CEO and founder of PlinqitThe only savings app of this kind that pays users to learn about finance and savings.
I have a great deal of support for financial literacy and believe that anyone, young or old, can benefit from learning something about financial management. Especially when it comes to investment. And there may be no investment in markets that are more complex, controversial or talked about than cryptocurrencies.
If you are reading this article, you probably need a little help in understanding what cryptography is and how it works. According to a recent survey, only about 17% of investors who buy crypto are “fully aware” of its value and potential.
Invest without understanding
According to the same survey, more than one-third of buyers have no knowledge of cryptography or classify their level of understanding as “emerging.” How can people invest their money in something they don’t fully understand, or worse, know nothing? The answer is simple: Investor FOMO (Fear of Missing Out).
Cryptography such as Bitcoin, Dogecoin and Ethereum has served as a financial hot topic for many years, especially during the Covid-19 pandemic. When people read success stories like the 25-year-old Cooper Taree, who earn millions of dollars from crypto investments, they want to enjoy their own similar success.
As a result, up-and-coming investors flocked to apps such as Robin Hood and Coinbase, and last year the user base grew exponentially. In fact, Coinbase has been riding the recent wave of cryptocurrency frenzy, with revenues of $ 1.8 billion in the first three months of 2021, up from $ 190.6 million in the same period in 2020.
So what exactly is crypto, why did it cause such an investment frenzy, and what does its future look like? Let’s enter.
(Virtual) Cryptocurrency in a nutshell
Cryptocurrencies are non-physical currencies that use cryptography (such as hashes and cryptographic algorithms) to control how they are securely created, stored, and transmitted.
Cryptography typically leverages distributed networks through distributed ledger technologies such as blockchain. This allows cryptocurrencies such as Bitcoin to have secure transaction records and control verifiable transactions, including coin creation and coin transfer. Think of a blockchain to an individual bank ledger in the same way that you compare an Excel spreadsheet to a Google Sheets document. Blockchain is a shared transaction record.
Speaking of coin making, where does the crypto come from? Cryptocurrencies are created from software and, like other computer programs, have code that specifies basic functions such as storage methods, transaction rules, and creation restrictions.
The code is decentralized, and as with most cryptocurrencies, individuals can run it on a computer with strong enough hardware to “mining” coins. In other words, crypto miners add transactions to the blockchain and coins are rewarded for their contributions.
Bitcoin was the first cryptocurrency to be released to the public in 2009, and to date its creator is unknown.
Crypto Investing Craze
The first Bitcoin purchase transaction in 2010 was historic and notorious. On May 22, 2010, Laszlo Hanyecz purchased two pizzas for 10,000 BTC. At the time of this writing, the amount of Bitcoin is worth over $ 482 million.
Like other types of currencies, there are transactions between cryptocurrencies that drive their valuation. Bitcoin transactions over the last decade have been characterized by a series of extreme peaks and valleys. In 2011, Bitcoin prices soared from $ 1 in April to $ 32 in June, rising 3200% in just three months.
Two years later, Bitcoin reached $ 200 in April 2013. After just seven months, it was worth more than $ 1,000. Ultimately, the success of such pricing has helped create other types of cryptography such as Litecoin and Ethereum.
Bitcoin was reportedly worth $ 7,300 when the Covid-19 pandemic began closing the world in March 2020. But with so many people facing a global blockade (and spending more time online), the demand for cryptography has increased, transactions have reached an enthusiastic pace, and valuation wonders. It led to a rise.
In April 2021, the price of Bitcoin exceeded a record high of $ 63,000. Coupled with the sheer number of cryptocurrencies available on the market and the growing interest in trading, crypto seems ready to grow in popularity over the next few years.
The future of cryptography
There are some events and milestones in the last few months that make me believe that the use of crypto will become more widely accepted by the end of this year:
• In April 2021, Kansas City Chiefs Sean Kalkin converted his entire salary into Bitcoin and became the first NFL player to do this.
• In June 2021, El Salvador became the first country to approve a law that recognizes cryptocurrencies as legal tender.
• The Bitcoin Strategy Pro Fund was launched at the end of July 2021. As the first open-ended mutual fund to track Bitcoin prices in the United States, it also offers an alternative to digital wallets for crypto investments.
In addition, companies such as NYDIG and NCR are rapidly partnering with other financial technology companies to provide end users with a full-service encryption experience through financial institutions. In June 2021, financial services provider Fiserv announced an integration with NYDIG that would allow financial institutions to “enable consumers to buy, sell and hold Bitcoin through their bank accounts.”
From niche investment to the mainstay of finance?
It’s fascinating to see what happens with cryptocurrencies in the coming months and years. If crypto continues to be a financial force to be considered in the market, I help you make informed decisions about what this information is and whether it is correct for you. hoping. Or, at least, understand the conversation about crypto at the next dinner party.
This article is for informational purposes only and does not interpret information such as investment advice. What is included in this article does not constitute a solicitation, recommendation, approval, or offer by any third party mentioned.
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