Think about cryptocurrency as the first proof of virtual money, available to anyone, anywhere, anytime.
- We are in the unregulated, risky experimental phase, with over 10,000 different digital currencies available globally with minimal government rules or supervision.
- and very few people are buying things with it, still.
Why it matters: Crypto is not a fad. It will change how, where and what people buy and sell. But, right now, it's mostly like trading risky stocks over the internet, trying to pick long-term winners.
What's happening: Cryptocurrency is the greatest financial discovery and transformation in generations. Some of the smartest young minds in the world aren't going to law school or Goldman Sachs, they're into cryptocurrencies.
- That's it to $2 billion commercial market, roughly the size of Microsoft.
- The youngsters are into it. Nearly half of millennial millennials have at least 25% of their wealth in crypto, by CNBC.
- An increase in the value of Bitcoin it can mint thousands of millionaires, and some billionaires, overnight. But that wealth can disappear as quickly as it came if a cryptocurrency fails.
what crypto It is not: block chain.
- Blockchain is the technology behind your cryptocurrencies, just like the internet is the technology behind your email. Newbies often confuse the two.
- Think of blockchain as a massive public database shared by everyone and controlled by no one, so it can't be tampered with. keeps track of every transaction of a specific currency, such as Bitcoin.
What crypto is: Brady Dale, author of Axios' next crypto newslettercalls it "native web money."
- "You know when you're buying something online and you have to reach for your credit card at checkout? Well, imagine you have money living in your browser, ready to go at any time."
- No, there is nothing you can touch or feel. No coins or bills. Just a record of it in the digital database we mentioned.
Your value is driven Mainly because of demand and hype: the more popular it becomes, the more it's worth.
- This is not unlike what drives stock prices and betting lines in sports. But you are betting on an idea, that there is a future for cryptocurrencies, rather than a sports team with real players or a business with real finances.
- So you can make money or lose money, just like in the stock markets or in gambling. But with fewer regulators watching or caring for it.
Don't be careless: Crypto news site CoinDesk has a guide on how to spot scams, including how to contact your internal experts for help. If you plan to invest, at least go with your eyes wide open.
Why pay close attention? Consider cryptocurrencies your front door, and front row, to a developing virtual world where digital possessions will be physical-like, virtual experiences real-like.
๐ Editor's note: This article first appeared in Axios Finish Line, a new newsletter in the Axios Daily Essentials pack.
