Ever heard of cryptocurrency? How about Bitcoin or even Dogecoin? Chances are you have. So what exactly is it? And what’s the obsession with it in today’s society?
Cryptocurrency can be complicated. Wikipedia defines cryptocurrency (or crypto) as “a digital asset designed to work as a medium of exchange wherein individual coin ownership records are stored in a ledger existing in a form of a computerized database using strong cryptography to secure transaction records, to control the creation of additional coins, and to verify the transfer of coin ownership.”
And cue smoke billowing from my ears…
If you aren’t tech-savvy then all that may just sound like gibberish. Hell even if you are tech-savvy that may sound like gibberish! To put it simply, cryptocurrency is digital money. This money isn’t in a bank and it isn’t tangible; it is kept in a very secure online database. This database records the money’s value, its production, and everyone who owns it.
Okay okay, that is much more digestible.
Now that we know what it is exactly, that still raises a lot of new questions. Who can own it? What is it? When did people start using it? Where does crypto’s future lie in our economy? Why is it so popular? How does it benefit us? Answering these 6 questions will give you a much better understanding of crypto, which gives you a good chance of being well above the average person.
Nobody knows who first invented Bitcoin, but whoever it was made it readily available to the public to use as well! Anyone can own Bitcoin and anyone can transfer, buy, and sell it too.
When crypto was first founded, it was a sketchy process to purchase and sell them; often involving money grams to China or seeding parking lot trades of physical proof. Nowadays there are hundreds of platforms to buy and sell cryptocurrency. Even stock brokering apps and services like Fidelity or Robinhood offer cryptocurrency now.
There are two main ways to collect crypto; either by buying shares through apps and brokers or by collecting Sats through debit card services like Fold. Sats, or Satoshis, are the smallest original subunit of Bitcoin, or 0.00000001 Bitcoin.
Cryptocurrency is basically digital cash. Instead of being circulated by banks and the government like physical cash is, Bitcoin is organized with a digital ledger system called a blockchain.
This digital ledger is a super-secure system that is encrypted into each bitcoin. Many people see this encryption as a way to hide your transactions for nefarious reasons, maybe to lie about your finances. But that really isn’t the truth. The encryption is visible for all to see, but can not be influenced or edited by a person. It is an automatic system to keep it safe, secure, and correct.
Bitcoin, the first cryptocurrency, was invented when someone decided they didn’t want to use a third party like a bank to transfer money between two people. When the banks caused the 2008 crash, it became apparent they should not be trusted so people went out to solve the problem themselves. Digital cash removes the third party, makes the transaction safer and less complicated, and eliminates human error.
In recent years, Bitcoin has become easier and easier to buy and sell and to use in real life. Many companies even accept payment with Bitcoin such as Whole Foods, Microsoft, Starbucks, and BMW. Even if a certain company does not accept Bitcoin there are third-party companies where you can use Bitcoin credit cards, making it the first universally accepted currency.
Nobody knows exactly where Bitcoin will be in our future, but there is a great chance it will be either a major part of it or a major influencer of it. It may be too late for you to “make it big” on Bitcoin, but it isn’t too late to get involved in the system. A worldwide digital currency with no third party is just the beginning of an entire system overhaul in technology and how we pay for things. Bitcoin was the very first to start this, but won’t be the final.
Bitcoin is like the internet. It is a massive innovation that started as a simple service but has evolved into much more. Hundreds of cryptocurrencies have emerged due to bitcoin, just as hundreds of companies have emerged due to the internet.
So even though we don’t know where it will be 10 years from now, there’s a good bet it will be an important part of our everyday lives.
Bitcoin is very popular for many reasons. It’s an innovative system that may overhaul how many of us view finances. But media attention is what mainly drives each cryptocurrency’s value. For example, Bitcoins price went crazy in Oct-Nov 2017. It was $1,000 in August 2017 and by January 2018 it was $20,000 then dropped back to $3,200 in the months following. Now, three years later, it is at more than $55,000. What caused these crazy spikes and plummets? The media.
People are obsessed with Bitcoin because there are so many success stories from people making millions on it overnight.
Bitcoin is not the only cryptocurrency out there. Since its invention, hundreds more have been released. Just like any other stock in the public market, the media and how people react to it play a major role in its success. There have been multiple instances where people make new cryptocurrencies like the “Do Not Buy Me” coin, fully intending it to be worthless, yet people buy into it until it is worth thousands of dollars.
When you’re buying any kind of cryptocurrency it is important to research the product make sure you know what it does, know what problems it is solving, know the technology is decent and up-to-date, and check if they have a credible team before investing any of your money.
Blockchains are hyper-secure systems that cannot be tampered with. For example, when you transfer 10 bitcoins to someone, the system confirms the transfer and makes a note on its digital ledger by stamping a block to mark the validity. Once this has happened, it will be stamped to that bitcoin for the rest of time. The benefit is no third party can be involved and since it’s all computerized, blockchain eliminates human error.
Each cryptocurrency is mined a little bit differently and each variation has a different market cap. This means they are not all valued the same and may not give the high returns seen with Bitcoin in the past couple of years.
Cryptocurrency is not as complicated as it may seem. Any person can use and take advantage of it, and it may someday become a norm. So what are its implications to you? If Bitcoin technically can raise its value by tomorrow, why would a normal person be spending 10 Bitcoin if it will be worth 100 Bitcoin tomorrow? Is that a “financially smart” move?
Bitcoin is very accessible and usable throughout the world, it’s never been easier to access! So is it worth actually using and spending like a normal currency?
The basic answer to both of these questions is no. Cryptocurrency can be worth so much more later on it is not worth spending right now. There’s a good chance that the value will continue to increase.
For a lot of fully realized business owners and people who have made it big on cryptocurrency in the past, it’s different because they only spent $100 and now have billions. In their minds, Bitcoin is free money because they only spent $100 no matter what. This of course is a logical fallacy and does not actually ring true, but it doesn’t stop them from buying a new Ferrari using their Bitcoin.
Now that you know what cryptocurrency is all about, start collecting! Open a Fold account to start bringing in your own Sats, cause one Sat today could be millions tomorrow!