The Beginner's Guide to the World's Most Disruptive Money

More from Eric Wade... Those 'bitcoin pizzas' would cost $1.2 billion today... The basics of cryptocurrencies that you need to know... What are they good for?... How to spot the next big winners...

Editor's note: Today, we bring you another guest essay from our friend and Crypto Capital editor Eric Wade...

On Monday, Eric wrote to you about a development in the cryptocurrency space that, put simply, could reshape wealth creation as most Americans know it... and we alerted you about a trading opportunity Eric says could be the biggest of his career. 

And yesterday, we mentioned a new executive order from President Donald Trump instructing the Labor Department and other agencies to develop guidance for firms for making "alternative assets" like cryptocurrencies available in all 401(k) plans.

Cryptos certainly have come a long way from bitcoin's early days... when one crypto owner swapped 10,000 bitcoin (worth $41 then) for two Papa John's pizzas. That was in 2010.

In the past few years, cryptos have become mainstream investments. Bitcoin trades for around $120,000 today. At a cost of 10,000 bitcoin, those pizzas would go for roughly $1.2 billion now. (We're expecting Eric to share more about the pizza story in this weekend's Masters Series.) More importantly, more and more use cases for digital currencies and projects have emerged.

As Eric wrote on Monday, the U.S. even "has its first pro-crypto administration" in the White House.

But we know a lot of people are still skeptical of the whole crypto sector, don't understand the appeal of cryptos, or do understand it but still think it's not for them.

That's where today's essay comes in...

Adapted from Eric's multiday Digest series that originally ran back in 2019, it answers the most pressing and frequently asked crypto-related questions he has received over the years. It provides a foundational understanding of what cryptos really are and how to profit from them.

Read on to learn what a crypto is (the short version)... what sets cryptos apart from traditional currencies... how to separate incredible crypto opportunities from the junk... plus more about a story that he says could be one of the biggest money moves in history.

You've probably heard a lot about cryptocurrencies...

Bitcoin – the original and oldest cryptocurrency – went on a tremendous run in 2017, soaring roughly 2,000% in less than a year... peaking at nearly $20,000 that December. But then, just as quickly, its value plunged more than 80% throughout 2018.

It went through another similar run in 2020 and 2021. In the midst of the COVID-19 crash, bitcoin fell to a low of $4,106.98. Then, it rallied for almost two years, peaking at a then-all-time high of $69,044.77 in November 2021. All told, it gained 1,581% in that time span.

And it appears the world's most popular crypto is in the middle of another historic run. Bitcoin has been trading above $110,000 since early July, good for a more-than-600% gain from its lows around $16,000 at the start of 2023.

Today, you can now get exposure to bitcoin through exchange-traded funds ("ETFs").

It's a hot-button topic in financial circles...

The crypto space is full of fantastic opportunities. However, many individual investors simply don't know how cryptos work – or what they're good for.

So in today's essay, I (Eric Wade) will answer several common questions to help you better understand this space. If you want to make money in cryptos, you need to know the basics first...

What is a cryptocurrency?...

It's a long-running joke in the industry that the hardest thing about cryptocurrencies is explaining them in less than an hour. It's a complex topic, but here's my one-sentence definition...

A cryptocurrency is a computer program that makes digital coins and tokens that anyone can use over an extremely secure network.

At their heart, they're computer programs – or teams of computer programs that all work together.

Bitcoin – which you'll often see written as "BTC" – is the best-known crypto and the easiest to understand... Physical "bitcoins" don't exist. You can't hold them. Bitcoin is simply digital money that isn't controlled by a government, group of people, or corporation.

One part of the bitcoin computer program allows the safe transfer of coins from one investor to another. That should make sense... If you're going to use bitcoin as a currency, you need a way to send and receive them.

Another part of the program watches every transaction, making sure no fake or fraudulent transactions take place before they're verified. Since we're talking about hundreds of millions – and sometimes billions – of dollars in bitcoin exchanging hands every day, preventing fraud is important...

It's like if credit-card company Visa (V) suddenly announced that anyone in the world can download its software and start verifying its transactions in exchange for a cut of the fees. That's how the bitcoin computer program works... Anyone can run the program and even verify transactions for a cut of the transaction fees.

Yet another part of the bitcoin computer program works like a ledger, keeping a permanent record of all the transactions. The ledger is like bitcoin's accounting books... It's a public list of all the bitcoin transactions that have ever happened.

For example, if Alice pays Bob for a service with bitcoin, it's recorded in the ledger for both people. But not only that... It's also recorded in the ledger for Carl, Debra, and anyone else who runs the bitcoin program.

(Of course, that's a simple explanation, because people's names aren't used on the bitcoin network. Instead, the ledger uses unique bitcoin addresses... They're like super-long phone numbers.)

You'll commonly hear this ledger called a "blockchain."

The blockchain was one of bitcoin's biggest innovations. Since every transaction is public, it can be verified by anyone else within minutes in most cases. While every bank in the world shuts down and reconciles its database with other banks every night, bitcoin runs 24 hours a day.

The word "crypto" comes from bitcoin's super-strong cryptographic code... In other words, it's the same type of secret code used to protect highly classified government information.

The code makes sure the bitcoin network and the ledger stay secure... Alice doesn't want Bob to be able to steal from her – or to even guess her password. And no one else wants the database to be manipulated... So they're all protected with the secret code.

With cryptocurrencies, all these pieces of the puzzle work together to make it possible for us to buy, sell, and transfer them safely... even though no one is in charge.

That's right... No central party – like a bank or government – is in charge of bitcoin. It's why you'll often hear cryptos like bitcoin referred to as "decentralized."

The blockchain has spurred radical innovation in nonfinancial industries, too...

For example, some cryptos can be used to transfer virtual items in video games. Others track pharmaceutical drugs from their raw ingredients all the way to a hospital bed... help build artificial-intelligence networks or insurance marketplaces... and countless other uses.

In short, cryptos are already touching almost every industry on the planet.

OK, so I know bitcoin is a crypto. But what other cryptos exist? And how many does the world really need?...

Yes, bitcoin is a crypto. And at least for now, it remains the biggest and most popular.

But after bitcoin launched, all sorts of entrepreneurs dreamed up ways to make their own cryptos with different features than bitcoin...

For example, Ethereum (ETH) supports "smart contracts," which enable automatic financial transactions.

Bitcoin is extremely strong – some experts say it can't be hacked – but it's also pretty slow when it comes to verifying transactions. Imagine if you're buying groceries... Instead of swiping your card and being approved in seconds, it can take minutes – or hours, in rare cases – for bitcoin to verify a transaction. So faster cryptocurrencies were developed.

Also, in recent years, other cryptos came along that can better protect your privacy by hiding information about your transactions. And others added specific features like a built-in programming language or "programmable money." That unlocks the potential for automated financial transactions...

Imagine, for example, if you only had to pay for insurance when you were physically driving your car. Thanks to smart contracts – financial transactions that don't require human intervention – that day will come. Smart contracts are impacting everything from the lending industry to prediction markets to robotics and more.

Other cryptos target specific use cases. Called "utility tokens," they grant the holder certain privileges... for instance, voting rights or access to a specific service.

We're also seeing more "security tokens" emerge... They're similar to stocks and can do things like pay dividends, include embedded financial reports, and more.

You can find nearly 20,000 cryptos in the world today. And the short answer to the final question above is... It's hard to know how many cryptos we actually need in the world.

You see, of the tens of thousands of cryptos that exist, we only like a few dozen or so right now.

Some cryptos are designed to serve as currencies, like bitcoin.

But as I said, many cryptos have been created to complete company-specific tasks or other narrow-focused ones... These tasks can range from tracking real gold to verifying data to even proving you're old enough to purchase alcohol without sharing your personal information.

This year and beyond, we expect to see these specific use cases soar.

And frankly, some other cryptos are simply worthless products from crafty computer programmers who are just trying to cash in on the popularity of this exciting industry.

With that said, teams of entrepreneurs trying to solve problems and improve industries are also building cryptos. You can find cryptos for banking, advertising, voting, investing, betting, making music, tracking our food supply, verifying art... and hundreds more uses.

So while we have a narrow focus on certain cryptos we like today, that could change in the coming months and years as some of these new, innovative cryptos prove their value.

Openness is one of the core values of the crypto industry...

Most crypto transactions can be verified by anyone, anywhere, at any time. And this idea of openness extends to the computer code used to create a particular crypto.

Most of the time, the developers of a crypto release their code for free (under what's known as an open-source license). That means anyone can take a crypto's code, copy it, modify it, and release it with a different name. This openness has pros and cons...

On the downside, it leads to a lot of copycat cryptos that don't do anything unique. But on the other hand, coders can build upon and leverage the work of others. That has led to radical innovation in the space.

While we have thousands of cryptos in the world today, we believe there could be millions one day. Moving between them will be seamless, instant, and free (or nearly free). And in many cases, end users might not realize a crypto or blockchain was involved in their transactions at all.

But even though investors now have so many cryptos to choose from, bitcoin has remained popular because it aims to be a very "hard" form of money. Eventually, bitcoin will have zero inflation, which appeals to a lot of investors. You see, bitcoin's supply is finite...

Eventually, we'll have 21 million bitcoin in the world and no more. That's how bitcoin's founder programmed the network... And it means that's all that can be created.

That makes it very scarce. And the cryptographic code we talked about earlier assures bitcoin buyers that no one will ever water it down in the future.

What if I just own a few bitcoin and don't worry about all the other cryptos?...

If you were only going to pick one crypto to invest in... it should be bitcoin, hands down.

It's the oldest, biggest, strongest, and best-known crypto. And in fact, we always recommend crypto investors maintain bitcoin as their single-largest crypto investment.

But it's also just scratching the surface of the potential gains you could see...

Many investors buy some bitcoin and start to learn about the broad choices of other cryptos available in the world. Then, they start to see the appeal of some of these cryptos. One of our main goals in Crypto Capital is finding tiny cryptos before they become big cryptos...

For instance, we discovered one crypto that's committed to fixing problems with online advertising. And they're big problems for many people, too... Websites track our every move and sell that data to the highest bidder, for example. Many folks don't like that.

So an entrepreneur who previously invented one of the most popular Internet browsers in the world created a crypto that can protect your privacy while improving your online-browsing experience. At the same time, you can use this crypto to support the creative people who make all the websites and videos that you love to use and watch.

This is only possible with the power of crypto... So we believed it was worth looking at. It gave investors an opportunity to get in on the ground floor of an exciting new technology.

It's also a lot easier to find a crypto that's worth, say, $10 million that has the potential to quickly rise to $100 million than it is to find one worth $100 million that will quickly rise to $1 billion. That's how we've seen returns of 1,000% or more in as little as a year.

How do you separate cryptos poised for success from ones that are junk? What qualities set good cryptos apart from others?...

It doesn't matter what sort of investing you're doing – from stocks to venture-capital opportunities to real estate to cryptos...

Putting time and effort into your research is always the best way to outperform the market.

Your data and ability to identify trends must be better than the market's. That's why we travel the world to attend crypto conferences in good times... and why we participated in virtual conferences during the COVID-19 pandemic. We make it a point to talk directly to founders and try out every new product we can get our hands on.

The qualities of a great crypto project aren't much different than what I looked for in stocks when I worked as a financial adviser at one of Wall Street's biggest firms...

First, you need a stellar founding team. You also need a product that can truly go global. And you need great economic incentives (what we call "tokenomics").

Cryptos have some unique factors that we should consider, too...

Decentralization, for example, is key. Remember, decentralization means no central party – like a bank or government – is in charge.

We want to see a crypto with hundreds or thousands of computers running its software in a lot of different countries. We also want to see a thriving community of users, contributors, and advocates for the project.

When all of these things align for a small, unknown crypto... you could potentially make life-changing gains from just a small investment.

Editor's note: We don't think you'll find a better crypto guide than Eric.

As today's essay demonstrates, he can explain the basics to anyone. And as Eric's Crypto Capital subscribers know, he also provides deep research into little-known cryptos that can deliver staggering gains.

You can see his Hall of Fame winners at the bottom of our daily Digest e-mail.

Eric has delivered more 1,000% winners than anyone else in Stansberry Research's 25-year history... And right now, he's sharing all the details of another rare chance to make 10 times your money, or more, but you must act soon.

Eric explains everything in this brand-new free presentation that he debuted just yesterday. In short, he says the U.S. government could soon launch the "Biggest Trade of All Time," spearheaded by a powerful billionaire who works in the White House...

It could happen as soon as next week, so Eric is getting the word out now to anyone who will listen.

You'll hear about the radical financial move underway in Washington... where Eric sees insiders moving their money now... and the name of a free recommendation that Eric believes could deliver 10 times your money, or possibly more, from here. Again, click here for those details now.

(And for Eric's existing Crypto Capital subscribers and Stansberry Alliance members, feel free to watch Eric's new briefing... But know that you also have access to this information and all of Eric's research here.) 

New 52-week highs (as of 8/12/25): Arista Networks (ANET), Broadcom (AVGO), Barrick Mining (B), Alpha Architect 1-3 Month Box Fund (BOXX), WisdomTree Japan SmallCap Dividend Fund (DFJ), Dimensional International Small Cap Value Fund (DISV), DXP Enterprises (DXPE), Electronic Arts (EA), iShares MSCI Emerging Markets ex China Fund (EMXC), iShares Ethereum Trust Fund (ETHA), iShares MSCI Italy Fund (EWI), iShares MSCI Spain Fund (EWP), Cambria Emerging Shareholder Yield Fund (EYLD), FirstCash (FCFS), Comfort Systems USA (FIX), Franklin FTSE Japan Fund (FLJP), Cambria Foreign Shareholder Yield Fund (FYLD), VanEck Gold Miners Fund (GDX), VanEck Junior Gold Miners Fund (GDXJ), Kinross Gold (KGC), Lumentum (LITE), Lynas Rare Earths (LYSDY), Altria (MO), OR Royalties (OR), Pan American Silver (PAAS), Construction Partners (ROAD), ProShares Ultra Technology (ROM), Sandstorm Gold (SAND), SSR Mining (SSRM), Uranium Energy (UEC), ProShares Ultra Semiconductors (USD), Telefônica Brasil (VIV), and Vanguard S&P 500 Fund (VOO).

In today's mailbag, feedback on yesterday's edition, which included reports on the latest inflation data and an idea from E.J. Antoni, the possible next head of the Bureau of Labor Statistics... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.

"I realize the Federal Reserve has both an inflation and employment mandate, but where do their priorities lie? Common sense dictates people with jobs are in a better position to handle higher prices than those that are unemployed. Their funds rate action over the last several quarters has not moved the needle much at all on inflation, to the detriment of the labor market. Seems they don't have a plan that is working..." – Subscriber Mark T.

"With the latest core CPI numbers and the poor job numbers, it seems to be the beginning of that terrible word... stagflation. The Fed is handcuffed. Cut rates, there goes more inflation. Don't cut rates, there goes the economy. The Fed is out of ammo. We're out of luck." – Subscriber Jim V.

"You are very wise to point out the risks associated with Mr. Antoni's proposal to cease publishing monthly jobs numbers..." – Subscriber Sherwin R.

Good investing,

Eric Wade
Los Angeles, California
August 13, 2025