Erin Benson
June 10, 2021
• 1 Minute Read
So, what is Cryptocurrency? Let’s break it down. Cryptocurrency or “Crypto” is a digital currency that can be used to buy goods and services. It uses an online ledger with strong cryptography to secure online transactions. Cryptocurrencies work using blockchain technology; don’t know what blockchain technology is? Neither does a majority of the world so no worries. According to Fortunly, only .71% of the world’s population uses blockchain technology.
The first ever Cryptocurrency, Bitcoin, was invented in 2009 as a form of digital currency. Satoshi Nakamoto created Bitcoin to give users the ability for lower transaction fees compared to traditional online payment methods and it is operated by a decentralized authority. To give you an idea on how much Bitcoin has grown over the years, it started out being worth only 8 cents in USD. Today, Bitcoin is worth over $35,000.
Just how many different types of Cryptocurrencies are out there? More than 10,000 cryptocurrencies are publicly traded. In April of 2021, the total value of all cryptocurrencies was more than $2.2 trillion. In comparison, the U.S. stock market’s total market capitalization is currently sitting right around $49 million.
Why is Cryptocurrency so popular? Most users believe it is the currency of the future. A majority of crypto supporters like that it has removed banks from managing the money supply (banks tend to reduce the value of money over time due to inflation.) The technology behind cryptocurrency is another big reason people have begun utilizing the digital money.
Now that you know about cryptocurrency, you have to be wondering if it's safe to use. Because of the blockchain technology behind Cryptocurrency it makes it hard for hackers to tamper with. Cryptocurrency transactions also require a two-factor authentication process to help make it even more secure.
Some advantages of Cryptocurrencies include: easy and confidential transactions, low transaction fees, access to credit, and no longer having to go through a third party. Some disadvantages would be scalability, cybersecurity issues, price volatility and regulations. While it has been around for 10+ years, there are still a lot of unknowns about Cryptocurrencies. The more digging you can do into it the better off you will be if you decide to partake in this new age of digital currency.
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