Cryptocurrencies are some of the most interesting developments to come out of the past decade regarding technology implications for the border economy. Since their inception, they have also had a pretty storied history, with forks, frauds, and outright nationwide bans adding to their inherent volatile nature. Nonetheless, these assists are here to stay and can provide an exciting opportunity for those willing to invest time educating themselves on what they are and how they can be used. This post will discuss these things, and by the end, you should be far wiser about their place in the modern world.
What Are Cryptocurrencies?
The term cryptocurrency means many things to many people, but by and large, you can define them as being decentralized and using cryptography to secure the transactions. While there are now thousands of different tokens all using various blockchains (more on that later), the most famous and the one that is often incorrectly conflated to mean cryptocurrencies, in general, is Bitcoin. Bitcoin was the first cryptocurrency as they are known today, and was first discussed in a white paper back in 2008 (and put into practice in 2009). The most exciting aspect of the entire crypto environment is that it began not from some multinational corporation or government but by a still unknown person or group under the alias Satoshi Nakamoto. This person was responsible for developing what all tokens now run on, the blockchain.
What Are Blockchains?
Blockchains are decentralized, distributed, and public ledgers that record transactions efficiently and permanently between two parties. Although the true motives of Nakamoto are unknown, blockchains are extremely useful and can be used for purposes far beyond cryptocurrencies. For instance, they can be used for:
- Securely sharing medical data.
- NFT marketplaces.
- Tracking of music royalties.
- The payment of cross-border goods and services.
- Operating systems for real-time IoT.
- Identity protection.
- Tracking system to prevent money laundering.
- Supply chain management and logistics monitoring.
These are a few of the many uses that blockchains can help with, and more use cases will develop as time progresses and better blockchains are developed.
Where Can You Buy Them?
In order to invest in cryptographic tokens such as Bitcoin, Ethereum, Solana, and so on, you need to sign up to a brokerage known as an exchange. These are places where you will deposit your fiat money (regular money like GBP, USD, EUR) and exchange it for the token of your choice at the exchange rate at the time. Cryptocurrencies can be broken down into Bitcoin and altcoins, which are generally considered valuable, and meme coins that are not and often intended as a joke (sometimes that goes too far). Most exchanges should list reputable altcoins, but not all meme coins, which is good because, generally speaking, meme coins offer little to no value outside of the joke itself.
However, altcoins are often traded based on the usefulness of their underlying technologies and blockchain. In other words, people invest in them (in theory) based on what problems they can solve. This is why an altcoin like Ethereum quickly gained and cemented its position as the second most popular token after Bitcoin. Ethereum has multiple uses outside of commodity speculation and is already being iopmeolemtne4d in several exciting ways. Moreover, many other tokens use Ethereum’s blockchain as the basis for their own, further increasing its utility.
What Can You Use Them For?
You can use most genuine altcoins for various things, including buying goods and services, investing, and even as a pseudo-anonymous way to play in an online casino! However, the best bitcoin casinos will be secure and incorporate multiple layers of security, which is what you should look for. Aside from this, their primary use is still in the speculative and investment world, where they are used as a hedge against inflation, which is odd because they can be highly volatile. They can also be used to diversify an investment portfolio and as a way to buy into the new kids on the block, namely NFTs and the metaverse.
Are They a Good Investment?
The answer to this depends on your appetite for risk. Currently, they are going through a massive market correction and showing themselves to be not entirely as disconnected from the world as people thought (i.e., they seem to peg what is happening in the stock market and world events). Nonetheless, they have an uncanny ability to bounce back, so if you have money to spare and are willing to take a bet, cryptos definitely make money for those who know what they’re doing.
Cryptocurrencies have been here a long time now and are firmly cemented into daily life. As new technologies and trends take hold, they will only get more valuable as a method of entry (think NFTs). However, they still pose risks to those without the requisite knowledge to perform the proper technical analysis, and so it is up to you if you believe them to be an investment or not.