You hear it. You see it. But what in blazes in crypto? Don’t worry, we’ve got your back. This first article of our 2-part series gives you the basics of crypto.
Cryptocurrency has been a buzzword in the financial industry and the world all over. What started as something unheard of to the hottest trend within a decade, there’s no denying that cryptocurrency is here to stay.
In the past years, the dominance of crypto as a legitimate currency truly sprouted. We see dedicated cash-in kiosks and digital wallets allowing for transactions between individuals. Even businesses like online casinos and real estate firms now take crypto as payment.
Celebrities, athletes, and even social influencers call people to invest in crypto coins. It seems like there’s no harm in getting one, right? But are there certain red flags to watch out for before diving into the trend?
This article will talk about the basics of cryptocurrency: the definition and what you can do with it. We’ll also check out which crypto coins are worth getting and what to avoid.
What Is Crypto and How Does the Currency Work?
In a nutshell, cryptocurrency is a digital asset protected by cryptography, making it difficult to copy or duplicate. Most crypto work through a blockchain.
What is a blockchain, you ask? It’s a digital distribution database that takes note of all transactions done using the currency.
One unique thing about crypto is that it’s not tied to any agency or nation. This results in decentralization, meaning government bodies can’t touch it. This also protects the asset from devaluation that usually happens with traditional currency.
Most cryptocurrencies are mined using specialized computers or devices. Yet, you can also get them from cryptocurrency exchanges. Individuals called “brokers” buy and sell crypto for a certain fee.
The Rise of Cryptocurrency
Cryptocurrency saw its humble beginnings right after the 2008 financial crisis. Back then, major financial firms saw the people’s trust in them significantly dip. The following year, the first crypto, Bitcoin, came to life.
While not an instant hit at the time, appreciation for this revolutionary form of currency slowly rose. Soon, several new forms of cryptocurrency emerged, like Ethereum, Litecoin, and the infamous Dogecoin. The intrigue behind the coins and the influential people behind them encouraged more people to take part in the trend.
As of 2022, over 18,000 cryptocurrencies exist in the market. However, most of these have minimal impact on the digital economy.
Now that we’ve reviewed crypto’s exciting history and growth, you may be asking: “Which crypto should I invest in?” Next time, let’s talk about the factors you should consider before investing in a specific cryptocurrency.
