About a year or so ago, a new technology called crypto currency started to go viral all around the world. In fact it was so popular I remember I couldn’t even go to the store or look at social media without hearing about it.
Now if you were like me back then, you’re probably wondering what is crypto currency and why is everyone making such a big fuss about it?
Well to put it simply, people were becoming millionaires almost overnight thanks to this “digital coin”. But before you get all excited thinking you too can get rich — let me explain in more detail exactly what crypto currency is, what you can do with it, and most importantly whether I think it’s even worth spending your money and time on.
So without any further ado, let me first start off by telling you exactly what it is.
What Is Crypto Currency?
Crypto Currency is basically a digital currency online — much like how stocks or arcade points are. Meaning they aren’t physically something you can hold like a coin — but they still hold a certain amount of value and worth to the people that own them.
Now what makes Cyrpto Currency so special is first of all people can transfer it between themselves without needing a bank (or middleman) — and secondly it’s decentralized meaning it’s controlled by computer algorithms and not the government.
So basically its a way people can buy, spend, and trade an online currency easily and securely — since all the transactions are encrypted (hence the word “crypto” currency).
How Does It Work?
Cryptocurrency is very similar to how you use your credit card — which basically means a complex and complicated software lets people make and receive transactions electronically.
And much like how you have your own bank account where you keep your money, you also have something called crypto currency wallets where you need a private key to access it.
The only difference as I just mentioned is credit cards are controlled by banks and the government, and crypto currency is done through a complicated formula.
Now to keep from making things too complicated, let me break down the process of how crypto currency works in 3 different categories.
1. Public Ledger- This is where all confirmed crypto currency transactions are stored. These ledgers calculate the balance in your digital wallet, while at the same time making sure you only spend “coins” that you own.
2. Transaction- This is basically a transfer of crypto currency between two different people. This transaction then goes to a public ledger, where it will then wait until it’s verified by a “miner”.
3. Mining- This is the process where transactions are confirmed into a ledger. It’s done when someone called a miner solves very complex problems (like a math puzzle) — then once completed the crytocurrency transaction will then be added to a public ledger.
So how this whole this process works from beginning to end is two people will make an online transaction using crypto currency — then miners will verify the transaction and receive a small payment for doing so. Then once this transaction is verified, it will be put into a public ledger.
Here’s a short 2-minute video explaining how crypto currency works, and the overall benefits that come with it.
What Can You Do With It?
Once you have a digital wallet full of crypto currency, you might be wondering what do you do with it? Well there’s actually 3 main things you can do with crypto currency, depending on what your intentions are.
The first and most popular way to use crypto currency is to try and make money off of it. People everywhere are always talking about the newest and best coin to start buying — as they believe the price of it will go up thousands of dollars making them millionaires.
And if you were to buy one of the most popular crypto currencies back in the day “bitcoin” you would indeed be a millionaire now. For example…
Back in 2010, a developer bought himself pizza and used 10,000 bitcoins to do it (which at the time was about $0.0065 per coin) — or equaling out to be around $70.00 dollars.
Now if he had held on to these coins and decided to sell them this past December in 2017, he could’ve made around $170 million dollars when bitcoin rose to $17,000 per coin! Crazy right?
But because crypto currency is basically like the stock market on steroids (meaning the prices can fluctuate drastically very quick) — it makes it a very risky thing to either invest in or try and make some quick cash.
So if I were you, I would simply treat this like any other form of gambling and only spend what you’re willing to lose.
But if you’d like a real method to help you make money that doesn’t involve you guessing as to whether or not a coin is going to go up in price — check out this program that shows you simply how to build a business online that can earn you a regular income each and every month.
With each year that passes by, more businesses are now accepting crypto currency like bitcoin as a form of payment. Just the other day I bought a new table tennis paddle, and when I went to check it out there was an option where I could use bitcoin as a form of payment.
Now you might be wondering why would people want to accept crypto currency as payment when the prices can change sometimes overnight.
Well I think one they won’t have to pay as high of fees since transactions are from person to person — and secondly some websites or businesses might be doing things that aren’t quite legal, like selling piracy films or music. And crypto currency is an excellent alternative, because every transaction is done encrypted.
Honestly though I’m still holding off personally trying to buy things with bitcoin and other crypto currencies, or at least until the prices become more stable.
Last but not least, you can try and earn money by simply mining crypto currency. Again if you go this route, get ready to invest in some serious hardware — plus you’ll probably have to pay a higher electric bill for using so much energy.
Not to mention you’ll want to have a lot of time on your hands, as it can take a while to solve the algorithmic problems.
How Many Crypto Currencies Are There?
According to CoinMarketcap, as of right now there are 1,890 different crypto currencies out there right now — with them having a combined total of about $215 billion dollars.
With there being literally thousands of coins out there on the market right now, I can’t go through and list each one — however I’ll give you the top coins people buy and use as of right now:
- Bitcoin Cash
But if you’d like to view the whole list for yourself, you can check it out here — and also see what each coin is currently worth.
Why Is It So Popular?
Depending on who you ask, they will say they like crypto currency for one reason or another. However from what I’ve found, it usually ends up as one of these main reason….
People see crypto currency as the main currency in the future, so they think it’s important to learn as much as they can about it. Now I can’t say for certain as to whether this statement is true or not — but I do think it can have a positive impact in our economy when the prices are more stable.
People like it because it’s a secure and safe way to make transactions. I’ll admit that it’s pretty cool that they made transactions nearly unhackable — but you’ll still want to be cautious because hackers can still find ways into your crypto wallets if you don’t secure them properly.
And of course people like crypto currencies because they think the prices of the coins will continue to go up — and therefore a good opportunity to invest and try to make a lot of money. Again this is all speculation as no one knows what the price of these coins will be ( much like how no ones knows what the stocks are going to be on a day to day basis).
Are They Worth Investing In?
Crypto currencies as I said earlier are very unstable. One day a coin could go up several thousand dollars, then the next it could drop lower than where it initially started.
Take for example bitcoin and the some of the other coins back in December 2017. Within just a few short days, these coins shot up several thousand dollars — then dropped right back down several thousand dollars.
Now while a few people were able to make some good money during this time, A LOT more people lost thousands of dollars — because they thought these coins were just going to keep going up in value and never stop. Which again is just wishful thinking, because no one knows what the prices will be at any given time.
So do I think you can make money with crypto currency? Sure. Do I think it’s wise to invest a lot of money into? Definitely not. But don’t take just my word for it…
People like Waren Buffet and Jamie Dimon also think the same way — and have even gone as far to call it a scam.
Crypto currency has definitely made a huge impact on the world recently, and I don’t think it’s going anywhere anytime soon.
And one of the main advantages it has going for itself, is it lets you trade money safely and securely from one person the next without the need for a middle man.
With that said, it’s still a very unstable form of money that changes minute by minute — making it very difficult to use in everyday life like you would a credit card, and even more difficult to invest your money in.
However if you are looking for a real way to make some extra money, I high urge you to build an online business that has a FAR greater chance of earning you a regular income each month.
And best of all it takes very little investment to create a 4, 5, and even 6 figure income — unlike crypto currency that usually requires you to invest thousands to make a good ROI.
And the best place I’ve found to help teach you how to do this is a program called Wealthy Affiliate. They’ve helped thousands of other individuals change their financial life for the better — and continue to update their training each year so you’re never left behind.
So if you’d like to know how WA works, and more importantly how they can help you improve your financial life — click the picture below.
I hope after reading this post you have a better understanding as to what crypto currency is, how it works, and can now decide as to whether or not you want to start using it or investing in it in the near future.
If you have any other questions or concerns regarding crypto currency though, leave a comment below and I’ll be more then happy to help you out. 🙂