Author: Gerard Ferreira
Ponzi or not to Ponzi? 🤻
Depending on your age, cryptocurrency might seem like a Ponzi scheme/scam to get people’s money or you might have a reasonable idea of what cryptocurrency is, but not have a well-rounded understanding.
We’re here to help.
To understand cryptocurrency, you should have a grasp of blockchain technology. We have an article on that.
De Mighty Crypto
Blockchain grasped, cryptocurrency is the digital medium of exchange traded using blockchain. The ‘crypto’ comes from cryptographic encryption techniques used to secure transactions.
Bitcoin and Ethereum are the most popular cryptocurrencies, but thousands are in circulation. Just like ‘regular’ money, crypto can be used to purchase goods or services, from pizza to real estate. Due to current low retailer adoption however, most people invest in it with hopes of increased value and future sale or profit.
Faster Than the Speed of Cheques
Crypto’s main advantage is that it makes transactions almost instantaneous and a lot cheaper, with no third-party involvement, while blockchain security ensures fund and transaction security.🔒 As a result, its faithful see crypto as the future of commerce.
On the other hand, some have criticized crypto for its ability to semi-anonymously fund illegal activities and its volatility; on any day/with any ‘influencer’ tweet, the value of a crypto can change drastically.
De Crypto Zeppo
But enough boring stuff. How yuh does get cryptocurrency?
Exchanges like Coinbase and Binance and some investment platforms like Robinhood allow use of credit cards or direct deposits to exchange fiat currency (e.g. USD) for crypto, which then goes into a personal digital ‘wallet’. Your crypto can then be traded or used at accepting retailers.
Not every crypt-kiddie wants to buy/sell crypto though; some become ‘miners’.
‘Mining’ refers to the solving of mathematical puzzles🧩inherent to the blockchain process. This requires significant computational and energy resources, so miners (people whose computers mine) receive crypto for their effort. Mining can become quite profitable depending on the size/cost of one’s setup. (For more info, see our article on how a blockchain is created).
And that was your cryptocurrency crash course. In upcoming articles, we’ll get into cryptocurrency’s impact and what is being done in the Caribbean. Stay tuned!
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