By: Noah Walker
Image Credit: CNet
First, let me preface this article by saying that I am not an expert on cryptocurrencies, nor do I pretend to be. Still, I would like to explore the subject to perhaps help come to a general understanding of this new fad.
Cryptocurrencies are not a new thing, despite what all the hype surrounding them may suggest, but are in fact an institution first brought up with the introduction of Bitcoin in 2009. Now, Bitcoin itself is by far and away the most famous and popular cryptocurrency available on the market, and is certainly the most valuable per unit when compared to its peers. Close behind are currencies such as Ethereum and Ripple, and with countless others at a distance, it is difficult to determine which currencies are worth investing in and which are mere trends, ultimately leading to two main questions: “What is a cryptocurrency?” and “Where should my money go?” To make it easy, let’s begin with the first question. A cryptocurrency is a type of digital asset that can be used for anonymous online transactions as well as other forms of online trading. These transactions occur on a secure system for moving money, being sent between addresses that make it nearly impossible to traced, as they are composed of 30 seemingly random characters. Transactions made are irreversible, non-refundable, and uninsurable. The funds for these currencies are locked in a public key cryptography system that shows all transactions as they happen, always. The public nature of these transactions is where the power of the currency comes from as all transactions are trusted as real money due to the fact that it is pure investment. As far as the market is concerned, Bitcoin is here to stay. It is essentially the gold standard in online currency and has exploded to such a point that it seems unlikely that it will lose its popularity in the foreseeable future. This, of course, does not mean its value will continue to skyrocket as it and several other currencies have done recently. It can otherwise mean that, if you want to spend the money, you can likely make money off of it.
Still, it is important to remember that cryptocurrencies are the modern online equivalent to gambling and should be treated as such. It is not uncommon for the value of a currency to rise or drop 10 per cent in a day, and return to what it was on the next. It is a risky game that some people have had the luck to make a lot of money off of. Yes, there are ways to read the markets since they are available for public examination as mentioned before, but the market is always volatile. Instead of “Where should I invest?” the question should really be, “Is it worth investing?” At first glance there isn’t really a clear answer to that question, but some reflection may help shed some light. I have a friend who invested $400 into Ripple and proceeded to make $3,200 on that money this past semester. Ripple has since fallen in the new year, but is looking to make a turnaround. As a result, he has lost money that he had gained, but is still in the black. I have another friend who has bought small amounts of Bitcoin when he can and has seen steady increases in profit. If the market should crash, he will likely lose a lot of the money he has made due to the high cost he has had to buy Bitcoin at. Ultimately, it is at the investor’s discretion whether it is a good or bad idea. For now, the market looks promising for cryptocurrencies. For many coins, the value is low and now is the time to buy. For others, the good times are here to stay, at least for a little while. At the very least, becoming educated on the subject is a positive thing, as real money is being made and lost every day. The inherently confusing nature of it all seems to have kept many people away for a while, but it’s likely you already know someone that has cryptocurrency, and that number is likely to grow. As more and more people subscribe to the idea of an online currency, many more will likely follow suit, confounding my mind, as I sit here between two papers and the hopelessly far away end of term just wondering how nice it would be to get rich quick.
This article was originally published on our old website at https://thenewspaper.ca/news/study-green/.