Cryptocurrency has become a big name over the last decade. However, that doesn’t mean that everyone knows what it is or how it works. Where does it come from? How is it used? Will it affect the average person? These are all important questions to ask.

While cryptocurrency has had its highs and lows over the last number of years, it seems that it is a digital concept that is here to stay. Some of the technology used to bring cryptocurrency to life has also made its way into the business world. These are the aspects that are most important for you to know. Therefore, it is probably a good idea to start learning about this subject. As such, here is everything you need to know about cryptocurrency.

It Is An Investment

The most important thing to know about cryptocurrency is that it is a digital currency. As a result, you can choose to exchange real money for these digital coins.

The idea behind these investments is that the cryptocurrency’s value will rise, and fall based on the company’s place in the stock market. This means that your crypto’s value can rise higher than the amount that you originally invested; therefore, you can use this success to earn some extra money if you are able to predict the success of a certain type of cryptocurrency. Once the currency has risen in value, you can choose to sell it to someone else like you would with regular stocks. On the other hand, the value of the cryptocurrency you invest in can fall, which means that you could lose out on some of the money you invested.

That is why it is important to know as much as possible about the crypto market before you start investing. Alternatively, you can always start with a small initial investment so that you learn about the system without losing out on too much money.

Where Does It Come From?

Since there is a value attached to cryptocurrency, this type of currency can’t just spring up out of nowhere. As such, any crypto coins that enter the market need to be verified by the mining process.

Cryptocurrency mining requires an individual to buy specific mining software. The process of mining coins requires the miner to solve complex equations using this software to receive coins in return. They can then add these coins to whatever cryptocurrency blockchain they wish and are paid a fee for their efforts. This is how these individuals make a profit from their work. It takes an experienced crypto miner an average of ten minutes to mine a single coin. The number of coins available to be mined depends on the currencies standing on the market. There will be fewer coins to mine if the crypto market is doing poorly, for example. Also, miners are less likely to contribute new coins to crypto companies that are not doing well. What’s more, there is an expected deadline for this mining activity. Experts predict that the last Bitcoin will be mined in the year 2140.

It Isn’t Tied To The Economy

Another reason why people choose to invest in cryptocurrency is that this currency is not tied to a country’s economy. Just as the value of cryptocurrency will rise and fall with its position on the stock market, a country’s currency will rise and fall based on the health of its currency. As such, people can lose out on their savings or pension money during times of severe economic downturn.

That is why some people choose to exchange their money for cryptocurrency. A type of cryptocurrency will not be affected by the events of the global economy. Therefore, any savings that you have tied up in cryptocurrency will not vanish if there is an unfortunate economic downturn.

It Started In 2009

The first cryptocurrency to hit the market was Bitcoin and it was released in January 2009 by an anonymous computer programmer. One coin cost less than one US cent at the time of release and did not rise in price until later in that first year. This rise coincided with the first boom in the popularity of cryptocurrency.

Unfortunately, Bitcoin’s success wasn’t to last. The currency hit a new low in 2011 and it continued to sink until the company went under in 2013. This was not the end of cryptocurrency as a whole, however. Using Bitcoin as an example another digital coin, Ethereum, was released in 2015. Binance coin shortly followed, and the popularity of cryptocurrency began to soar again on the stock market.

These new companies were all cryptocurrencies needed to flourish as Bitcoin was able to make a triumphant return in 2015. Now, you can invest in hundreds of different cryptocurrency companies, including Tether, Cardano, USD Coin, and XRP. The crypto market saw a similar crash in late 2018; however, the results of this first downturn were enough to ensure investors that crypto would bounce back. As of 2023, cryptocurrency is still an investment concept.

It Uses Blockchain Technology

You may be wondering how all these cryptocurrency investors keep their digital investments safe. The answer is blockchain technology.

Blockchain tech was released alongside the original cryptocurrency coins and is a very complex set of procedures. In fact, it is so complex that many universities offer blockchain technology courses. The basic reasoning behind it is relatively simple, however. The blockchain in cryptocurrency is a security system that imbues every individual coin with a unique digital code. This digital code allows the coins to be tracked in the event it is stolen or transferred to another system without the owner’s permission. In fact, blockchain technology has been so successful at retrieving digital information that it is now used in modern businesses and certain educational bodies like the MIT Sloan School of Management offer an online short course in business and blockchain technology. This means that you can demonstrate to employers that you understand the modern business market with an MIT blockchain certificate of completion.

NFTs

When something is successful, it tends to evolve. The evolution of cryptocurrency is an NFT which stands for nonfungible token. An NFT is a digital piece of pixel art that is created on a specific blockchain. These tokens are then given values based on the creator’s status or investment record. Once an NFT has been created, it enters the market and can be traded or invested in just like the coins. Again, this NFT’s value will fluctuate depending on the status of the creator on the stock market and they are kept separate from the economic system. So far the most successful NFT created was released by a company called The Merge and it is worth almost $ 92 million.

Conclusion

Now that you understand how cryptocurrency works and where it comes from, you should have a better understanding of how it works as a concept. Of course, the average person will never fully understand everything there is to know about this new phenomenon. However, it is still important to learn how aspects of this cryptocurrency work like how blockchain technology is being used in business, for example. Don’t worry about learning everything about cryptocurrency, though. As you now know, it is a completely optional investment opportunity.