If you’re like most people, you may have seen Bitcoin making headlines, a digital currency backed by no central government or precious metal. But then you ask yourself: “How can Bitcoin be real money?”

Money

I remember when I was a kid I asked my Dad where does money come from? He told me about the history of the gold standard and the Bretton Woods Agreement. “Banks create the money, well, actually the central banks do - they lend it to the banks who then loan it out to us at interest. Most of the money is not even in physical notes, about 90% of it is all digital!”

As a ten year old this was enough to make me stop asking questions. After all, everyone I knew had a bank account and the digital balance was real enough when it came out of ATMs in the form of polyester. But this notion that money was mostly digital stuck with me in my subconscious.

My experience of banks was that they were slow, inefficient and a ripoff for the crappy service they provide. I distinctly remember being pissed off at how unpredictable the timing of payments were and being hit with unreasonably high overdraft fees.

There was a story recently of a Grandmother shredding nearly one million euros of cash so her family couldn’t inherit it. Her family discovered the shredded cash after she died and appealed to the central bank. The central bank’s cashier division said:

If the heirs can only find shreds of money and if the origin of the money is assured, then of course it can all be replaced.

While this is good news for her family their now deceased Grandmother would be turning in her grave if only she knew! If only she used Bitcoin sending her money into a void address she could have rested in peace knowing her money was 100% lost, irrecoverable and guaranteed so by the laws of maths & physics.

This example shows that even cash is not yours to command, you’re not really in control of your money. Wish you could burn a few US dollars for that cool movie scene you planned? Sorry, that’s illegal.

Bitcoin

I first heard about Bitcoin on the phone when a mate called me up in a rage of inexplicable excitement. I was highly sceptical because making money by downloading a program from my computer sounded far too good to be true — and if it sounds too good to be true…

Well after this phone call, I put my scepticism to one side and curiously Googled for ‘Bitcoin’. I landed on the Bitcoin official page, saw the video and could immediately see the appeal of a digital currency that exists as an alternative to banking.

I followed the Bitcoin charts, mined new coins in a mining pool, bought a new computer with 2 state of the art double graphics cards and read article after article. In the few short weeks that followed my friend’s call, the price had increased by 620%; I was hooked!

Fast forward 5 years and I’ve worked a total of 9 months, studied, travelled and lived independently from the profits of speculating in digital currencies.

It wasn’t all fun and games though, having lost most of my bitcoins through unregulated crypto investments and carelessly neglecting computer security; getting hacked. But I’ve had a lot of fun and learned from these experiences and hopefully I’ll pass on some useful advice to you.

If you invest large sums of money in crypto-currency, please use a hardware device or insured service; your Internet connected device alone is not enough to prevent hackers.

Monero

Monero is Esperanto for ‘Coin’, which was likely chosen as this crypto currency’s name because regular coins are about the most commonly used fungible commodity by people today.

For the quick low down take a minute now to see CryptoAmanda run through a Monero transaction.

Coins are physical, but Monero is purely digital. Unlike central bank dollars however, Monero is not subject to unpredictable interest rates. We know how much the total money supply is now (10.1 million) and how much the total money supply will be (18.4 million) in 2025. Daily inflation is 0.11379% which is high enough that it keeps the price low, but its dropping every day.

If you’re more the physical coin collector and would rather buy silver Monero coins, you’re also in luck!

Unlike Bitcoin payments, Monero payments are not publicly traceable. It uses an entirely different code base called CryptoNote which features protocol level mixing, making it trust-less and easier than obfuscating Bitcoin funds.

Here’s your chance to set up a Monero wallet

https://mymonero.com/

Click ‘Create an Account’, write down your private login key onto paper with pen, store it in a safe place and confirm your random words by typing them in (or copy/paste if you’re confident you wrote them down exactly).

The volatility of this relatively new currency can be hard to stomach with the price recently fluctuating between 30 and 50 cents but it doesn’t worry me. I first found out about Bitcoin when it was $5 so I consider myself an ultra early adopter of Monero.

“How do I buy Monero?” you might ask. Well in order to buy any crypto-currency, you need to buy the mother of all crypto currencies — Bitcoin.

Buying bitcoins today is a walk in the park compared to its earlier years and there are a lot more reputable exchanges around now.

If your privacy is important to you, you may like to try face to face transactions using Local Bitcoins or visiting a Lamassu ATM if you’re lucky enough to live near one. If you’re happy to give up your privacy in return for the convenience of not meeting strangers, reputable exchanges (which require copies of your ID and proof of residence) include Coinbase, BitStamp, Kraken & Xapo or if you happen to be based in Australia, Independent Reserve or BTC Markets. Once you’ve got your bitcoins you’re ready to buy some Monero. The best place for this is an exchange called Poloniex.

Once you have some Monero, you can let it sit, learn more about it at the MoneroBase, or spend it at the few merchants that currently accept it — which includes a predominantly text based medieval role playing game with an in-game economy, a dice game (which you can also bankroll) and an inexpensive web developer (who offers a 10% discount when you pay in Monero).

A sure way to make your moneros increase in value is to offer your own services in exchange for them (and let us know about it in the forum!)

I’m currently offering to create completely original short pieces of electronic music which you can use for anything (YouTube videos, podcast music, running music, rap beat) — available at the modest sum of 3 XMR (the unit of Monero is abbreviated to XMR) — which is roughly $1.30 USD at current market rates.

If you do decide to make an investment in Monero, or are sitting on the fence, feel free to join our communities on Reddit, Facebook or the forums and talk to us!

If you enjoyed reading this and picked up some Monero as a result, I would be over the moon to receive some Moneroj tips:

41j4izJZQxVftRpH3EF1V5MMYmtY8FCAPHc3Q7MmM7YwVR1CugWskYeZWYaGfcXfWpEWBUV6KoMFoeikiLL4AcwBKeWLTzv