Crypto is a term that comes from the word cryptography which is the art of writing or solving codes. The earliest known use of cryptography goes all the way back to ancient Egypt in 1900 BC with stone carvings of hidden coded text. Cryptocurrency is digital money created from code and uses an online ledger with strong cryptography to secure online transactions. Today, “crypto” is most often used in reference to cryptocurrency.
Cryptocurrencies are used as a medium of exchange. All cryptocurrencies are built on a technology called a blockchain. Without going into any of the technical “mumble jumble” of how a blockchain works, just know it is extremely resistant to any modification, making it very secure. In addition, just like the US dollar, every crypto coin also has its own unique identifying serial number.
You probably have heard of Bitcoin — the most popular cryptocurrency in existence. Bitcoin is the world’s first decentralized digital currency without a central bank or single administrator. It can be sent from user to user without the need for a third party approval which is required in traditional currency exchanges.
Bitcoin, and in return cryptocurrency, was invented in 2008 by an unknown person or group of people going by the name Satoshi Nakamoto. The currency began use in 2009 when its implementation was released as open source software. In addition to being used as a currency, Bitcoin can also be used as a store of value, much like gold and silver.
There are now endless types of cryptocurrencies. These are known as alternative coins or “altcoins” for short. Some of the major ones include Ethereum, Cardano and Ripple. They all have unique uses in the world of finance. For example, Bitcoin is considered the gold standard of cryptocurrency, Ethereum allows developers to build and run a huge variety of applications, Cardano is used to build smart contracts and Ripple is used as a payment settlement asset exchange and remittance system.
Cryptocurrency is an entire industry with trillions of dollars in their market cap. What’s mostly reported in the news about crypto is the price of Bitcoin and how that price fluctuates up and down. But what’s not reported, is that there is an entire industry involving a lot of money and many different projects that have nothing to do with Bitcoin…and it is thriving! Cryptocurrency is the future of finance and the future of a lot of technologies.
There are cryptocurrencies that don’t experience the volatile up and down prices that we see in Bitcoin. In fact, there’s a group of cryptocurrencies that were created to do just the opposite. These are called “stablecoins.” Stablecoins are designed to maintain the exact value of the US dollar. This creates the opportunity to invest in cryptocurrency without the associated volatility. Stablecoins give us the chance to take our money, convert it to digital dollars and then deposit it into high-interest crypto earning accounts.
Check out our video on stablecoins to learn more and to discover how stablecoins can provide high returns for your money.