Bitcoin. Dogecoin. Ethereum. These are terms you’ve probably heard or read since the beginning of 2021. They’re all over the news and social media, as is the mysterious word “cryptocurrency.” But what does the word cryptocurrency mean? And how will this form of digital tender affect your everyday life?
Cryptocurrency: Is It Really That Cryptic?
Let’s start with the basics of what cryptocurrency is based on the word itself. “Crypto” doesn’t actually mean, “cryptic,” although beginner investors may think that’s a more appropriate derivation. Rather, it stands for cryptograph, which is the formal term for a coded message. “Currency,” of course, refers to a form of legal tender that can be exchanged for goods or services, like dollars and Euros.
Cryptocurrency, then, is a form of currency that is coded to prevent theft or hacking. The code is digital, as is the currency. It has no paper or other kind of physical form; rather, it exists solely on the computer in virtual ledgers.
Why Is Crypto So Popular?
The concept of a digital form of currency that is not regulated by a centralized bank or government is what makes crypto so exciting. It allows individuals to be more in control of their money, as well as their privacy. This is because with a decentralized digital currency, people have the ability to conduct anonymous transactions.
Furthermore, transactions can be initiated and completed in a matter of seconds, which is an attractive benefit for investors and consumers alike. Imagine how much quicker you can shop, online and in person, when you don’t have to fumble with cash or a credit card.
These are just a couple of the benefits of crypto that has everyone so excited. And with more and more people investing in it, even though it’s highly volatile, it also has the potential to pay off big and become a relevant player in the age of digital transactions.
How Do I Make Money With Cryptocurrency?
To make money with cryptocurrency, you first have to buy some of it. You can do that by using a cryptocurrency exchange such as Coinbase. Simply create a profile on an exchange app or program, and then transfer some money from your bank account over to your profile. You can then use this money to “buy” Crypto. At the appropriate time, just like any other type of investment, you can sell it, trade it, or cash it out.
How Do I Know When To Buy, Sell, Or Trade Crypto?
If you’re going to invest in crypto, you should make an effort to keep up with the news and whatever is trending online. The crypto market is highly volatile and subject to severe lows as well as extreme highs. Start small with your initial investment until you get the hang of buying, selling, trading, and cashing out.
Now that cryptocurrency is no longer a cryptic term, you can start incorporating it into your investment lingo and reaping the profits.
Sources: Business Money