Cryptocurrency is a form of currency that is stored digitally and can be used in transactions online. It uses encryption to verify transactions, hence the name, which is said to increase security. 

Cryptocurrencies’ values can fluctuate just like any other form of investment. During a bitcoin focused conference called The B Word Conference, investor and Tesla CEO Elon Musk said, “My hope for crypto in general is that it can improve the efficiency of the information system that we call money.” For Musk, crypto really is the future.

Cryptocurrencies run on a record of all transactions,  called a blockchain, that is updated by cryptocurrency holders. Units can be created through a process called mining. Mining uses computers to solve complex math problems to generate currency.

Mining uses a lot of energy. During the same panel, Musk said that he would like to see a more environmentally friendly way to mine cryptocurrencies, especially bitcoin.

Bitcoin was the first cryptocurrency, created in 2009, and is the most common cryptocurrency  used to this day. Etherium was developed in 2015 and is the second most popular crypto behind Bitcoin, and it even has its own blockchain. Litecoin is a crypto similar to Bitcoin, but it has developed much faster and allows quicker transactions.

Crypto can be brought in a couple different ways. It can be purchased through online brokers who sell cryptocurrencies as well as stocks, bonds and other investments. People manage their crypto through apps like Coinbase. It can also be bought using a cryptocurrency exchange. Each exchange offers different currencies and digital wallets.

Crypto, however, would be useless if it wasn’t spendable. So what can it buy? Some online websites, like Rakuten and Shopify, are now accepting cryptocurrency as a form of payment. Luxury brands are also using crypto in their online stores. Brands like Rolex and Patek Philip are exchanging high-end watches for crypto, and some car dealerships are doing the same.

Cryptocurrencies can also be used to buy Non-fungible tokens (NFT). NFTs are a form of digital collectables that can sell for millions of dollars. A Bored Ape NFT sold for 2.7 million dollars on a website called OpenSea. Once they are purchased, then the NFT is recognized as the buyer’s and only the buyers.

There are a multitude of methods that scammers use to cheat people out of their crypto and their money. They’ll use anything from fake websites, romance scams, celebrity endorsements, and ponzi schemes, in which people are persuaded to invest in a nonexistent company with the promise of quick returns. 

Eaton business teacher Chris Love said, “For anyone in my classes, they know that the most common answer to financial advice is “it depends.” The best use case I see of cryptocurrency is it’s a hedge for people living in countries where the national currency and government are unstable. In a basic investment idea, cryptocurrencies like Bitcoin are a store of wealth, much like gold. The benefit compared to gold is it isn’t tangible and a person could easily transfer and be on the move with it. For anyone trying to buy and sell it by timing the market, I am not sure that is its intended purpose and I would be extremely cautious putting a large amount of my net worth towards those ideas.” As Love said, crypto is constantly fluctuating and non-tangible.

It’s not all bad though. Cryptocurrencies use blockchain technology that tracks transactions and timestamps them, recording them into blocks. This makes it very difficult for hackers to tamper with. 

Cryptocurrency is an interesting investment that is secure, and it is being used more as time goes on. Although unconventional, crypto is on the up and up, and is used by many current investors and entrepreneurs. Getting into crypto now is a good idea, and looks as if it will pay off in the future.