Facts That Will Decrypt Cryptocurrency

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Cryptocurrency is said to be the future of finance, but no one knows who started it or how it’s backed up exactly.

If cryptocurrency is a bit of a riddle to you, you’re not alone.

This probably won’t fix that, but it’s a good place to start or at least have some fun facts to drop at parties.

Here are some facts you should know about the digital currency.

What is it?

In its simplest form, Cryptocurrency is digital cash that can be exchanged online for goods and services.

It is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend.

And no one can really regulate it.

A defining feature of cryptocurrencies is that they are generally not issued by any central authority, like a government.

That means that theoretically, governments can’t tamper with or manipulate them making them potentially more insulated from issues like inflation.

There are a lot of different types.

There are over 10,000 types of cryptocurrency currently in circulation.

On May 27, 2021, the total value of all cryptocurrencies was more than $1.7 trillion.

The most popular type of cryptocurrency is Bitcoin, which has a market capitalization of $735.3 billion. In the last 5 years the price of Bitcoin has risen 23%.

But no one knows who started it.

No one knows who created Bitcoin or even cryptocurrency in general.

The anonymous creator of Bitcoin is referred to as Satoshi Nakamoto.

A popular belief is that this name is an acronym for four leading tech companies:

Samsung, Toshiba, Nakamichi, and Motorola.

Before buying it you had to mine it.

Crypto-mining is the act of using high-powered computers to solve complex mathematical equations in order to find, verify, and log transactions.

Being the first to solve the equations came with a reward: cryptocurrency coins.

But, there are other types of cryptocurrency.

The second most popular crypto is Ethereum at $324.2 billion; the third is Tether at $61 billion.

They are all incredibly volatile because of market changes.

And people are super into it.

The currencies’ market capitalization is so high because much of the interest surrounding them right now is rooted in the trade for profit.

The total amount of Bitcoin in the world is limited. That’s why it continues to increase in value as supply decreases. Think of it as a finite resource like water or oil, someday, we will run out.

The technology behind cryptocurrencies is called blockchain.

People like it because it’s a decentralized processing and recording system and it can be more secure than traditional payment systems. Ensuring that there isn’t one central hub can protect the currency from cyberattacks.

But, not all countries trust it.

There are currently six countries that have banned all activities involving cryptocurrencies:

Algeria, Bolivia, Morocco, Nepal, Pakistan, and Vietnam.

Qatar and Bahrain ban the use of cryptocurrencies locally, but allow their citizens to trade crypto outside their borders.

China, on the other hand, is the biggest cryptocurrency miner.

Financial specialists have complicated views on the matter.

Billionaire Warren Buffet has stated that he doesn’t own cryptocurrency and probably never will since there is no real backing.

While explaining the risks of crypto, Buffett compared the currency to paper checks.

“It’s a very effective way of transmitting money and you can do it anonymously and all that. Are checks worth a whole lot of money? Just because they can transmit money?” – Warren Buffett

This is also because Buffett only invests in things he understands. So many people invest based on trends or what their advisors say, but professionals such as Buffett do their own research and only invest in things they can understand and back.

At the end of the day, planning your financial future and deciding where to invest your hard-earned money is a personal experience. So, do your research and remember that what works for some might not work for all.

Cryptocurrency might be a mystery for now, but technology influences the market often so, we must try to learn as much as we can and try to stay ahead of the curve.