Decrypting Cryptocurrencies

Julian Feldman, Staff Writer

What are cryptocurrencies?

Cryptocurrencies are digital/virtual currencies. The true use of a cryptocurrency is to purchase goods, but people have found that investing in cryptocurrencies can lead to large profits. Cryptocurrencies can also be bought or sold. People try to calculate or guess when they believe the price of a crypto will fall or rise. Based on their guess, they will buy it if they believe its value will increase or they will pull out if they think the price will crash. 

What makes cryptocurrencies popular? 

Supporters of cryptocurrencies view cryptos as the currency of the future. Because of this, people are racing to find the best cryptos to invest in before they become far more valuable. Another reason cryptos are becoming more popular is because cryptos can remove central banking systems from controlling the world’s money supply. Central banks are a problem because over time, they tend to diminish the value of money through inflation. 

How did bitcoin become so expensive? 

Bitcoin is the world’s largest cryptocurrency as of April 30th, 2021, standing at a market cap price of 1.2 trillion dollars. A market cap is the number calculated by multiplying the current price of a crypto (for instance, $50,000-60,000 for Bitcoin) by the number of coins in circulation. Bitcoin has been in bull market (an upward trending market) territory for about 2 years. In January of 2019, Bitcoin’s price was only at $3,200. Let’s put that into perspective; if you had invested $100,000 into Bitcoin in January of 2019, today you would have about $1.4 million. This example is the exact reason people are buying into Bitcoin, as well as other crypto currencies. People believe the price of these crypto currencies will rise even more in the future. 

How do I buy cryptocurrencies? 

Surprisingly, you don’t have to be 18 to buy into Bitcoin. However, some cryptos do require you to be 18 years old before you can purchase a coin. You also need a wallet to hold your crypto. Most people use online apps to buy crypto. The most popular apps today are Coinbase, Cashapp, Binance, and Bisq. Although a lot of cryptos don’t require consumers to be 18, it is still a risky investment and most people would recommend talking to a parent, guardian, or professional before purchasing anything.🔳