Investing in cryptocurrencies isn’t unlike being on a rollercoaster. Everyone has heard of Bitcoin, but what exactly is it?
Cryptocurrency is like digital money that uses encryption for security. The encryption is the key to crypto — it makes transactions secure. Every transaction is encrypted, creating a continuously growing chain of transactions, which is called the blockchain. The blockchain allows people to quickly and securely transfer money without relying on a middleman, making cryptocurrencies a decentralized market that is still secure, and giving people direct control over their own digital assets. So theoretically, people without a bank can still access and manage their money. The blockchain keeps things secure, so it’s considerably safer than stuffing cash under a mattress.
So how do you know if buying cryptocurrency is right for you? What you need to keep in mind is that it’s super volatile. It takes some seriously scary swings in value, meaning it could be worth a whole lot or a whole little depending on the day. One bitcoin was almost $20k back in December 2017, but in February it was worth less than $9k. There’s a chance that it could completely transform work, society and finance — but there’s also a chance it won’t do any of those things. It’s still early in the Bitcoin game, but we’ll know a lot more about its trends in five to ten years.