Cryptocurrency has been around for more than a decade. It received a tremendous amount of attention in the past few years. It’s here for good, and there are many reasons why the future looks bright. Let’s dive deep into everything you need to know about crypto.
The Why Behind Crypto Is As Meaningful As It Gets
Cryptocurrency was invented as a push back against the modern banking system. The inventor, pseudonymous Satoshi Nakamoto, clearly stated his disapproval of the banking systems all over the world. Traditional financial institutions still govern much of our lives today. There is very little freedom offered to the customer.
Banks are strongly tied up with governments. This limits liberty to an even further degree. Every transaction essentially goes through a bank and the government that’s backing the institutions. The United States government is printing money like never before. The value of the dollar is beginning to be questioned. Since it’s not backed by the gold standard, since 1971, it’s fiat money with no inherent value. Over one in five dollars in United States circulation were printed in the past two years.
Cryptocurrency takes a liberating approach. Many cryptocurrencies are self-sufficient, with no governing body needed at all. That means that the technology itself acts as a bank. People can manage all transactions and operations on their own. Cryptocurrencies are rapidly gaining in popularity for many reasons.
How Cryptocurrency Is Used Right Now
At first, it was intended to be used as a form of digital currency. Essentially a cash for the internet. The problem that users encountered is that few businesses were willing to accept it as a form of payment. The first cryptocurrency payment for goods was a pizza order. One man paid for two pizzas with 10,000 bitcoins. These 10,000 bitcoins were worth $500,000,000 in 2020. We do hope the pizza was good.
A decade later, cryptocurrency is much more accepted worldwide. You can definitely pay for pizza with it, and pretty much for anything on the internet, thanks to Paypal’s recent integration of digital currency into its system. You can even tie your crypto account to a debit card, although that remains in the experimental stage. Most people however do not use their crypto. Instead, they treat it as an asset, and rightly so.
Bitcoin has been dubbed virtual gold and to no surprise. One bitcoin is worth almost as much as a kilo of gold, and due to its volatility, it can go much higher than that. Due to it’s almost absolute anonymity and unmatched security, it can also be used as a means of storing or transferring large sums of money. For example, in highly technologically advanced Japan, you can use crypto as a deposit method for playing at an online casino. This is but one of the many sophisticated uses crypto has found over the past few years.
The Pros And Cons Of Crypto
Banks are enormous corporations with hundreds and thousands of physical branches, employees, and complex structures. Cryptocurrency doesn’t need as much land or effort. There is no need for an office HQ in a London skyscraper, as there would be no one to sit there.
The iconic feature of cryptocurrency such as Bitcoin is mining. This is a process of earning Bitcoin, a parallel to mining minerals from the Earth such as gold and silver. In reality, Bitcoins are earned in exchange for computing power, data storage, and transfer. The technology, people’s data, and wealth are stored in decentralized servers all over the world. If electricity disappeared so would bitcoin. At that point the world would probably have bigger problems.
Due to its highly unpredictable nature, crypto can jump up or down extremely fast, and it has many times throughout it’s existence. As it’s projected for growth, it’s a dual edge sword, where investors can just as likely lose money as earn any. There are no goverment regulations, which means that you are on your own. The technology is extremely safe and secure, but if you make a mistake, there is no one to pat your back and say it’s okay.Should you own crypto? It depends. Right now, it looks very much like a promising gamble. One where you shouldn’t put more money than you could afford to lose. Many people believe that this is just the start, and they are right. But because of that, we don’t yet know where we will end up.