Here's a lil explainer so you can fit in with your crypto-friends.
Cryptocurrency is digital currency that can be used to buy goods and services. Digital currency just means it's a currency that's stored on the internet, and it's secured by cryptography - which means it's pretty much impossible to do a dodgy with crypto (i.e. counterfeit or double-spend it).
Without getting into the nuts and bolts of it, crypto works on blockchain technology, and it's not issued by a central authority like a bank. It's issued by the people, for the people, which is why some people love it - but other's think it's a bit of a cowboy's game.
You’ve most likely heard of the big dawgs of crypto - like Bitcoin and Ethereum. Bitcoin is famously bad for the environment (cos Bitcoin mining uses a TONNE of energy), and it's prone to massive price swings. But did you know there are more than 6,700 different cryptocurrencies trading publicly on crypto platforms?!
Over the last 12 months, we’ve seen cryptocurrencies become more mainstream - with Tesla, Paypal and Square recognising cryptocurrencies in some form.
The reason people invest in cryptocurrency is because it is not dictated by inflation. Buyers are able to control the prices by working together to increase demand (like when Gamestop investors became overnight millionaires back in January 2021).
But people genuinely believe crypto is the future of currency. I mean, we're becoming increasingly digital anyway, so a digital currency does make sense. Now, big companies like Paypal, Square (and once Tesla) are offering cryptocurrencies as acceptable transactions within their businesses.
But there are many, many, MANY risks associated with investing in crypto: security, volatility...you name it. So, it pays to do your own research! eToro has a pretty cool educational course where you can learn all the ins and outs. Otherwise, TheBlockCrypto.com and CoinDesk also have some great resources for you to read.
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