We’ve seen different social media posts and online stories about cryptocurrency, including ways people say they’re getting rich, but not everyone knows what cryptocurrency is and how it works.
What is it?
“Cryptocurrency is a digital currency you would say,” said OnDefend cybersecurity expert Michael McDermott.
McDermott said he has been involved with crypto for years.
He considers cryptocurrency or crypto to be a very safe form of currency, it uses what is called blockchain technology.
“When you sell or buy a Bitcoin (a form of crypto) it adds to that ledger of Bitcoin. So, you can see the entire transaction history, you can see every wallet it’s ever been too. Some people say in a sense it’s very secure because you can’t fake a Bitcoin,” McDermott said.
There are only a certain number of Bitcoins in the world, unlike a dollar you can’t print more.
The easiest way to understand it is to consider it as money you can’t see -- which isn’t too hard to believe because you don’t physically see the money in your bank account every day.
Where to buy it?
“The easiest place for you to buy it is on Robinhood. PayPal lets you buy Bitcoin, so does Cash App and Square,” said McDermott.
McDermott said some of the more advanced forms of cryptocurrency can be bought on Coinbase, Kraken or Binance.
Like a bank account, anyone who wants to buy crypto needs a digital wallet.
This is where you’re going to store your money.
You can either do that through a website, or there are wallets that are essentially like USB devices that McDermott considers far more secure, as long as you don’t throw it away by mistake.
Besides the big name you’ve likely heard of, which is Bitcoin, there are more than 10,000 different cryptocurrencies according to CoinMarketCap.com.
However, McDermott warns crypto is currently a volatile market.
For instance, according to Coinmarketcap.com:
- In April, the total value of all cryptocurrencies added up together was $2.2 trillion.
- In May, that value dropped to $1.7 trillion.
- In April, Bitcoin alone was worth $1.2 trillion.
- In May, it dropped to about $735 billion.
Still a lot of money, but a significant drop.
Where to use it?
McDermott said one reason why Bitcoin and some forms of crypto are not currently being used everywhere is the time it takes.
“The problem is if I send you Bitcoin, it can take anywhere from 15 minutes to an hour to go through, and that’s because what’s happening in the background for that blockchain to be created there’s a lot of validation,” McDermott said.
More and more companies have started to take crypto as a form of payment, including:
- EGifter, a website that lets you buy gift cards online
- You can even donate to Wikipedia and the nonprofit Save the Children using Bitcoin.