Gotta write it down but: This guide holds my views on Cryptocurrency and are in no way financial advice. Please practice proper research / due diligence and figure out what works and what will do to make decisions accordingly.
Cryptocurrency can be a main ‘coin’ tied to a Blockchain as a cost of transaction but can also be used in multiple ways. It can be used to purchase assets, exchange for project tokens, can be exchanged between other participants on the Blockchain, can be transferred to both centralized and decentralized exchanges, it can be stored in an participants wallet, or even staked to help the blockchain network run better and gain more over time.
The big thing with a Cryptocurrency is that there is a set supply to be dispersed to participants, developers, projects, Once a supply is set then generally there are no more to be made and thus the Cryptocurrency has a ‘value’ due to that amount of crypto being limited. Some participants choose to amass as much cryptocurrency as possible and become a ‘whale’ of sorts on that Blockchain.
Cryptocurrencies are the way to access a Blockchain network and the features / projects tied to that blockchain. The analogy I like to use is to think of it like a Dave and Busters or Main Event, Cash(FIAT) is used for entry and purchase of points(Cryptocurrency) used to participate with the machines(Projects/Decentralized Applications) inside. The machines dispense tickeks(Tokens) which can then be exchanged for more points(Cryptocurrency) or prizes(assets). Not a perfect 1-1 representation but gives a clear enough picture.
That points(Cryptocurrency) purchased only work at the location(Blockchain) that distributed it. Dave and Buster points cannot be used at other event venues and other event venues will not accept it.
Why even get into Cryptocurrency? Because every glance at it gives off a price like a ‘stock ticker’ with a chart, the graph, the candlewicks indicating purchased and sold volume? Because it is an ‘easily’ transferrable asset that represents ‘money’? Because the hype train won’t shut up about it and if it isn’t in somebodies interests or holdings than they are an idiot?
I mean, it could be all of those things but the thing with Cryptocurrency is that any ‘news’, either positive or negative, can affect the price so violently that expecting ‘stock market’ reasoning and logic behind it just leads to madness. It doesn’t help that every search engine, video, article, and individual that is talking about Cryptocurrency is always talking about which coin will ’10x’ and how buying X amount of ‘this coin’ within a time limit will make everybody rich.
Chasing the butterfly is not what Cryptocurrency was created for. Its original purpose was to be an alternative to the FIAT transfer process and to get rid of the middleman that ate away at the original amount sent due to the fees often tied to transferring money. That can still be the case for Cryptocurrency but the reason to own a Cryptocurrency can be found just by looking at its utility.
For me, researching ‘why’ a Cryptocurrency can be useful is what I look for now. If it sounds like a useful asset that is tied to a Blockchain looking to solve a problem inherent to normal processes than that sounds like an interesting aspect I would like to be apart of.
My thoughts: Cryptocurrency, like Blockchain, is a technology and to understand it fully sometimes requires jumping in and figuring it out. So, Do proper research, discover what makes a cryptocurrency / Blockchain interesting, and find out if there is an actual use case for individual purpose as opposed to following what is currently trending. One doesn’t need to chase butterflies when all it takes it building up a garden and the butterflies will come naturally. If the Blockchain, Project, Decentralized Application, and/or utility proves fruitful than surly the masses will naturally flock to it.
Final note: Not exactly a proper explanation of ‘Cryptocurrency’ but these are my thoughts and how I view it. Will probably be edited to a more friendlier introduction to the topic so… No problem!
Stay Knowledgeable!