Cryptocurrency is a broad term for digital assets with transactions that are verified and records maintained by a decentralized blockchain system using cryptography, rather than by a centralized authority like a Visa credit card or a bank. Bitcoin is the most popular cryptocurrency today as a currency that functions as a store of value. One study from 2019 estimates ~100 million people currently hold Bitcoin.
Unlike traditional money, or ‘fiat’, which is printed and backed by a centralized government, cryptocurrency has no physical form, and exists digitally on a blockchain as tokens.
Crypto is not yet a widely accepted form of money, but it gaining recognition as a real-world unit of account by some early adopters. Mark Cuban, owner of NBA franchise The Dallas Mavericks announced that the Mavs now accept the cryptocurrency Dogecoin for online tickets and merchandise purchases. And some centralized payment providers like PayPal now accept Bitcoin and other cryptocurrencies as forms of payment.
Just like stocks and bonds, cryptocurrencies can increase and decrease in value, depending on their demand in the market. This is why many people are interested in speculating on and investing in cryptocurrencies.
Fiat money — money like the American (USD) or Canadian (CAD) dollar — is issued by the government, meaning there’s a central authority that controls its value, interest rates, and supply (how much is in circulation). Many view this degree of government involvement in the mechanics of the free market as manipulation and as an archaic (and futile) attempt to manage a vast and complex economic system. A noble intention at best, a catalyst of hyperinflation that makes wealth building very difficult for the average person, at worst.
Cryptocurrencies, on the other hand, are decentralized — all transactions are done peer-to-peer or through smart contracts and there’s no authority overseeing them. Many people consider this a massive advantage over traditional money, because it gives them full control of their assets.
You believe that cryptocurrencies are the way of the future and will likely replace the traditional fiat money — if this happens, you want to be educated, prepared, and experienced.
You support the social vision behind cryptocurrencies — that currency should be decentralized and under full control of the people who use it.
You understand and appreciate how blockchain technology works — you value the peer-to-peer aspect of transactions, their security, and confidentiality.
