When I was first asked to write a book about bitcoin, the price was hovering at about $3,000. As part of my research, I bought a little. By the time the book was finished, which was really only a matter of weeks, the price had risen to just a tad over $5,000.

One of the rules Dad always told us was that no one ever went broke taking a profit. So I sold, inking a tidy gain that nearly doubled my stake in short order.

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As the fonts in the bitcoin headlines grew larger and the verbs punchier, something interesting happened. Everywhere I went, my friends and family members wanted to know about the odd little esoteric technology. About what it was and how it worked. About how to get in on it, and how to make money

Then the phone rang. It was The Old Man. Our conversation was typical of what everyone seemed to want to know.

"Son, this computer coinbit thing," he began. "What all do you know about it?

"Dad, it's called 'bitcoin.' It's money based on complex computer programming. No one knows where it comes from or who invented it. The virtual coin is basically attached to a text file that's a ledger of sorts, where every transaction is posted and verified. Best of all, even though it's on a computer it's hackerproof - forced honesty is written into the software."

"When did you get it? What'd you pay?"

"When I was doing the book. I bought in at about three grand or so." I told him I sold at around $5,000.

"Oh, no. You sold it? Damn. Have you seen what it's worth today? It's at sixteen-five! How many did you have?"

I don't lie to my Dad. I told him.

"Oh, man. Do you know how much money you've LOST?" He sighed for effect.

"Hey, I'm not exactly fiddling on the deck of the Titanic here," I said. "I almost doubled my money in a coupla months without leaving this house or breaking a sweat. I seem to remember someone telling me those were GOOD things."

"Just let me know about these things before they're dead. We could've done something here." And with that, the call ended.

Bitcoin's Ride May Be Over, But Cryptocurrencies Are NOT Dead

To be clear, cryptocurrencies are not dead. They're still in the headlines and, happily, not for crashing the financial system, as some have feared.

That's the good news.

But as I mentioned during the Fast-Track Millionaire Summit , the bad news is that the (initial) big money already has been made. The notion that you'll be able to buy a bitcoin for a few thousand and walk away a short time later with $20K is just a pie-in-the-sky dream.

Heed what I'm telling you here: That IS NOT likely to happen. It's not in the realm of rationality.

Still, I do see a ton of exciting opportunities in the cryptocurrency arena. But there are some things you need to know. In this essay, I'll explain how to trade bitcoin -- it is different from other commodities or currencies -- and tell you a little about another digital currency that could go on to mimic bitcoin's rise.

Bitcoin: A (Very) Brief History

Bitcoin emerged as an alternative to fiat currency during the financial crisis. It was seen as a safe haven. Back in those days, the roster of troubled banks was ten times the normal level.

Against this backdrop, a form of transferable value wholly removed from the internal cabal of central banks, including the U.S. Federal Reserve, was greatly appealing.

No one knows who came up with bitcoin. The only hint has been a Japanese name, the equivalent of John Smith. But beyond that no one knows.

Though the bitcoin platform and the coding involved require serious computer hacker skills, the gist is pretty simple: You and I agree on a transaction. I send you a digital token. You receive it. This is posted to the blockchain, which shows every transaction. This transaction record gets ripped apart into a bunch of pieces of data and shaken up into huge randomized files. These data blocks are processed by tens of thousands of individual computers and are, eventually, put back together basically by trial and error using hundreds of billions of computer calculations. The bitcoin miner (operator of one of the computing nodes) who completes a block to add to the blockchain is awarded a bitcoin or part of one as a fee.

This is cumbersome, to be sure. But it is very secure. If the correct data doesn't fit so as to meet the unrelenting accuracy required by the software, it doesn't work. It is accurate and must be accurate, and therefore the system actively combats dishonesty -- dishonesty to a computer isn't morally wrong, it's just plain wrong -- and won't work. While it is possible that someone could physically steal a valid bitcoin code if, say, it was written down where someone could get it, there really is no way to "hack" bitcoin.

That notion of security, backstopped by a lot of high-tech computer mumbo-jumbo that most of us don't understand, made the idea of owning what amounts to digital currency backed by the market superior to fiat currency backed by a government. As that became more and more appealing, even and especially after the financial crisis had passed, the value of bitcoin began to rise.

Wallets: The Easiest Way To Buy

Wallet is crypto lingo for a software program or piece of hardware that "stores" your cryptocurrencies (in reality, all you're storing are the access keys to your portfolio). There are tons of choices and approaches out there: You can also buy flash drive-like devices that will manage your coins, use an online application, or even literally print them out.

But don't worry about all that.

The keys to success here are safety and ease of use, and that means Coinbase. It's the largest platform for owning cryptocurrencies. It has training and tutorials that can help newcomers; it has tools that can help professionals. Fees are competitive; the service and safety are top of the pack. Visit the Coinbase website to learn more.

Forget Traditional Analysis

Now, keep in mind that there isn't any fundamental analysis to do when it comes to bitcoin.

This is a commodity. It's subject to the whims of market demand and the even whimsier vacillations of investor psychoses. I mean psychology. Sort of.

In any case, nothing beyond those fickle factors backs up the value of bitcoin. There are macroeconomic and geopolitical forces that theoretically could move the value of bitcoin, but there are no fundamental factors, per se.

That leaves technical analysis, the idea that price patterns can be sussed out and leveraged to the trader's advantage. While trading using candlestick charts and algorithm-based quantitative programming does have its adherents, trading this way is a full-time job that requires significant capital.

If you want to trade for fun, to maybe buy the dips and sell back when the price stabilizes to eke out a few hundred basis points every other trade, that's your choice. I don't think this is wise for anything other than entertainment.

Instead, I recommend during the Fast-Track Millionaire Summit that discerning investors looking to speculate a little bit should instead spend their energies on finding the "next bitcoin."

A Promising Alternative

Now, keep in mind that "bitcoin" has morphed into a sort of shorthand for any digital currency. There are more than 1,300 cryptocurrencies out there, and the list is growing by the day. Some are more useful than others.

Right now, frankly, the whole digital currency space is still in its clunky infancy. That's fine. It means the party isn't over, and there's still a chance to hit it big.

I've got my eye on two things in this arena. One is the patent for a new technology called "overledger," which is essentially an elegant method to allow the various cryptos to talk to each other -- a common language that has the potential to knit them together and aggregate blockchain technology. Pay close attention to this . I'm not sure whether this new idea is the one that's going to take off, but it's a Steve Jobsian approach -- taking a very complicated technology and making it much easier to use.

The other is a cryptocurrency that's gaining some serious traction in mainstream circles. The protocol behind it is gaining acceptance from at least a hundred financial services companies already, including outfits like American Express.

It doesn't use miners to process transactions, so it's not 100% decentralized like most other cryptos. There are no forks that split the currencies, and all the tokens that exist are already out there. What's more, it has a LOT more bandwidth than bitcoin. Bitcoin's architecture allows for seven transactions per second. That's REALLY slow. This one, however, currently handles 1,500, and could scale to handle 50,000 (the same as Visa's network).

Now, this cryptocurrency can't be bought via Coinbase, but the process is similar. All you have to do is simply set up an account with Bitstamp or Kraken and buy it.

I should note, however, that the protocol behind this currency is somewhat unrelated. But the currency could be woven into this critical payment architecture, and that would create serious demand for these coins. That they will appeal and displace other cryptocurrencies is the bet here. I don't think I'd sell my house to buy it, but at its current pricing, around a buck, it's an easy addition to your growth-oriented investments.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.