Remember back in April when it looked like everyone was purchasing that illusive thing called Dogecoin (similar to Bitcoin) in order to troll Wall Street while simultaneously making money with cryptocurrency? But then there’s… Not everyone became wealthy, and some sadly lost everything.
Even if you have no understanding how any of it works, it’s not strange to be enthralled by the prospect of being a Bitcoin billionaire. That’s why we’re here to alleviate your FOMO by providing you with all the information you require.
First – you need to understand some basics
To begin, this type of money takes the shape of intangible digital units. I.e., something you can’t touch, which are commonly referred to as tokens or coins. They’re not issued by a central bank, unlike traditional paper money, and there are a number of different currencies out there, according to Primavera De Filippi, a faculty associate at Harvard University’s Berkman Klein Center for Internet and Society.
There is a predetermined, finite amount of a cryptocurrency in circulation in some situations. For example, there will only ever be 21 million Bitcoins in the world. In other scenarios, as with Ethereum, the “bank” of a currency can generate an unlimited number of coins. Almost every crypto exchange has its own version of blockchain software, which keeps track of who is buying and selling in an extremely difficult-to-hack fashion.
Most common cryptocurrencies
Here are some of the most well-known cryptos:
- BITCOIN: The most well-known kind has been existing for 13 years; its price (at press time, $47,637) is so high because of its restricted availability.
- ETHEREUM: This cryptocurrency was founded in 2013, and its blockchain is quicker than Bitcoin’s. It allows you to acquire non-fungible tokens, or NFTs, such as digital art. The value of one coin is around $3,584.
- CARDANO: This one promises to offer the most energy-efficient blockchain in the game, with a price of $2.43 per coin.
Think of Bitcoin as some sort of investment
Many crypto investors acquire coins in the hopes of (possibly) making money over the long run. Similar to those who buy stock in hot new firms. The rewards might be substantial, but—but!—keep in mind: Cryptocurrency is “very volatile,” according to De Filippi, owing to the fact that its value isn’t based on anything actual. At least, not in the sense that stock prices are based on the performance of IRL firms. The value of a cryptocurrency is purely determined by how much people are prepared to pay for it in the hopes that it will become extremely valuable.
You should also know something. Buying coins isn’t a bad idea if you can afford it (assuming you follow the rules we stated here). However, if it all sounds a little risky for your financial account right now, you don’t have to fall into the FOMO trap. Even seasoned financial advisors are unsure about the future of cryptocurrency—still it’s a bit of a wild west out there. If you want to invest your cashola in a solid, secure way, put it in a 401(k) or another sort of retirement savings, and you’ll be OK.