From Bitcoin to Blockchain. What Exactly is Cryptocurrency?
Cryptocurrency, also known as crypto, has become a more prevalent phenomenon, even though it’s been around since 2009. If you are new to learning about cryptocurrency, it can seem obscure and mysterious. However, when simplified, you may find yourself wanting to learn more about it or perhaps even invest in cryptocurrency itself.
What is Cryptocurrency?
Some examples of commonly used currencies are dollars, pesos, or euros. Did you know that cryptocurrency is yet another example of a currency used today?
Cryptocurrency is a digital currency that can be exchanged for goods, services, and other currencies. To invest in cryptocurrency, you must use your digital money (stored in your bank account or on a mobile app) in exchange to access the cryptocurrency. With foreign currency, you can exchange your dollars for euros based on the exchange rate. For cryptocurrency, you can exchange your digital dollars for cryptocurrencies.
Some examples of cryptocurrencies are Bitcoin and Dogecoin. 1 Bitcoin is worth around $53,500 as of 4/21/2021, while 1 Dogecoin is only worth $0.29, as of 4/21/2021.
More than a decade ago, our economy only accepted cash, debit/credit card, or checks. However, in today’s society, cryptocurrency has become widely popular. One of the popular features of cryptocurrency is that it can be used to purchase goods and services exclusively online. Like Microsoft and Subway, some companies have started to accept cryptocurrency in exchange for the goods and services that the company will provide its customers.
How does cryptocurrency operate? Is it safe and secure?
A technological database called a blockchain is how cryptocurrency is kept secure and can functionally operate online. A blockchain database isn’t your average database. The way it blocks and chains (hence the name blockchain) information together is how it can effectively run itself online. Due to the advanced nature of blockchain technology, sending, receiving, or storing funds is considered highly secure.
Should I invest in cryptocurrency?
Cryptocurrency is subject to high volatility, similar to investing in the stock market. If you can’t afford to lose the money you plan on investing, you should rethink your investment strategy. However, if you have money to invest in crypto, you can use mobile apps like Coinbase or Robinhood. These apps are designed for beginners who are learning about crypto and how it works.
Are you investing or thinking about investing in cryptocurrency? Let us know your thoughts in the comment section below.