If you’ve been spending time on the internet lately, then you might have come across the term crypto a lot at this point. It’s becoming increasingly popular, especially among the finance and tech circles. However, for the regular layman, crypto might seem like this incredibly ambiguous and vague idea that’s only reserved for the tech-literate people of the world. This shouldn’t be the case as crypto is largely designed to be a democratic and decentralized form of currency that should be widely available and used by as many people as possible. In this article, we are going to go over what cryptocurrency is, how it works, and how people are using it online.
The simplest form for cryptocurrency is that it is a digital form of payment that takes place online and can be used to acquire certain products or services. With traditional money, there are different currencies all around the world. And the value of such currencies can vary depending on where you live. There are stronger currencies and there are weaker currencies. It’s also the same with crypto. There are more powerful currencies or coins while there are also weaker ones. Currently, the most popular coins or tokens include Bitcoin, Ethereum, and novelty coins like Dogecoin.
Essentially, the way that these digital currencies work is the same as with real money. You can use them to pay merchants or sellers who are willing to accept them in exchange for their goods and services. The reason why a lot of people are fans of crypto these days is that it’s essentially a decentralized form of finance. In traditional money, governments control the printing, regulation, and transfer of money. However, with crypto, there is no centralized body that oversees how money is made or moved. Everything works within a technology that is called the blockchain.
A blockchain is a decentralized technological entity that exists across numerous computers all around the world. These high-powered computers are responsible for managing and recording transactions that take place within the blockchain world. However, blockchain technology completely promotes the security of the owners of the coins by only documenting how and when the coins are transferred. They don’t necessarily reveal the details of ownership of the coins.
Again, cryptocurrencies can be worth different values, depending on what kind of coin you have. Typically, companies will try to proliferate their coins or raise money through ICOs or initial coin offerings. This is very much similar to when companies go through IPOs and allow their organizations to be publicly traded on the stock market. The more people invest in the ICOs or particular coins, then the more valuable these coins become. As of mid-2021, the total value of all cryptocurrencies in the world has amounted to around $1.4 trillion. Currently, the most popular cryptocoin is Bitcoin and it is valued at around $630 billion globally.
Ultimately, crypto is only valuable to people who give it value. This means if both merchants and customers find value in their crypto, then they can freely exchange goods and services. For example, most notoriously, Elon Musk invested $1 billion of his company Tesla into Bitcoin. Now, Tesla accepts Bitcoin as a viable payment method for all of their cars. That’s only the most popular example, but many online sellers and merchants are following suit. For example, some of the best online casinos in the world are also using crypto as a viable payment option for gamblers to start playing with money when placing bets.
Nowadays, the value of crypto can rise and fall like stocks on the stock market. Many investors are eager to capitalize on the volatility of the crypto market, but many consumers are privy to such an unpredictable form of currency.
Currently, due to the volatility of the crypto market, it’s still very difficult for industry experts to come to a consensus on what the future holds for crypto in general. However, if recent trends are any indication, it seems like society is gradually shifting more towards a completely digital world. And if that’s the case, it looks like crypto is going to continue to be a formidable force well into the future.