Bitcoin… Dogecoin… Ethereum… Cardano… What on earth is all this and why should you care?
Cryptocurrency can be a bit tricky to delve into as it can be easy to believe it’s a craze that tech nerds are using to trade in… tech nerd stuff. And to some degree, that’s not too far off base… for now. If there’s one thing the crypto boom has shown is that while there are still many problems with this form of currency, it’s here to stay, so no matter how tech-shy you are – sooner or later you will have to understand and maybe even be forced to accept it. Luckily, we’re here to take you into the world of crypto in a way that doesn’t give you migraines or the desire to run away and live in the woods. Hopefully.
While the concept may seem daunting, cryptocurrency in and of itself is not that far removed from the regular currency we use every day. We used to trade gold and silver for goods and services because it was well known that these precious metals had intrinsic value. After that we decided to simplify the agro by carrying around heavy metal sacks and switch to paper money. Obviously this paper (or now plastic) has little to no ACTUAL value, but it does represent a specific amount payable by the bank – for which the bank will have reserves, including good old gold, in a vault.
Aah banks, those evil monsters we invented. A bank, or lack thereof, is the fundamental difference when it comes to cryptocurrency. As we have entered the digital age, how often do you actually still find yourself handling or using money? Most purchases are now made either online or with a debit or credit card. Put simply, most transactions are nothing more than entries in a table. However, all “actual” money is accounted for through the central bank system. Every penny we spend, physical or otherwise, is tracked through your local banks and then through central banks, which are government regulated. The man.
Cryptocurrency has nothing “actual” about it. The fact that so many of these currencies contain the word “coin” is a little misleading as it is not a physical value. Crypto exists purely in the digital world in the form of huge online ledgers. A plus in column A corresponds to a minus in column B, but on a global scale. These ledgers, which hold records of every single transaction, are completely decentralized – in other words, The Man is not involved. The records are not kept by many individual banks or governments, they are all kept in one gigantic spreadsheet – a ledger for each cryptocurrency.
So there is a Bitcoin ledger, an Ethereum ledger, a Litecoin ledger, etc. And unlike banks, this ledger is fully public domain and there are thousands of copies of it – every part of a crypto network has a copy of its ledger. So if you make a transaction with Bitcoin, for example, the Digi-Shop doesn’t just verify your Ledger to see if you have enough for the purchase but it is compared to every single ledger on the network. But more on that later.
There are many advantages to such a monetary system. For one, convenience. Because your cryptocurrency isn’t real money kept in a bank, you have no spending limits, no interest rates, no international fees, and virtually no transaction fees. Also, conducting international transactions takes no time at all, unlike banks which can take hours or even days.
On the other hand, you only need access to the Internet. Many parts of the world will not have access to traditional banks, or worse, since The Man is a big fan of keeping broke people broke, you will not be turned down on application or denied an account. Many see it as the future of money and a good way to eliminate banks altogether – perhaps not the worst idea, especially after we all saw what happened in the 2008 meltdown. After all, banks are regulated by the government, which is hardly a trustworthy collection of people.
Another big plus of the cryptocurrency is the fact that it is comparatively very safe. We mentioned those gigantic ledgers earlier? Since every transaction is matched against every single identical ledger – of which there are millions – if someone tried to manipulate how much “coin” they had they would have to hack every single one of those computers, which, as you can imagine, almost the case is impossible.
Additionally, getting started with cryptocurrency does not require any personal information or verification – you will be assigned a unique identification code, but nothing that actually relates to you as an individual. As far as identity theft goes, that’s practically impossible in the crypto world.
We are about to introduce another deeply confusing term – blockchain. Blockchain is the reason cryptocurrency is so difficult to counterfeit because, very simply put, it is a very secure way of keeping ledger entries. Every transaction made with a cryptocurrency is recorded as, you guessed it, a block. Each block contains data about that transaction – who was paid and how much, a reference hash (which is just a unique identifier), and the hash of the previously Block in the sequence, ie the previous transaction.
If something changes in a block, such as the amount, the unique identifier hash changes as well. When this happens, the next block no longer has a matching hash and thus the Chain is broken immediately – each subsequent block becomes invalid. So trying to commit fraud at such a level has a huge cascading effect that is insanely difficult to avoid. Not only would you have to fake the entire blockchain of that transaction, but every ledger that can access it!
Basically, any idiot stealing your credit card or trying to get a bank account in your name or hacking your banking app can do it with relative ease compared to the failsafes in place when it comes to crypto.
While this all sounds like peonies, there are many risk factors when it comes to crypto – although most come from scammers taking advantage of newbies – so well done reading! One can celebrate the lack of involvement of the banks, but it also means no real regulation or supervision. Without even going down the path of how the boom in NFTs has led to a new form of money laundering (but that’ll be a headache another time), the market for owning digital assets is a breeding ground for people to be scammed.
Part of the problem is that the value of some of these NFTs is astronomical based on… apparent madness. CryptoPunk are literally pixelated images of heads… the quality a 5-year-old would draw in an old Microsoft Paint pack… and they’re worth millions. And that’s millions indeed Money, not “digital” money. Obviously everyone wants to get in the frenzy as a simple JPEG could fetch you a fortune, but how that value is assigned is still incomprehensible to many. Remember that GIF of the cat with the rainbow coming out of her butt – go ahead and google how much her NFT sold for. good wait
What do you actually do with cryptocurrency? Many skeptics still disregard crypto as something to be taken seriously since, for the most part, you can’t buy anything real with cryptocurrency. While there are a few companies that have started accepting bitcoin payments, when it comes to our day-to-day needs, no normal person is going to pay their mortgage, buy fuel, or go shopping with cryptocurrency. So what is this you ask? Well, this whole crypto deal is about exchanging digital assets and hoping to make a profit from the trade.
When people buy crypto with “real” money, there is hope that the value of that particular cryptocurrency will go through the roof. No different than regular trading on the stock exchange. However, while traditional currencies have an understood value based on trust in their respective governments (for example, how likely is the UK to suddenly fall apart compared to, for example, Colombia?
Not by much, hence the pound is worth more than the peso), the value of the cryptocurrency is based on perception, which is very easily shaken in a market with little real liquidity, and the standard concept of supply and demand – there is a finite amount of Bitcoin, and of course, as demand continues to rise, so will its value. There are now thousands of different cryptocurrencies out there and they are all trying to bring something new to the table, be it faster speeds or better algorithms, so how is a layman supposed to know which of these currencies could “go to the moon” and which ones will be a complete failure ?
So – one of the biggest downsides to crypto is that this market is insanely volatile. Because it’s still such a new thing, and roughly speaking, “it’s fake money that can’t buy anything real, but is sometimes worth a lot of real money for reasons few understand,” something as simple as a negative tweet from someone , which is famous Send the value of a cryptic crash into oblivion.
Like it or not, gold is still gold, while digital currency on the airwaves of internet cables is not yet something that the average person will trust more. But there is clearly a lot of potential for the crypto market to spread. Consider Dogecoin – the Shiba Inu thing – started out as a joke… and now its market cap is $21.7 billion and is favored by Elon Musk… which isn’t to say it won’t collapse tomorrow.
So there’s clearly a pretty penny to be made, but if you’re a newbie to the crypto market, it’s important to enter with a clear head and not invest more than you’re willing to lose. The best way to dip your toe and get comfortable with crypto is to use platforms like AQRU, which offer a very user-friendly way, with relatively low risk and easy access to your money — crypto or otherwise — too invest and trade. if you want to move out
Without getting too existential, but with the development of the metaverse, which is sure to play a big role in the future, cryptocurrency is likely to play a very big role in not only how we buy and sell, but also how we recognize which assets have value have in the future.
It’s worth noting that cryptocurrencies have a huge negative impact on the environment due to the computing power they require, but we could always switch to renewable energy sources and create a more sustainable way of powering our digital networks. As we move further and further away from tangible life experience, it stands to reason that our currency will too.