Bundil EDU: Let’s talk about crypto!

Bundil
4 min readJun 27, 2022

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Welcome to Bundil EDU! This is a series that we started to teach people about crypto and investing in cryptocurrency. Today we will be covering the history of cryptocurrency, how it works, and how to invest in it!

Crypto’s Origin Story

Cryptocurrency was first thought of in the 1980s, with the idea of being able to send currency to someone without it being traced and without the need for a bank. In 1995, David Chaum, an American cryptographer, created Digi Cash, an anonymous cryptographic electronic currency. This currency required you to withdraw from a bank and use encrypted keys before sending the money to a recipient. Then Bit Gold, a predecessor to Bitcoin, was created by Nick Szabo in 1998. Bit Gold required you to complete puzzles using computer power to receive the currency. The combination of these two creations would look similar to Bitcoin.

In 2008, Satoshi Nakamoto released a white paper named Bitcoin- a Peer to Peer Electronic Cash System. This paper covered how Bitcoin and its Blockchain would work. He mined the very first block on the bitcoin blockchain on January 3, 2009. For the first few months of its existence, Bitcoin had no value. But as time went on, Bitcoin started to grow and grow and is now worth roughly 20,000–50,000 depending on when you’re reading this.

The Creation of Crypto

Cryptocurrency has taken off and is now a very prominent topic. So how does the technology behind it work? Cryptocurrency is created through a process called mining. There are various cryptocurrencies that are mined differently. In the beginning, crypto was mined off of the blockchain. What do we mean by “mined?” Mining is a metaphor used to describe the computational work that happens when trying to earn new tokens (crypto). Miners, the people who run the computers are verifying the legitimacy of the Bitcoin transactions. Mining puts more Bitcoins into circulation to be purchased.

To gain Bitcoin, miners have to either be closest to the right answer or the right answer to a numeric problem. This is often referred to as proof-of-work. To mine, you must begin the proof-of-work process and find the answer to a puzzle. Once you find the answer to the puzzle you win the token (Bitcoin). Miners are rewarded a percentage of the token that they win.

How is crypto’s value determined?

Once the cryptocurrency is mined it is released into circulation for people to purchase. What determines the value of the token once it is released into the market? The value of cryptocurrency is determined by the supply and demand of the tokens you are investing in. Like with other things, if the demand increases faster than supply, the price will go up. Think of the toilet paper shortage at the beginning of the pandemic. The demand was higher than the supply; therefore, the price increased. Crypto follows this same rule and gains value with the demand is higher than the supply. Each cryptocurrency has its own method and rules for how many coins are in circulation. Some will “burn” crypto to ensure that inflation is where it needs to be. Burning means sending tokens to an unrecoverable address on its blockchain.

How to invest in crypto

There are various ways to invest in cryptocurrency! Some of the most popular ways to acquire cryptocurrencies are through Centralized Exchanges (CEX), Decentralized Exchanges (DEX), or you can automatically acquire cryptocurrency through platforms like Bundil. Centralized exchanges allow you to easily purchase your crypto by connecting a bank account and purchasing on their platform. However, being centralized, the exchange is run by a business and will take hefty fees when you purchase. Centralized exchanges, like Coinbase or Robinhood, also come with the risks of taking your crypto if they go bankrupt or close down in your country. On the other hand, Decentralized exchanges operate on blockchains and will never be able to take your crypto or have fees for their profit. They require you to come with cryptocurrency or stable coins to swap for other cryptocurrencies. Popular DEXs are Sushi Swap, Pancake, and Curve. They are known to be difficult to use, require your own third-party wallet, and take some of the crypto to cover transactions (gas) on their network every time you buy. With Bundil, you experience the lowest fees of any centralized exchange and can take your crypto whenever you wish! You can choose to automatically invest your spare change every time you make a purchase, set up recurring purchases, or make a one-time/recurring purchase whenever you choose!

If you are interested in seeing the power of your spare change, download Bundil on the App Store or Google Play!

We hope this article helped! Please reach out to support@enjoybundil.com if you have anything you would like us to cover. (there are no stupid questions!)

-The Bundil Team

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Bundil

Investing your spare change from card purchases into crypto!