They’re decentralized-which means no government or bank controls how they’re made, what their value is, or how they’re exchanged. That’s what it’s like to exchange cryptocurrencies. You didn’t need to go to the bank to make an official transaction. Here’s what we mean: Have you ever hired a kid in your neighborhood to mow your lawn or watch your dog while you were out of town? Chances are, you paid them in cash. It’s like the Wild West of the digital world-but there’s no marshal to uphold the law. It feels like a modern-day gold rush all of a sudden.Ĭryptocurrency is exchanged person-to-person on the Web without a middleman, like a bank or government. You’ve probably heard of people making (or losing!) hundreds of thousands of dollars by investing in cryptocurrency. And cryptocurrencies can’t be copied, which makes them easy to track and identify as they’re traded. Sounds like the setup of an Indiana Jones movie, right? Each coin of cryptocurrency is a unique line of code. It comes from the word cryptography-meaning the art of writing or solving codes. So where the heck do we get the word cryptocurrency from, anyway? We’re glad you asked. You exchange your money for crypto and use it just like real money (at places that accept it as a type of payment). We value dollars and euros because we know we can purchase goods or services with them. A Benjamin can buy you a nice dinner in the States, but if you want to enjoy fine dining in Italy, you’ll need some euros. Think of it this way: Cryptocurrency is kind of like swapping out your money in a new country. You exchange real currency, like dollars, to buy “coins” or “tokens” of a certain kind of cryptocurrency. Let’s unpack what in the world crypto is first.Ĭryptocurrencies are digital assets people use as investments and for online purchases. And they’re trending everywhere you look.īut here’s the million-dollar (or million-bitcoin?) question : Should you invest in cryptocurrency ? Despite what every loudmouth on the internet yells at you from their digital soapbox, buying cryptocurrency isn’t a safe bet for your investing future.īut we’ll get more into that in a minute. They’re actually types of cryptocurrencies (aka digital money). But what is cryptocurrency really? Ever heard of Bitcoin, Dogecoin, Litecoin, XRP or Ethereum? Nope-they aren’t embarrassing rock band names from the ’90s.
It’s the hot buzzword of the investing world these days.
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