What is Cryptocurrency? We Take a Deep Dive Into This Mysterious Way to Pay…
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If you’ve been curious about cryptocurrency, here’s everything you need to know.
With the future of cryptocurrency evolving by the second, it’s hard to keep up!
If you’re like me, every time you hear about cryptocurrency, you think of Bitcoin, but you don’t know exactly what it is. I’ve come up with a great guide for beginners who are interested in learning about the currency of tomorrow!
Simply put, cryptocurrency is a digital currency, or form of payment, used to buy goods and services. The only difference is it uses a tracking system known as an online ledger, or blockchain, that helps with security purposes. Although Bitcoin is the most popular, there are over 10,000 cryptocurrencies, and each company has its own “tokens”, similar to the concept of arcade tokens. 🪙
Cryptocurrency may sound too advanced or hard to grasp because there is literally no physical money, but, if you think about it, every physical dollar has a serial number that tracks where it was distributed. Cryptocurrency has that same aspect, except there’s no physical dollar, and instead only a “serial number”. This means that many cryptos can be tracked due to their coding.
As mentioned earlier, blockchain is important to know when dealing with crypto. When dealing with the bank, it will record all your transactions and be the middle man. Blockchain is similar to this where it manages and records transactions.
According to Forbes, “Blocks” are the recorded transactions, and they are connected to a “chain” of previous transactions. It’s nearly impossible to hack and isn’t limited to the world of crypto. Medical records at some hospitals have been using blockchain, and it’s even been rumored that this kind of technology may be used for online voting purposes in the future!
The cryptocurrency industry is worth $1.4 trillion but you may be wondering… why is it so popular?
It’s the currency of the future!
With the rising popularity of contactless payment, it’s not too far off that one day we may be using crypto as an everyday currency. There are a bunch of people in today’s society that don’t even carry cash, so I think cryptocurrency will only evolve further over time. In fact, El Salvador became the first country this year to allow Bitcoin to be an acceptable payment throughout the country.
There is no inflation from banks.
This is a big advantage and a bigger responsibility. There’s no one to report to other than keeping track of your own personal record. Even the government has no way to affect your money. There’s no manipulation of funds from any authority, and there’s a minimal way of hacking.
It’s easy to transfer cryptocurrency.
There’s no waiting on the bank to approve a certain amount of money before sending it. Between two people both using cryptocurrency, there is no third-party involvement. It is straightforward and efficient.
So, how do I get involved with cryptocurrency?
When it comes to how to get involved, there are thousands of Cryptocurrencies such as Tether, USD Coin, Uniswap, and Dai. It’s important when choosing which crypto you’d like to invest in to research extensively, as there are many scam cryptos out there.
To avoid this, see if they have a notable founder or investors. This is a good sign if they do. Anywhere in the top 200 currencies, according to Coin Bureau, is usually a good place to find an established, legit cryptocurrency.
Joining an app such as Robinhood allows you to buy and sell different cryptocurrencies commission-free. Although it’s not available in every state, it’s a great tool for beginners who want guidance and an easy platform to navigate and transfer trades and real money to crypto!
When you sign up for Robinhood and link your bank account, you can score a FREE stock with a potential worth of up to $177.15! You have a 1 in 150 chance of receiving a share of stock from big name companies such as JPMorgan Chase ($158.57), Apple ($149.43), or Johnson & Johnson ($177.15). Pretty sweet considering all you need to do is simply get yourself started on this highly talked about app!
Now that you know why many people are using cryptocurrency and how to get involved, you should know the risks.
It’s important to be informed and do your own individual research to make sure you’re prepared for potential investments within the world of cryptocurrency.
Making a profit is risky.
Like the origin of any currency, someone has to pay more than you to make a profit. It’ll never go up in value automatically with time; it all depends on other investors. Because of this, there will be times when you lose money, make money, or have no change.
Bitcoin is currently worth around $630 billion, but with more people investing due to stimulus payments and other factors, it reached its all-time high last April where it was worth $1.2 trillion. 😱The fluctuation will always occur depending on when people invest. Patience is important when dealing with cryptocurrency, but there’s always a risk of losing money before cashing out.
There’s no backup storage.
No bank involvement is a great benefit of cryptocurrency for the right people, but this makes you in charge of your own records. Arguably, the biggest risk of crypto is if your hard drive gets destroyed or lost, you’ll lose your money with no way of getting it back. You have ten guesses on Bitcoin, for example, before it locks you out permanently.
A man from San Francisco lost the password to access his 7,002 Bitcoin, equivalent to $250 million. 🤯 With this in mind, be sure to ALWAYS keep your passwords on file when investing!
It’s not available in every country.
Cryptocurrency is primarily used between individuals locally/within the same country, but, in case you were unaware, countries such as China, Russia, and Bolivia do not allow the use of crypto. The majority of developed countries, however, including the US, Canada, EU countries, and Australia allow it.
Cryptocurrency is an exciting yet risky investment.
If you’re unsure whether investing in crypto is the right decision for you, look into investing within an established company or financial advisor. It’s less risky and will give you a great introduction to the world of investment, and you can later bring that experience to your future with the world of cryptocurrency!
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