I constantly see ads and videos on the luxury of Bitcoin and cryptocurrency, but I have no idea what to make of it all. The slightest bit of knowledge that I can grasp is this: Bitcoin is cryptocurrency – which is online money – which is within a complex network of cryptocurrencies.
Other than that, my information and experience with crypto has come from Matt Damon’s “Fortune Favors the Brave” commercial. But, I wanted to dive deeper into the concept of cryptocurrency, specifically Bitcoin, and really understand what it is, how it works, what the benefits are and why I should invest.
So, when you break things down, it looks like this: Cryptocurrency is just a fancy long word meaning 100% virtual money, and is often referred to as Bitcoin, Coinbase, Ethereum, Dogecoin, etc. These “coins” are investments containing tradable assets that you can use to buy and sell goods.
What makes cryptocurrency so notable is that it is not controlled by or linked to any government, therefore allowing free and unregulated exchange.
NPR correspondent David Gura states, “Cryptocurrencies have been around for more than a decade now and the market has grown rapidly since then with its estimated value approximately $1.5 trillion”.
Essentially, Bitcoin and other cryptocurrencies are just the transfer of digital assets in a rapidly growing unregulated trade industry. The hope of obtaining large amounts of money continues to suck young investors into the thrill of big returns.
According to Investopedia, “Cryptocurrency is an attractive investment to people who believe in the future of digital currencies. For people who believe in that promise, investing in cryptocurrency represents a way to earn high returns while supporting the future of technology.” Bitcoin has created an attractive opportunity for millennials and gen-z who look to make money quick and easy.
At this point in time it is typical to know at least one person in your bubble that has invested, is planning to invest, or is learning how to invest in cryptocurrency. This new generation of investors has drawn so much attention to the digital world of money that this year's past Super Bowl audience was enticed after seeing a floating QR code. This year, the most-talked-about ad was a simple QR code that changed color as it bounced around the screen for 30 seconds.
The ad was for Coinbase, a cryptocurrency exchange, and when you scanned the code, it took you to a promotional page that promised you $15 of Bitcoin for creating an account.” (Bringing Innovation to Market, Inc.)
Personally, I never scanned the code because I thought it could potentially be a virus or allow the FBI to track more of my data or take me to a deep dark part of the internet, and I was genuinely surprised to see how many people scanned it and never thought twice. It was super satisfying however when the square bounced perfectly in the corner.
“The Most Convenient Exchange Ever” holds true to its name as investing in cryptocurrency allows the investor access to complete open traceable transactions, no exchange or interest rates, and transforms banks into becoming obsolete because everything is stored on ledgers.
Ledgers are multi currency wallets that are used to store private keys for cryptocurrencies offline. Large banks have begun creating their own cryptocurrencies for their clients because it’s risky investing due to the potential of fraud and theft. And because there are currently no clear rules or enforcers surrounding cryptocurrency online money is practically anyone's game.
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Currently among mainstream media, cryptocurrency has gained some sort of a reputation as being associated with money laundering and ransomware attacks. According to NPR, Secretary Exchange Commission (SEC) Chairman Gary Gensler stated, “We need additional congressional authorities to prevent transactions, products, and platforms from falling between regulatory cracks. We also need more resources to protect investors in this growing and volatile sector."
For those looking to invest, cryptocurrencies such as Bitcoin and Coinbase seem like an exciting and profitable frontier that is yet to be discovered and explored. Gensler, however, describes this “Wild West'' and seems to be cracking down on policies. In a recent speech, Gensler denounced the lack of transparency and clear regulations, and promised the commission will take action to protect investors – which is a key part of the agency's mission.
The current market for cryptocurrency has boomed and in return ametuer investors, typically younger ones, have kicked off the lucrative industry in hopes of big returns. In 2021, the value of cryptocurrencies such as Bitcoin has risen 300%, and thanks to the popularity has estimated a worth of about $2 trillion.
Although cryptocurrency has only been around for roughly 13 years, it has recently found the much needed momentum and popularity in the media.
Online currency is virtually guaranteed to be our next step in the everyday buying and selling of goods and services. I am a little hesitant to jump on the bandwagon and drop out of college to invest all of my money in a cryptocurrency. But I’m excited to see what the future holds for this ever evolving and complex industry.
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