Okay, everywhere I look, it seems that everyone is talking about one thing: cryptocurrency. This is one of those situations where I feel like we have to talk about it, because it’s entering our reality faster than we can comprehend. And while in the past, I would’ve brushed it off as something I didn’t need to concern myself with (I mean, I’ve been hearing about Bitcoin for years now), I just didn’t want to be left in the dark and wake up one day having to exchange all my dollars into crypto while not knowing anything about it.
If you identify with this, then this may be the read for you. Here’s everything you need to know about cryptocurrency (relayed in the best way my peasant brain can understand it).
What is Crypto?
A cryptocurrency, also known simply as “crypto,” is a digital currency that lets you buy goods and services. Different from cash or other currency, it uses an online ledger with strong cryptography in order to secure online transactions. The interest in these unregulated currencies is essentially to trade for profit. Sometimes, speculators drive prices skyward (you all remember how Elon Musk tweeted about Dogecoin and sent its prices soaring).
Doge spelled backwards is Egod
— Elon Musk (@elonmusk) March 6, 2021
There are many types of cryptocurrency, and many companies have issued their own currencies, called tokens. These can be traded for specific purchases. If you want an easy way to visualize this, think of coins or tokens at arcades or casino chips. Makes it easier, right? In order to get cryptocurrency, you need to exchange real currency.
How does it work?
Cryptocurrency uses a technology called blockchain, which is a decentralized technology form that manages and records several transactions. What’s the appeal, you may ask? The security (as surprising as that may be). You need to have a virtual wallet, like Coinbase, that holds and trades your crypto.
What types of Crypto are there?
There are currently more than 6,500 different types of cryptocurrencies being traded publicly. The total monetary value of all of these cryptocurrencies is currently at $1.6 trillion. However, the ten largest cryptocurrencies are the following: Bitcoin, Ethereum, Tether, Binance Coin, Cardano, Polkadot, XRP, Litecoin, Chainlink, and Bitcoin Cash.
Why is it so lit?
Crypto is appealing right now due to a variety of reasons: most people view cryptocurrency (such as Bitcoin) as the currency of the future, and are therefore buying them now knowing they will become more valuable in the future. Another reason is the autonomy of management, removing banks from the equation.
Though cryptocurrency is incredibly speculative and volatile, it may very well become the main form of currency in the future. I don’t know if I’m ready to invest yet, but it helps to know a little bit more about it.