For several years, it was easy to dismiss cryptocurrency as a silly idea or a technological fad. Many never believed (and still don’t believe) that bitcoin and its counterparts represent the currencies of the future. Many more find the idea of cryptocurrency a little bit too complicated, or too vague, to get involved with. But it’s now 2018 – these currencies have been around for a while, and throughout 2017 most of them established significantly higher values that to some degree demand they be taken seriously.
That doesn’t mean you have to buy cryptocurrency or start using it. It does, however, mean that it might be a good idea to learn more about it so that you can be prepared to invest if it becomes a sound financial decision for you. So here, we’re going to start with just the basics.
What Exactly Is Cryptocurrency?
It can be hard to find a simple or specific definition for cryptocurrency out there, but one we came across of more or less got to the point: a cryptocurrency is a digital or virtual currency designed to work as a medium of exchange. There’s more to it than that, but that’s the basic idea. It’s newly created, digital money, meant to be used as legal tender as well as bought and sold like an asset in currency trading.
What makes it particularly unique is that cryptocurrency is also encrypted and decentralized by nature. Because it exists entirely in digital form, it is not stored in a bank or backed by a financial system. Rather, it is essentially verified by an unbiased network of computers, put into circulation, and accepted at face value. That can all take some getting used to, but the good news is that’s about all there is to it.
What Are The Top Options?
Bitcoin is the cryptocurrency we hear the most about, and it more or less pioneered the technology. However, it isn’t alone. In fact there are now hundreds if not thousands of “altcoins,” which is to say alternative digital currencies. Litecoin has long been the most direct competitor to bitcoin. Bitcoin cash has emerged as a sort of spinoff of bitcoin with a smaller value. Ethereum (or ether) is thought by some to have the greatest long-term value. And other options like ripple and dogecoin tend to generate some headlines as well. That more or less covers the main batch of top cryptocurrency options.
How Can You Buy (And Use) It?
This is a complicated multi-part question. The best options for buying cryptocurrency tend to be either BTMs (basically ATMs for bitcoin) or online exchanges that allow you to use a debit/credit card or a direct bank account transfer to purchase digital currencies. As for usage, you’ll need a cryptocurrency wallet to store and transfer your digital currenices.
Wallets are difficult to understand at first, because they don’t store physical crypto coins (because there’s no such thing). Because cryptocurrencies are being used more and more for online games, a casino gaming platform did a write-up on wallets recently and actually put it about as clearly as anyone has about them: these are where you store the credentials for the bitcoin (or other cryptocurrency) that you own. A wallet essentially gives you exclusive access to digital currency that exists online, and using that wallet you can transfer that access to another user. This is basically how a cryptocurrency transaction works.
Is It Useful As Money?
In some regards this is actually a subjective question. People who are interested or heavily invested in cryptocurrency enjoy finding opportunities to use it as money, and will sometimes go out of their way to do so. It can be used at several major online retailers, as well as the occasional brick-and-mortar merchant. For that matter, cryptocurrency can also be used to load up a debit card, which can then be used anywhere you’d use an ordinary one.
That said, if you aren’t particularly passionate about using cryptocurrency, and you just have some, you aren’t likely to find many opportunities to spend it. That is to say, while plenty of merchants accept it as pay, you almost do have to go out of your way to find and use them.
What Happened In 2017?
We mentioned that cryptocurrency price movements in 2017 made it more imperative to pay attention to the market. What happened specifically is that bitcoin soared to nearly $20,000 in value, having started the year around $1,000. It was a lucrative, incredible surge, and most prominent altcoins mirrored it, albeit at smaller values. Since late 2017, cryptocurrencies have settled to more reasonable prices (with bitcoin currently around $11,000-$12,000). This has led to a lot of uncertainty about whether it’s going to rebound and continue to rise, or whether the 2017 surge was a one-time thing. But while that’s an impossible question to answer with certainty, it helps to know what happened in 2017 and why people are paying so much more attention to these markets.