Cryptocurrency has become a wider phenomenon than expected. It was originally created as a way to instantly transfer digital funds to ensure the full amount made it to its destination without having to worry about intermediaries holding onto those funds for days at a time for ‘processing’ and taking a cut afterwards before passing it on.
Now though, Cryptocurrency is often seen as ‘Magic Internet Money’ that goes up and down based on ‘news’ and ‘events’ when actually not much of those things actually hold meaning to the price. Cryptocurrency SHOULD be finite, meaning scarcity, and all that aspect surrounds, applies. If there is less of something on a market than the price goes up and if there is more of something on a market than the price goes down.
Cryptocurrency is fractionalized. So storing Cryptocurrency over time is a valid option as those fragments go up and down with the Cryptocurrency price. The actual ‘price’ of Cryptocurrency shouldn’t be the main point of getting involved though. Cryptocurrency is a technology that many hype up because of a number going up and down.
Analyzing, buying, speculating, and selling Cryptocurrency like it was the stock market is a huge mistake. I see Cryptocurrency as being an access pass to many new ventures. Cryptocurrencies are based on a Blockchain and are the way to gain entry to all the features that Blockchain has to offer.
One way of viewing Cryptocurrency is like coins at an arcade. The coins only work at a specific arcade and only those games accept that specific coin. Prizes can be won using coins earned from the machines inside the arcade and that is the ‘value’ aspect. Blockchains are the arcade in this analogy and it is a rather simple comparison but can get more detailed depending on the subject. Like swapping cryptocurrencies, in this case it would probably take triple the Chuck E Cheese coins to equal some Dave and Busters currency. It’s tricky to understand and even trickier to actually facilitate such a transaction
Swapping Cryptocurrencies is just a difficult process in general as some Blockchains don’t actually support the coding required to show the digital assets on a persons wallet. There have been many cases with the currency swapped being erased entirely due to there being no staging area for it to reside in.
Cryptocurrency is growing to be a huge industry but to get into it to ’10x’ an investment for real money is just ludicrous. I get involved only for the utility and options holding a currency can bring such as access to applications, ability to use the technology with the associated Blockchain, and other options.
It’s still the early days of this technology and there are multiple ways to get involved, so don’t be afraid to enter when it feels right.
This post was originally posted on July 13th 2023 before I switched to WordPress! Here it is(Probably slightly outdated):
The concept of “Cryptocurrency” was originally created to break free from the hassle of transferring finances. When a transfer is made long distance or country to country there is a small fee for services that approve the transaction. Small chunks of the original amount were taken at every step of the way by each service until the amount finally reached its destination but now only a fragment received of what was actually sent. Cryptocurrency has changed though and now they are connected to a Blockchain and are usually how a participant transact, uses, and interacts with a Blockchain. There are several factors that make a Cryptocurrency: the amount currently in circulation, the utility of the currency on a Blockchain along with the many ways it could be used, and what it offers participants for having, (status, options, ETC).
There are different ways of obtaining Cryptocurrency, Buying in via an Exchange or from another participant, a reward from an education course, staking currency to receive more over time, using your machine for mining, and other similar areas. After obtaining any amount of Cryptocurrency a ‘Storage Wallet’ is recommended. It’s a device or program that generates a unique key code, a series of random letters/numbers or an numerical order of seed phrases, for the participant and secures the Cryptocurrency into an area only accessible via those generated keys. The types of wallets are: ‘Hot Wallets’ which are connected to the internet and ‘Cold Storage’ Wallets which is usually a separate device not connected to any internet or hardware unless plugged in.
Cryptocurrencies are usually joined by secondary ‘Tokens’ on every Blockchain. ‘Tokens’ are currencies usually purchased with Cryptocurrency and traded within the blockchain for different utility programs/applications utilizing the Blockchain’s unique features. Tokens have their only economy in regards to their own usefulness or popularity depending on what they do. The concept for Tokens are similar to exchanging money for fun bucks at an arcade. X amount of money might get you XXX amount of fun bucks but to convert the fun bucks back to money it might cost XXXX fun bucks.
The idea of ‘Cryptocurrency’ has gotten a little muddled over the years and many seem to look at the prices like the prices on a stock exchange where the current price is when you cash in or cash out back into Fiat and to look for trends. Searching for trends and investing with Cryptocurrency is difficult as it is an extremely volatile area. The concept of Cryptocurrency was to offer an alternative to the current financial systems that is in service right now, to be able to use it no matter where you are in the world or to instantly transfer it without waiting for every service to take its piece. While not fully accepted, there are many stores and services that are accepting Cryptocurrency as a form of payment and while it is often not always an easy transaction process, it is slowly becoming more acceptable to use around the world. Cryptocurrency is not the next ‘gold rush’ or ‘Single currency to rule them all’. It’s just a different form of currency that has yet to be fully realized.
Helpful links:
https://www.investopedia.com/investing-in-cryptocurrency-5215269 – Useful information but “INVESTMENT” is a broad statement and should be taken with a grain of salt. The general rule for getting into Cryptocurrency is to only throw in what is willing to be lost.
https://www.forbes.com/advisor/investing/cryptocurrency/different-types-of-cryptocurrencies/ – Goes into finer detail about the various types of Cryptocurrencies and how participants interact with them.
https://www.blockchain-council.org/blockchain/types-of-crypto-wallets-explained/ – Deeper explanation of the types of wallets to store Cryptocurrency and the ways to obtain them.
https://www.vast.bank/help/crypto-faq – Basic history of Cryptocurrency the who/why of it’s creation