What is cryptocurrency? Eliminate the confusion about digital money

Cryptocurrency is often described like this: Everything we don’t know about money combined with everything we don’t know about computers.

And if you’re even more confused, well, we’ll try to clear it up a bit.

What is cryptocurrency?

Simply put, cryptocurrency is a digital asset that is exchanged over a blockchain (more on that below).

“That means we’re talking about digital money, digital cash, and it’s peer-to-peer. There is no third party, there is no intermediary, there is no bank, there is no brokerage, it is consumer direct,” said cyber expert David Derigiotis.

So what can you buy with cryptocurrency? You can buy things like coffee and now even cars.

“The biggest announcement this year was Tesla from Elon Musk, his organization, Tesla invested in Bitcoin and they now allow their customers to buy Teslas with Bitcoin,” Derigiotis said.

We’ll get to that in a moment. But first – Bitcoin is the largest and most popular cryptocurrency out there. Now think about it, even if you don’t buy something like this Tesla, cryptocurrency investors watch it like they watch precious metals.

“You could, for example, accept a fraction of a bitcoin if you were selling coffee, for example, and tomorrow the value of that bitcoin could have tripled. So it’s a very interesting asset, cryptocurrency, that you can’t pay with because a lot of people use it as a store of value like gold or silver. They buy it and keep it because its value has increased over time,” Derigiotis said.

So who keeps track? There is no finance department keeping track of values ​​and transactions. This is where the blockchain comes into play.

Unlike a vault in a bank, you can’t see it in the same way with your naked eyes. You can’t touch it. It is a network that essentially manages the money through computer algorithms. It’s all digital.

Each block contains an actual digital transaction that cannot be altered or tampered with. Think of each block building on the last, each with its own fingerprint.

Every time someone buys or sells something, e.g. B. more cryptocurrency, the blockchain counts each transaction like your bank would. It’s a digital ledger.

Unlike loose change in your pocket or dollars in your wallet, don’t see or touch the coin.

“It’s all digital and that’s the concern we can have when we have this kind of currency. You have to store her properly, you have to protect her when she comes out. We’re not talking about physical coins, physical money, it’s all online. it’s essentially digital cash,” Derigiotis said.

What types of cryptocurrencies are there?

All kinds. Just for fun, two guys created a currency they called Dogecoin, named after a popular meme. It was a joke – and now they’re the ones laughing as it’s the 5th largest cryptocurrency by market cap. But even then, most crypto investors hold with no intention of selling.

“Because this is a long-term game, there is talk of bitcoins going up to $200, $300, $500,000 a bitcoin and I’ve just heard numbers well above that, so the possibility of maybe $60,000 a bitcoin invest and become half a billion dollars, that’s what a lot of people are looking at, now there’s no guarantee that’s ever going to happen,” Derigiotis said.

How to buy cryptocurrency?

For that, there are tons of websites where you use real money to buy digital currencies with your credit card.

Next Friday at 10 p.m., FOX 2 takes a look at how to buy cryptocurrency. We’ll walk through the steps and find out why people are buying paintings and artworks online with cryptocurrency.

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