the network ages.
NFTs are altogether different in nature – they're still recorded on the blockchain, but each NFT is unique and valued individually, similar to a baseball card or a piece of artwork.
Stablecoins are made when assets, like the US dollar, are turned into a token. The benefit of this type of token is that it can move freely on the blockchain, but have the price stability of traditional currencies.
What is a stablecoin?
Stablecoins are issued to customers in exchange for a specified currency at a fixed exchange rate. The specified currency can be a fiat (like the U.S. Dollar), a cryptocurrency (like bitcoin), or a commodity (like gold).
How do stablecoins remain..stable?
Stablecoins remain stable because of the fixed exchange rate and the stability of the underlying currency. The Gemini dollar is pegged to the USD, meaning you can exchange 1 Gemini dollar for 1 USD.
Why are stablecoins important?
Stablecoins are designed to remove the price volatility of many cryptocurrencies while maintaining the technological advantages of cryptocurrencies, such as the ease of transfer.
Can you tell me more about stablecoins?
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When Gemini’s founders, Cameron and Tyler Winklevoss, first learned about bitcoin in 2012, it was the Wild West days of crypto. At that time, there were very few safe, trusted ways to get into crypto. To help build the infrastructure and provide access, they wanted to create a regulated, easy, and safe way to invest in bitcoin and other cryptocurrencies. In order to comply with the NY regulatory framework, they waited to operate until Gemini received it’s New York Trust license.
It’s still the early days of blockchain and crypto, and this technology will only continue to reimagine all industries, starting with money. So Gemini stays focused on the long game, and will continue to build and invest in the technology, products, and tools that are meaningful for what’s needed to move this marketplace forward.
How did Gemini start?
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What should I look for in a secure exchange?
Crypto has incredible potential, but as with almost anything: safety first! Choosing the right exchange where you can securely trade and hold your crypto can be challenging, especially if you don't know what criteria to look for. Below is a list of questions we suggest asking to help guide you in this process:
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Does the exchange have a regulated Know Your Customer (KYC) process? Asking for information, including SSN, is an important part of secure and regulated exchanges, similar to banks.
Is the exchange/custodian organized as a Trust company? Who are they regulated by?
Does the exchange have insurance on both online and offline wallets, and how much of your funds will it cover?
What is the exchange's approach to security? The exchange you choose should have security as a foundational pillar to ensure your money is being stored in a safe way.
Who is on the exchange leadership team? Strong leadership teams are a sign of the exchange's long-term strategy, so we recommend making sure the exchange you choose has a trusted and reliable executive team.
The insurance market for cryptocurrencies is very limited today. However, Gemini has insurance coverage for the digital assets that we hold on your behalf in our online hot wallet and in offline storage.
What are some questions you should ask when choosing an insured exchange?
Are my digital
assets insured?
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Take this quick survey so we can learn more about why you're interested in crypto.
Thanks for taking part in Gemini's 20 Things to Know About Crypto in 2020!
Survey
Gemini is building a trusted bridge between the ‘old world’ of money and its future with cryptocurrency.
We know people have a lot of questions about this exciting new technology, so based on frequently asked questions, here are 20 things we think you should know about crypto and how to get started in 2020.
NY trust license
Pairing one of the oldest regulatory frameworks in the world with one of the newest global technologies.
Regulated by the NYDFS
Gemini is a fiduciary and subject to the capital reserve requirements, cybersecurity requirements, and banking compliance standards set forth by the NYSDFS and the New York Banking Law.
Registered in 49 states as a money transmitter:
An anti-money laundering requirement.
Member of the Virtual Commodities Association (VCA)
We believe adding a layer of oversight in the form of self-regulation, is important for consumer protection and to ensure the integrity of these markets.
What are the regulatory best practices that Gemini follows?
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Regulation is core to our DNA, and we continue to work with - not around - regulators to establish thoughtful crypto regulation.
How should I get started in crypto?
There are numerous ways to get into cryptocurrency — so many that it may be hard to discern the safe approaches from the riskier ones.
Here are some practical ways to get crypto:
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Buy it on a regulated cryptocurrency exchange.
Find peer to peer freelance opportunities that pay in crypto.
Use a bitcoin ATM.
Whatever approach you choose, you’ll likely need software called a digital “wallet” to store it, or you can store your bitcoin with a regulated exchange like Gemini.
You don’t have to buy the entire bitcoin all at once. Similar to a traditional savings account, 401K, or digital investment account, you can start investing in cryptocurrency a little bit at a time. This is called “fractional investing”, and can be done as a one-time trade, or on a recurring basis on the Gemini mobile app or desktop. You can get started for as little as $2. Placing a recurring order is an easy way to automatically invest small amounts over the long term, without needing to place multiple individual orders.
What if I want to get started in a small way?
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Many exchanges offer a service called Custody. Think of custody as a digital safe deposit box for your crypto. Custodying crypto, as opposed to storing other assets like cash, requires a new class of digital-first infrastructure.
Custody solutions come in two forms, which are often referred to as online (“hot wallets”) or offline (“cold storage”) systems. The key difference between the two is whether the storage system is networked or in any way remotely operable.
Gemini's Custody product has the strongest security standards in the industry. Gemini Custody™ also offers the largest insurance coverage limit of any crypto custodian in the world.
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Where can I use crypto in 2020?
There is a growing list of companies that accept it as a form of payment. So how and where can you spend crypto?
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Gemini has partnered with various companies that are working to expand the use cases for crypto.
Offers high yield savings accounts and crypto loans. It's integrated with the Gemini dollar (GUSD) throughout its platform and offers 8.6% APY at present on GUSD deposits.
The world’s leading cryptocurrency-friendly hotel booking service accepts the Gemini dollar (GUSD) as its first major stablecoin for payment.
Flexa is a global cryptocurrency payments network that enables users to spend their crypto with major retailers. Consumers can easily spend their Gemini dollars (GUSD), bitcoin, ether, Litecoin, and Bitcoin Cash using the SPEDN mobile wallet app.
How can I continue learning more about crypto?
There are numerous ways to better understand crypto, the technology, history, and use cases. Some of the best resources are news outlets, newsletters, podcasts, and books. Some include:
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Bitcoin Billionaires Ben Mezrich
The Truth Machine: The blockchain and the future of everything
Michael J. Casey and Paul Vigna
The Bitcoin Standard: The Decentralized Alternative to Central Banking
Saifedean Ammous
Digital Gold Nathaniel Popper
The Internet of Money
Andreas M. Antonopoulos
CoinDesk
CoinTelegraph
Bloomberg
Fortune: The Ledger
MIT Chain Letter
John Lothian News
Off the Chain Anthony Pompliano
Unchained Laura Shin
What Bitcoin Did Peter McCormack
Base Layer David Nage
BOOKS
NEWS
PODCASTS
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1 GEMINI DOLLAR
—Bill Gates
"Bitcoin is a technological tour de force."
"Bitcoin is a remarkable cryptographic achievement and the ability to create something that is not duplicable in the digital world has enormous value."
—Eric Schmidt, Former Executive Chairman of Alphabet
Does the insurance cover offline storage or the online (hot) wallet?
Does the coverage address the wallets with the biggest amount of risk exposure?
How much of the underlying asset does your insurance cover in both offline and online storage?
If coverage is limited, how is it allocated in the event of a loss?
Why do we choose crypto?
"A great use case, in my opinion, is borderless payments. It doesn’t make sense that a first-generation immigrant, who is working really hard to send money back to their family in their home country, has to give up a significant portion of their earnings on transaction fees. With crypto, there is no middleman and that same person can send money directly to their loved ones without the fear of high fees and the logistical hassle."
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—Shriya Baddula, QA Engineer, Gemini
—Jamie Chapman, Product Manager, Gemini
"I love that crypto makes us rethink and deconstruct a widely accepted utility — money — and how we attribute value."
"I really geek out on the potential of crypto’s underlying tech and I can’t wait to see how it will transform the future of money and payments."
—Marcus Scala, Head of Design Tech, Gemini
Read on to learn more, and take a short survey that helps us learn more about why you choose crypto.
What else should I know about crypto?
Hackers continue to build sophisticated methods to target online accounts. One of the more common attacks is called SIM swapping.
A SIM swap occurs when an unauthorized individual tricks a mobile carrier into switching an existing phone number to a different device. By doing so, the unauthorized individual can intercept texts and calls meant for another person, including two-factor authentication (2FA) confirmations sent via SMS.
What should I do? To prevent this type of attack, consider switching to app-based 2FA such as the Authy app.
How can I help secure
my account?
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Can you tell me more about blockchain?
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Blockchain: A blockchain is a list of records, called blocks, that make up a public blockchain ledger. Each block includes transaction data and is linked to the previous block by a cryptographic hash, making it very difficult to reverse.
Blockchain Transactions: Transactions are continuously verified by a process called "mining" that verifies and adds transactions to the public ledger. Once verified, all transactions on the blockchain can be publicly traced.
How do blockchain and bitcoin work together?
Blockchain is the underlying technology that ensures the accuracy of accounting, and cryptocurrencies like bitcoin run on top of this technology.
What's the last takeaway?
Over the past 10 years, crypto has evolved from a single whitepaper to a global asset class. 2020 will be the #YearOfCrypto and we look forward to what's to come.
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"Within this decade, crypto will redesign the Internet, the financial system, and money in a way that fosters and protects the rights and dignity of the individual... When given the choice, you will choose more freedom, not less. And that’s why you, and everyone else, will choose crypto."
— Tyler Winklevoss
distance from a bank
lack of trust
Your Bridge to the Future of Money
10/31/2018
Bitcoin turns 10 years old valued at $6337.06
10/15/2019
October 15, 2019 'Satoshi' is Added to Oxford Dictionary. The price of bitcoin at the time was $8171.27