Are you sitting down? If you had bought one bitcoin at $5 seven years ago, you’d be $4.4 million richer. Wait, that article was dated May 22, 2017. Your wealth would be much more today.
You have my attention, but what exactly is cryptocurrency?
Cryptocurrency is a digital money system designed to make transactions super secure.
The complex tender uses cryptography – a form of secret coding originating from the Second World War – to process transactions securely and to verify them.
Unlike regular money, the cybercash has no physical presence and differs from regular transactions by using decentralised control as opposed to central banking systems.
Normally in banking, corporate boards or governments control the supply of money by printing units of money or demanding additions to digital banking ledgers.
But in the world of cryptocurrency, the production of currency is generally capped. Bitcoin’s younger brother Litecoin consists of 84 million units, for example, as opposed to its sibling’s 21 million.
The same is true of “altcoins” – similar currencies which have been launched in Bitcoin’s wake that include Ethereum and Ripple, a system to connect different payment systems together.
Why are cryptocurrencies so popular and why do I want any?
Cryptocurrencies like Bitcoin and Ethereum are definitely by far the hottest investment product currently available. Their advocates see a future in which Bitcoin or other cryptocurrencies will substitute Euro, Dollar and so on and create the first free and hard world currency.
Holding Bitcoin means to have a share in this venture. If Bitcoin ever replaces monetary reserves of central banks or becomes the dominant currency for international trades – just to name two examples — the value of one Bitcoin will be far beyond 10,000 Dollar. Buying and keeping cryptocurrencies is a bet on the success of this silent revolution of money. It’s like a security of a large ecosystem.