1stversion,7june2017

INVESTING101BLOCKCHAINTECHNOLOGY
PIETERSHIFFLER

Investingin
BLOCKCHAINTECHNOLOGY
___

ByPieterShiffler

INTRODUCTION
Oftencalledthenewinternet,blockchainisarevolutionarytechnologythatwasinitially
designedtocreateadigitalmonetarysystemcalledBitcoin.Sincethenithasevolvedinto
somethingwaybiggerasthetechcommunityisdiscoveringnewpossibilitiesforthe
technology.

Inthisguideyouwillfindoutaboutthebasicsofthetechnologyandwhyandhowyoushould
investinit.

Donationswelcomeat

ETH 0x38d92FF9D212736A19486936ed8fD3e4e379e29a
BTC 12mhhauvN3fk8dyeKxFdzVBE1SZVHZAs35

Forquestionsorfeedback,mailmeat

schiffeleerspieter@gmail.com

Tableofcontents

1. Whatisblockchaintechnology? 4

2. TheRiseofBitcoin 6

3. Ethereum,arevolutionwithinblockchain 8

a. GolemProject 10

b. WingsDAO 11

c. MysteriumNetwork 11

d. Otherprojectstokeepaneyeon 12

e. Greatinformationalsources 12

4. HowdoIstartinvesting? 13

a. Holdingactualcryptocurrencies 13

b. Tradingononlineinvestmentplatforms 15

5. Thankyou 16

Chapter1

Whatisblockchain
technology?
Itsadatabasethatstoresacopyofitselfoneverycomputerinitsnetwork.Thisnetworkis
designedtoupdatethedatabaseonaregularbasis.

Pictureaspreadsheetthatisduplicatedthousandsoftimesacrossanetworkofcomputers.Then
imaginethatthisnetworkisdesignedtoregularlyupdatethisspreadsheetandyouhaveabasic
understandingoftheblockchain-blockgeeks.com

Becausetheinformationintheblockchainisdistributed
oneverycomputerornodeinthenetwork,thereisno
singlepointoffailureandthereisnosingleentitythat
controlstheinformation.Thismeans,unlessyoushut
downeverycomputerinthenetwork,informationcannot
getlostoraltered.Thismakesittrulytransparentand
corruption-proof.

Okay,thatsoundsveryfancyandall,butwhatcanitbe
usedfor?Letstakealookatsomeexamplestogetthings
clarified:

Facebookisacompany,whichmeanstheyownalltheinformationstoredontheir
databases.Everypicture,video,noteorpieceoftextyouposttofacebookisactually
ownedbythemandnotbyyou.Thismeanstheycantakeyourthingsandusethemfor
theirownbenefit.Theycantakeyourpicturesandvideosandsellthemtosomeoneelse.
Theycantakeyourpersonalinformationandgiveittoothers.Thisisaclassicexample
ofacentralizednetwork.
Asocialnetworkbuiltonblockchain,wouldnotworkinthisway,becausethe
informationwouldnotbeownedbyanyoneotherthanyourself.

Thesameprinciplesapplytobankinginstitutions.Whenyouhaveyourmoneyona
bankaccount,youareactuallygivingthebankafreepasstodowhatevertheylike,with


yourmoney.Ifhypotheticallythebankmakessomebaddecisionsandgoesbankrupt,
youcouldloseallyourmoney.Ontopofthatyouarepayingallkindsofexpensivefees,
forowningabankaccount,forsendingmoneytoothers,etc.Thesefeesareasourceof
incomeforthebankandispartofwhatpaystheiremployeesandbosses.
Onblockchain,youarethesoleownerofyourassetsandfeesareincrediblycheap-
becausenobodytakesashareoftheprofit.Itonlypaysfortheenergyneededto
completethetransaction.

Letssayaself-drivingcarprogramisbuiltoncentralizedservers.Thecarsneed
constantfeedbackfromtheseserverstofunctionproperly.Theyneedtraffic
information,roadinformation,itdefinesthataSTOP-signmeansthatthecaractually
shouldstop.Suddenly,thecompaniesserversgethackedandsomechangesthe
information.ASTOP-signnowmeansaccelerate.Seetheproblemhere?
Builtonblockchainthiswouldneverbeaproblem,becausetheywouldneedtochange
STOPonallcomputersinthenetwork,simultaneously.

Nowthatyouhaveabasicunderstandingofblockchain,andthepotentialithastorewritehow
computer-andfinancialsystemswork,letstakealookatwhereitcamefrom.

Chapter2

TheriseofBitcoin
Traditionalcurrenciesliketheeuroorthedollarareownedbycentralbanksandgovernments.They
cancreatenewmoneyatwill,whichinfluencestheprice.Thatsexactlywhathappenedinthe
~2007bankingcrisesthatdevastatedeconomiesaroundtheworld.Bitcoinwasdesignedasanew
monetarysystem,freefromthiskindofcorruptionand
manipulation.

Itallstartedin2009whenbitcoin,adecentralizeddigital
currency,wasproposed.Onenotownedbyanycentral
organisation,whichmadethemimpossibletocounterfeitor
inflate.Youcouldsendthemtoanyone,whereveronthe
planetforverylowcostsanditthetransactionwouldhappen
almostinstantly.Thepaymentscouldntbeblockedand
walletscouldntbefrozen.

Therewillonlybe21millionBitcoins,ever,whichmakesBitcoinkindoflikeaclumpofgold.
Thereisalimitedamountavailableandthemorehasbeenfound,theharderitistofindnew
ones.NewBitcoinsarefoundorminedbypeoplewholendtheircomputerpowertothe
Bitcoinnetwork.

ThevalueofaBitcoin(BTC)
Thefirst2yearsafteritsbirthin2008,Bitcoinreallydidnthavealotofvalue.In2010that
drasticallychanged,byapril2010oneBitcoinwasworth$0.003.Nowimaginewebought$100
worthofBitcoinbackthen,givingusatotalof33,333.33Bitcoins.

Byjuly2010,oneBitcoinrosetoavalueof$0.08/Bitcoin.Doingthemath,these$100worthof
Bitcoinwerenowworth$2600.Notabadinvestmentright?

Byfebruari2011,thevalueroseto$1/Bitcoin.Yourcoinsnowholdavalueof$33thousand.
AroundthistimeinvestorsfromallovertheworldstartedtakingnotetoBitcoin.

Itmanagedsomuchattention,thatbyjuly2011,thevalueroseto$31/Bitcoin.YourBitcoin
arenowworth$1million.Becauseinvestorsnowstartedcashingout,itcollapsedbackto


$2/Bitcoinacoupleofmonthslater.Thismeantalotofpeoplewhoboughtinathigherprices
nowlostalotofmoney.PeoplewerefreakingoutandcallingBitcointohighofariskanda
failinginvestmentbecauseofitscrash.Butbitbybititstartedclimbingagainuntilitreached
$266.Thenthesamethinghappened.Itcrashedbackto$100.

Soonitstartedclimbingagain,whilerepeatingthesamepatternofasuddenriseinprice
followedwithacrashsoonafter.Today,the7thofjune2017,oneBitcoinisworth$2800.If
youheldyourBitcoinsoverthoseyears,youwouldnowownaround$95millionworthof
Bitcoin.

ExpertsbelievethatBitcoinstillhasalotmorepotentialandcouldrisetoasmuchas
$10thousandoreven$100thousandperBitcoin.Itisstillnottoolatetoinvestsomemoney
intoBitcoin,evenjustafewhundreddollars.


Chapter3

Ethereum,arevolution
withinblockchain
ShortafterthecreationoftheBitcoinblockchainothersstartedseeingthepotentialofthis
technology.Soonmanydifferentblockchainprojectsstartedpoppingup,eachwiththeirown
uniquefunctionsanduses.Thetechnologyhasfounditswayinmanydifferentfields:the
financialworld,artificialintelligence,cloudcomputing,documentsharing,justtonameafew.
Theaddedtransparencyandsafetyagainstcorruptionistakingoverhowweshareinformation.

Inthischapterwewillbelookingatthemostpromisingprojectbeingdevelopedrightnow.

TheEthereumNetwork(ETH)
Website:https://www.ethereum.org/

Imgoingtostartoffwithaboldstatement.Ethereummightbethe
biggestrevolutioninhumanitysincetheinternet.Thatisaprettybold
statement,Iknow.ButsittightwhileItrytoexplainwhyithassomuch
potential.Ifyouneededtorememberonepartofthisbookletinparticular,
thiswouldbetheone.

Allright,sowhatisit?

Ethereumisadecentralizedplatformthatrunssmartcontracts:applicationsthatrunexactlyas
programmedwithoutanypossibilityofdowntime,censorship,fraudorthirdpartyinterference
-ethereum.org

Nowreaditagain.Maybeevenathirdtime.Whatdoesthismean?Well,letstakealookat
someexamples:


1. Iwanttobuildanonlinevotingplatformformycountry.Onthisvotingplatform,
everycitizencanvoteexactlyonce.Fakevotescannotbecreated.Wecantrackthelive
progressionofthevote.Nobodycanmesswiththeresults.Itisfullytransparent.

2. Iwanttomakeanonlinelottery.Therewillbe1winnereverymonth,whichwillwin
80%ofallprofits,therewillbe5otherwinnerswhowillshare10%ofallprofitsandthe
last10%goestocharityX.Thesewinnerswillbeselected
automaticallyandnobodywilleverbeabletochangethat.
Theonlinelotterywillneverbeabletocheatandnot
selectawinner.Themoneywillautomaticallybepaidto
thewinnerandthiswinnerwillneverbepublically
announced.

3. Anonlineinvestmentplatformemerged.Icanmakean
investmentofXdollars,foranYamountoftimeandit
willautomaticallysellassoonasthevaluedropsorrises
byZ%.Theonlineinvestmentplatformwillkeep1%ofprofits.

4. AnEthereumbasedsocialplatformisbuilt.Yourinformationwillalwaysbeownedby
you.Deletingyourpictureswilldeletethemforever.Thecreatorofthesocialplatform
canneversellyourinformationtoadvertisers.Yourmessagescanneverbeaccessedby
anyoneotherthanyou.Youcanselecttoauto-deleteyourmessagesXamountoftime
aftertheyhavebeenreadbytherecipient.

Thepossibilitiesarenearinfiniteandabunchofexcitingprojectsarealreadystartingtotake
shape.UnlikeBitcoinitdoesnotonlytakebackownershipandtransparencyinthefinancial
world,ithasthepotentialtotakeitbackinamultitudeofdomains.Ontopofthat,Ethereum
makesitalotcheaperandmoreefficienttodothings.Letstaketheexampleofthevoting
system.BecauseitisbuiltontheblockchainIdontneedtopayanyonetocountvotes.Idont
needtogatheralltheinformationonacentralcomputer,wenowdontneedtobuyexpensive
computersandservers.Peoplecandoitfromtheirhomeinamatterofminutes,theydont
needtogotospecificvotingofficesandwastealotoftime.Andsoon.

ManyarecomparingEthereumtoBitcoinasMyspaceiscomparedtoFacebook.Bitcoinmighthave
beenthefirstofitskind,butEthereumtakesthesametechnologytoawholenewlevel.


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ThevalueofoneEther

EtheristheunderlyingcurrencyusedintheEthereumNetwork.Tovalidatetransactionsonthe
EthereumNetwork,anamountofEtherisused.Thesefeesaretherebecauseoftheenergyand
computationalpowerusedandtoensuretransactionsarelegit.Thesefeesareincrediblysmall
andthetransactionsareprocessedevenfasterthanBitcoins.Butletsnotgetintothetechnical
detailsofhowthisworks.Iwillleavethattoyoutoresearch.

ThevalueofEthereumisfollowingatrendsimilartothatofBitcoin,veryvolatilewithalotof
sharprisesanddropsinprice.InjanuarythisyearoneEtherwasworth$10.Injune,5months
later,itisnowvaluedat$260/ETH.In5monthsaninvestmentof$100wouldnowbeworth
$2600.

TheEthereumProjecthasaninsaneamountofpotentialandisstillinearlydevelopment.Itis
stillnottoolatetohoponthetrainasitisexpectedtoovertakeBitcoininthenextcoupleof
years.Justmakesureyoudontpanicwhenthevaluedrops,becauseeventuallyitwillgo
throughtheroofagain.JustbuyyourselfsomeETH,forgetaboutthemforacoupleofmonths
andseeanicereturnofyouroriginalinvestment.

ExcitingprojectsarealreadybeingbuiltontheEthereumNetwork

AbunchofstartupsarealreadyusingtheEthereumNetworktobuildnewDecentralized
Applicationsorshort,DApps.Letstakealookatsomeofthemostpromisingprojects.

GolemProject(GNT)
Website:https://golem.network/

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Golemmightbethesecondmostpromisingprojectbeingdevelopedrightnow.Golemwill
connectcomputationalpowerfromallcomputersthatareconnectedtoitsnetwork.Thismakes
itanenormouslypowerfulsupercomputer,thatcandothingsmuchfasterthanasimple
computer.Letssayyouneedtorenderavideo,whichwilltakeapproximately1hour.Withthe
GolemNetwork,thiswilltakeonlyamatterofseconds.Canyoualreadyimaginethegigantic
amountofotherwaysthiscanbeused?

WingsDAO(WINGS)
Website:https://wingsfoundation.ch/

ProjectsbeingbuiltonblockchainarecalledDAOsorDecentralizedAutonomous
Organizations.Wingsisaprojectfundingandgovernanceplatformtohelpyoudevelopyour
ideas,fundthem,getfeedbackfromstakeholdersandputthemtolife.Itusesatechnology
calledSwarmIntelligencetoforecastthesuccessofyourideasandmilestones.Inshort,the
ultimatetooltohelpyoudevelopthebestprojectpossible.

MysteriumNetwork(MYST)
Website:https://mysterium.network/

MysteriumisaVirtualPrivateNetwork(VPN)serviceonthe
blockchain.AVPNhidesyourinternetactivityfromanyonetryingto
stealoruseyourbrowsinghabits.Itallowsyoutoevadecensorship
andovercomegeographiclocationdependentservices.Youcan
watchNetflixfromanywhereintheworldorbuyairlineticketswith
localprices,orvisitwebsitesthatwereblockedinyourcountry.


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Otherprojectstokeepaneyeon
Therearesomanygoodprojectsavailablerightnow,thatitwouldtakemeagestolistthemall
here.HeresaquicklistofotherprojectsIamkeepingmyeyeson.

AragonNetwork(ANT)-DAOprojectmanagementplatform
SwarmCity(SWT)-peer-to-peermarket(uber,AirBnB,)
WeTrust(TRST)-Insuranceandlendingservice
Mona.co(MCO)-CryptocurrencyVISAcard,beyourownbank
Iconomi(ICN)-Assetsmanagementplatform
Gnosis(GNO)-Predictiontool(weatherforecasting,investmentforcasting,)
Augur(ANT)-similartoGnosis

Non-Ethereumprojects

AlloftheprojectsabovearebuiltontheEthereumNetwork.Belowareprojectsthatarebeing
builtontheirownnetwork.Abigpartofthecryptoworldbelievestheydonthaveasmuch
potentialasEthereum-basedprojects,itsneverabadideatokeepaneyeonthemanyway.

Ripple(XRP)-bankingcryptocurrency.
Warning:Rippleisbeingheavilysupportedbythebankingindustrytotryandkeep
ownershipofmoney.Theywouldratherkeepitintheirbanksthanletcommonpeople
takebackownership.AlthoughIpersonallydonotsupportthis,Istillholdasmall
percentagejustincasetheywinthefight.
Litecoin(LTC)-liteandfasterversionofBitcoin
Stratis(STRAT)-prettymuchanEthereumripoff
Waves(WAVES)-platformthatallowsyoutodigitalizeassets
Stellar(XLM)-similartoRipple
...

Greatnewsandinformationsources
EthereumonReddit-greatsourceforcryptocurrencyrelatednews
CoinMarketCap-listofcryptocurrencystatisticsandgraphics
EthereumFacebookPage-informationalpage


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Chapter4

HowdoIstartinvesting?
Therearetwowaysofinvestingincryptocurrency.Thefirstoptionisbuyingtheactual
cryptosandkeepingthemonaWallet.Thesecondoptionisbyspeculatingonfluctuations
intheirpriceontradingplatformslikeeToro.Bothoptionshavetheirownbenefitsand
disadvantages.

PersonallyIamholding90%ofmyinitialinvestmentinactualcryptosand10%oneToro.
Withthe10%oneToroImakehighriskinvestmentswhereIrisklosingabigpartofthemoney
Iveinvested.Thisisbecausetradingplatformsworkwithautomaticstop-losseswhenthe
valuedrops.IuseeTorotoinvestinshortterm(fromonedayuptoaweek)andthenreinvest.
Holdingactualcryptosisslightlysafer,becauseyoucanjustrideoutthewaves.Iwillholdmy
actualcryptosforamuchlongertimeofminimumayearupto10years.

Holdingactualcryptoassets
Step1 FindingaWallettostoreassets

Step2 Buycryptosonanexchangewebsite

Step3 Transferthecoinsfromtheexchangetoyourwallet

Step4 Sellingyourcoinswhenyouarehappywiththeprofits

Step1 Findingawallettostoreyourcryptos

Therearemanydifferentwalletsavailable.Everywallethasitsup-anddownsides.Some
walletsallowyoutoonlyholdEthereumbasedassets,othersallowyoutoholdmanydifferent
assets.Iwillleavefurtherresearchuptoyou.Takenotetofolloweverywalletsinstructions
verycarefully,whenyouloseanypasswordsyourwalletwillbelockedforever.Always
storethemoffofyourcomputer.Personally,Iamusingthese2wallets:

MyEtherWalletforallofmyEthereum-basedcryptos
Jaxx.ioforalmostallmyothercryptocurrencies


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Step2 Buycryptosonanexchangewebsite

Nowyouaresettobuytheactualcryptos.Thereareseveraldifferentbrokingwebsiteswhere
youcandothis.Usually,ittakesawhiletogetstarted,becausetheyrequireyourlegal
informationtogetverifiedandremovedepositlimits.Isuggestusingthefollowingbrokers:

BitPanda(personalfavorite)
Coinbase

OnCoinbasetheyonlysellBitcoin,EthereumandLitecoin.OnBitPandatheyonlysellBitcoin,
Ethereum,LitecoinandDash.Youcanthenuseacryptoexchangetoexchangethemtothe
otherassetsyouwouldliketohave.Rememberthatdifferentcryptosrequiredifferentwallets!
Therearecurrentlytwogreatexchangewebsites:https://shapeshift.io/and
https://changelly.com/.

Thetwolinksabovearemypersonalreferrallinks.Ifyouusetheselinkstoregisterandbuy
yourcryptos,wewillbothgetabonus!OnCoinbasewebothgeta$10bonusonyourfirst
transaction.OnBitPanda,Iwillgeta$2.5bonusonyourfirsttransactionand5%onallother
transactionsyouevermake.Whenyouhaveregisteredontheirwebsites,youwillreceiveyour
ownpersonalreferrallink.

Iwouldgreatlyappreciateit,ifyouusedtheselinksasathankyouforthisfreeguide.Other
donationsarealwaysappreciatedaswell.

Step3 Transferthecryptosyouboughttoyourwallet

Neverholdyourcryptosontheseexchangewebsitesforextendedamountsoftime!Theyare
waymorevulnerabletohackingthanawallet,becauseyouraccountinformationisstored
online.Onawallet,yourinformationisneverstoredonline(unlessyoudothatyourself).

Step4 Sellingyourcoinswhenyouarehappywiththeprofits

Transferyourcryptosbacktooneoftheseexchangewebsitesandexchangethemforyour
preferredcurrencyandthenrequestadeposit.


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TradingonplatformslikeeToro
IwillnotwritetoomuchabouttradingoneToro,becauseIhavewrittenashortguideonhow
thisplatformworksbefore.Youcanfindthesewritingsrighthereonmyblog:
http://wayofthenomad.dk/financial/investing-in-your-future-and-freedom/

Again,thelinkaboveisapersonalreferrallink,whichmeansifyouregistertoeTorothrough
thislink,wewillbothgeta$20bonuswhenyoumakeyourfirstdepositofminimum$200.

16

Thankyouforreadingmy
ebook

Ihopethisguidewasusefultoyouandwishyouthebestofluckwithyourfutureinvestments.I
wouldgreatlyappreciateanyfeedbackandwouldlovetohearaboutyourinvestmentsuccesses.
Youcanwritemeamessageonfacebook,orsendmeane-mailat
schiffeleerspieter@gmail.com.

Forthoseinterested,youcanjoinmyfacebookgroupNomadInvestors,whichIwillbeusing
toshareinformationoninvestmentopportunities.

Andremember,donationsinBitcoinandEthereumareverymuchappreciatedontheadresses
below:

ETH 0x38d92FF9D212736A19486936ed8fD3e4e379e29a
BTC 12mhhauvN3fk8dyeKxFdzVBE1SZVHZAs35

Thankyouforreading,

Pieter