Cryptocurrency Background
Description:
Crypto can sound like a scary idea but it doesn’t need to be. We cover the good, the bad, and the ugly about cryptocurrency including how it works, how we can use it, and how to watch out for scams.
Cryptocurrency Video Transcript
Cryptocurrency. Did I scare you? Sorry, didn't mean to. Cryptocurrency or crypto isn't scary, confusing? yes, relevant to your life? probably more than you realize. Some of you may remember the first time you heard of social media and you may have wondered, is it here to stay? Well, crypto is very similar.
Buckle up, we're going crypto. Today we're going to stay comfortably on the surface and talk about what crypto is, how it works, and what you need to know. So let's begin. Cryptocurrency, or crypto, is a digital currency that is designed to replace our physical currency like the dollar bills, coins, and credit cards we have.
Crypto is all digital. We cannot touch it. Instead of using cash or coins or credit cards, you use digital coins called crypto coins. You store crypto coins in a digital wallet, like the wallet in your purse or pocket, but it is all online. Your digital wallet sits in an app on your phone. You simply swipe to use a currency in your crypto account.
Some of the most popular cryptocurrencies you may have heard of before are Bitcoin and Ethereum. So if you hear someone talking about Bitcoin, but don't know how quite to picture it. Just imagine a digital coin kept in a digital wallet. So how does it work? Today, our money is stored in a bank and regulated by the government and is very centralized under one management, the government.
Crypto is managed by a network of computers. It is decentralized and managed by individuals in that network. But wait, there's more. Cryptocurrencies are stored on a blockchain. A blockchain is a system for recording information. Think of it as a digital ledger or record. So what do people use crypto for?
People use cryptocurrency for quick payments, to avoid transaction fees at regular banks charge, or because it offers some anonymity. Most importantly, be aware that cryptocurrencies can skyrocket in value one day and plummet the next without warning. Unlike traditional currency, cryptocurrency is not protected.
You cannot call your bank or anyone to help you recover funds if you have been scammed or the market plummets. Be aware of the volatility when contemplating investing in the crypto market. One of the most common uses of crypto today is the transfer of coins to other countries. Others hold cryptocurrency as an investment, hoping the value will go up.
On one hand, the lack of regulation means that you can do whatever you want without limitations. On the other hand, the lack of regulation means that there can be pretty big cybersecurity risks. It's also worth mentioning that creating and managing cryptocurrency requires a lot of energy. It's a pretty big blow to the environment. And again, make sure you're working with a reputable cryptocurrency exchange when you get involved.