If you'd have asked me six months ago what cryptocurrency meant, I would have had no idea. I probably would have ventured a guess that it had something to do with Bitcoin. That part, as it turns out, is true. Lucky guess on my part.
To be honest, I still don't know much about cryptocurrency, but I know that it's taking off. I don't have enough knowledge to explain what it is or what the benefits and risks are beyond a passing conversation, so this article won't do that.
But I will tell you that it is something that people should know about. Here's why:
Cryptocurrency Is Digital
Everything is digital these days. You can do everything online. Take a picture and it's instantly available and on the cloud. You can converse with friends, family, or complete strangers. If you need to buy something, you can take care of your needs all through a digitally connected device. When you need a ride, you can get that, too.
See where I'm going with this?
Everything is available through your digital fingertips, so it sort of makes sense that a digital currency system would evolve.
Cryptocurrency Is Not Online Banking
One thing that always confused me when I heard about Bitcoin, which is the first cryptocurrency (though there are no many more) was that I couldn't figure out how it was different than online banking. It turns out that it's an entirely different thing altogether.
Your typical banking website is a platform that gives you information based on your currency that's used. In other words, it's giving you information about the transactions. The transactions themselves are using currency. Cryptocurrency is now a real thing.
Cryptocurrency Works Because It's Secure
In order for a currency to be a real thing that people will actually use, it has to be secure. This holds true with the good old American dollar, for example. Banks keep your dollars safe. Gold that has value in proportion to the dollar is kept safely guarded. People demand that currency itself be secure before they trust using it.
So is the case with cryptocurrency. Since it's digital currency, all of the security is also digital. You won't see a security guard keeping watch over your cryptocurrency. The security comes from terms like blockchain and wallets, information of which I just can't squeeze into this article. If you're really interested in taking your knowledge of cryptocurrency to the next level, there are some great resources out there.
The Bottom Line
There are a million more facts about cryptocurrency. There's a lot to learn about how you use it. Or how you invest in it (just like you can invest in other currencies). As with anything financial related, go ahead and get familiar with it before you use it or invest in it. I'd suggest learning more now because one way or another, it looks to be making a place as part of our everyday world.