What is cryptocurrency?

All this news about Bitcoin and Dogecoin, but what actually is it?

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Bitcoin was created by a group or person with the pseudonym “Satoshi Nakamoto” in 2009. As of March of 2021, 18.6 million bitcoins are in circulation right now with a market value of over $927 billion. Bitcoin was created by a group or person with the pseudonym “Satoshi Nakamoto” in 2009. As of March of 2021, 18.6 million bitcoins are in circulation right now with a market value of over $927 billion. (Photo Illustration. by Collin Andrews)

Collin Andrews, Staff Writer

Ask yourself something:  if you lived 100 years ago and someone told you that there would be a type of currency that you can never see but is worth thousands of dollars, would you believe them?

That is exactly the case with cryptocurrency. Everyone talks about Bitcoin and how 23-year-olds have made millions of dollars because of it. But very few people know what “crypto” actually is or how to go about getting bitcoin or dogecoin. 

What is cryptocurrency? Investopedia defines it as “a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks based on blockchain technology.” This means that they are a virtual-based currency that is secured to a third-party network that is not linked to any government entity or reserve. 

The first cryptocurrency that was made and is still the most popular and most valuable is Bitcoin. Bitcoin was created by a group or person with the pseudonym “Satoshi Nakamoto” in 2009. As of March of 2021, 18.6 million bitcoins are in circulation right now with a market value of over $927 billion. 

Since then many other kinds of cryptocurrency have been created; they are known as  “altcoins” and have all had various forms of success. Cryptos like Litecoin, Peercoin, Dogecoin, and Ethereum are all different kinds of coins, and in fact, there are over 6,700 different kinds of cryptocurrency. All of these combined are worth over $1.5 trillion combined, with over 60% of that as bitcoin. 

Now that we discussed what cryptocurrency is, the next question is how is crypto useful or what makes it any different than the US dollar or a Euro? One major advantage is that it makes transferring money easier by taking out the third party person like a bank or service. Crypto has the ability to create a secure transfer by using public or private keys that make that transfer safe between the two parties. 

Another big reason for it is that many speculators see it as the future way to use money and a shift to having all assets virtually. Given this idea, many speculators and investors are rapidly purchasing more with thoughts that they will increase in value in the coming years. 

The downside is that all of this is merely speculative and is based on the market. If no one deems it valuable and since it’s not supported by a standardized system like the gold standard in the US treasury, it is worthless. The other side is that it has the potential to explode into being worth millions and by owning a single coin, it could set you up for life.

If someone is interested in buying cryptocurrency there are a number of options. First, a growing number of e-trading platforms such as eToro and Robinhood offer cryptocurrency as a tradeable and purchasable stock/value to add to your portfolio. The other way, and a more historically common idea, is having an online app called a “wallet” that allows you to hold your currency that you can purchase from an exchange online. For more information on purchasing crypto such as bitcoin click here.

Cryptocurrency is a new and innovative way that people have invested their money. These types of currency demand to be understood so that people can make better decisions when trading these assets or just by even having that basic understanding for the future. As people begin to find new ways to create income it only makes sense to understand everything, even the ones that may have been created out of nothing.