In-depth guide to cryptocurrencies
What is cryptocurrency?
Commonly traded through Decentralised Finance (DeFi) platforms, cryptocurrencies store value on a blockchain. They’re typically kept and transferred in a digital wallet for easy maintenance. In addition, there are exchange rates with many national currencies for use in the “real world.”
When buying and selling cryptocurrencies, they’re sent to a crypto specific address or domain with cryptography. Due to their foundation on blockchain technology, it’s easy to track transfers by looking up a crypto address.
This is unlike how traditional banks operate, where only the bank sees all information related to a financial transaction. It’s also different in that an address is linked to the cryptocurrency and not the individual. This creates new challenges, which come with additional solutions
History of crypto
Publicly kicking off in 2009, Bitcoin entered the market as the only cryptocurrency. The following year, the first Bitcoins were traded - 10,000 for 2 pizzas. This amount is worth a lot more today, with a value of over $30,000 for 1 Bitcoin. Then, in late 2010, competing cryptocurrencies started to emerge, including Namecoin and Litecoin.
As cryptocurrencies became more integrated in daily life, retailers started to accept them as payment in 2012. WordPress, Newegg, Expedia, and Microsoft were among the first to allow purchases via Bitcoin. Cryptocurrencies then experienced some growing pains in 2013 and 2014.
Due to the historically unregulated nature of cryptocurrencies, their value is a bit more volatile than nationally backed money, known as Fiat. In 2013, Bitcoin reached $1,000 per coin, but then quickly fell to $300. Also, because cryptocurrency transfers are final/hard to reverse, scammers benefited from questionable trading platforms.
In 2014, the biggest exchange platform, Mt. Gox went offline, and took 850,000 Bitcoin. As cryptocurrencies don’t fall under any particular jurisdiction, this case became difficult to investigate. However, a resolution does seem possible.
Despite all these challenges, cryptocurrencies show no signs of slowing down. In fact, these experiences continue to fuel global dialogue, facilitating increased awareness of how crypto works. Additionally, there’s much safer trading platforms, and more merchants accepting crypto. At the very least, they change how we approach financial transactions.
Available cryptocurrencies
With over 4,500 different cryptocurrencies, it would take a lot of time going over them all. Since they’re generally the same, we’ll focus on the most popular ones. In addition to Bitcoin, mentioned above, there’s Etherum, Binance Coin, Cardano, Dogecoin, Tether, XRP, Polkadot, Internet Computer, and Bitcoin Cash.
Ethereum, introduced in 2015, is a contender for taking Bitcoin’s place as the number 1 cryptocurrency. This one is interesting in that, in addition to storing financial value (like Bitcoin), Ethereum keeps other data on its blocks. With this, it’s able to store smart contracts, particularly useful for NFTs.
Without going too much further in detail, each of the other cryptocurrencies listed all store value, and come with their own exchange rate. This point applies to Ethereum as well. Much like different foreign money, it’s important to treat each cryptocurrency differently when exchanging for cash.
Investing
If you’re interested in investing in cryptocurrency, it’s recommended to use a well known exchange platform. Coinbase and Binance are both excellent for maintaining a crypto investment portfolio. It’s also a good idea to do your own research on market trends, and different exchange rates & fees.
You’ll also want to keep in mind the factors pointed out above, including how crypto is a fairly unregulated market with its own risks. That being said, there are a lot of resources available online to help demystify the process and clear up any concerns. With much attention lately on cryptocurrencies, it seems the ecosystem can only keep getting better.
The future
Based on the information provided, it’s safe to assume the answer to “how long will cryptocurrency last?” - is a long time. It seems now, more than ever, corporations and governments are heavily involved in the future of crypto.
As other changes to the digital world, like web3 & the metaverse, continue to come, there’ll be even more applications for crypto. At its core, crypto operates in a borderless world, which is the future of the digital world.
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