Details on 4 Major Cryptocurrencies
Teach your child about 4 Cryptocurrencies Making Headlines
Confounded by Crypto? We are here to demystify digital currency. While the term DeFi (or “decentralized finance”) sounds about as thrilling as a bite-sized Almond Joy (sorry, but true), it might just be the way of the future. By allowing consumers to make digital peer-to-peer transactions without oversight by a central authority, cryptocurrency is paving a new path as a medium of exchange.
Crypto Basics
Cryptocurrency is a form of money that is stored on a digital wallet. Unlike using cash (which is difficult to trace), all crypto transactions are recorded in a verified, encrypted public list called a blockchain. People obtain cryptocurrency by buying it with another form of currency or selling something and getting paid in crypto. Cryptocurrency is created after being “mined” on a powerful computer, a complicated mathematical process that makes new crypto hard to come by. Unlike other forms of currency, crypto isn’t regulated by governments or a central bank.
Although there are thousands of different cryptocurrencies in existence, we’ll shed some light on four that are making headlines…
An Overview of 4 Major Cryptocurrencies
Bitcoin - Bitcoin, the OG cryptocurrency, debuted in 2009 by a mysterious inventor under the pseudonym Satoshi Nakamoto (whose identity still remains unknown). Bitcoin was a trailblazer as the first decentralized digital currency recorded on a public blockchain that could be bought or sold without interference by a governing body. By market share, Bitcoin is the largest in the world. While Bitcoin has had a turbulent history, its longevity and popularity as the most embraced form of digital currency has inspired the launch of thousands of crypto competitors.
Ethereum - Launched in 2015, Ethereum is another top crypto contender. By market cap, Ethereum is the second biggest cryptocurrency behind bitcoin, as well as a decentralized computing platform capable of providing a variety of financial services. Technically, the cryptocurrency token on Ethereum is called “Ether”, but many people refer to the digital currency as “ETH” or Ethereum. Unlike Bitcoin, users pay fees with ETH to execute smart contracts. These fees fuel the Ethereum platform and are often referred to as “gas.” In a sense, if Bitcoin is digital gold, Ethereum would be digital oil.
Dogecoin - Though it was created in 2013 as a jab at bitcoin, purposely misspelled and named after a then-popular Shiba Inu dog meme, Dogecoin has risen above its joke reputation to become a top-ten most valuable cryptocurrency. After gaining cult status on Reddit’s WallStreetBets forum, investors sent Dogecoin sky high. When Elon Musk famously tweeted about Dogecoin, it only cemented its celebrity appeal.
Stablecoin - Unlike some of its predecessors, Stablecoin is a class of cryptocurrency that is tied to an external reference, such as the U.S. dollar or the price of gold, in an attempt to minimize crypto’s hallmark volatility and offer greater price stability. Because Stablecoin is linked to real assets, it is less sensitive to market conditions and inherently less volatile.
While there is little doubt that the Covid-19 pandemic slowed the world down, it also fueled the popularity of cryptocurrency. Investors with time on their side looked to profit off of crypto, and digital currency quickly climbed into the mainstream as Walmart installed crypto kiosks in its stores and El Salvador announced it accepts bitcoin as legal tender...and the list goes on. And those with interest in crypto, investors must take the bad with the good.
On the one hand, cryptocurrency is revolutionary in its transparency, portability and divisibility. On the other hand, crypto can be used for illegal activities, is highly volatile and has an adverse environmental impact. No matter which side of the bitcoin you fall on, there’s no doubt digital currency is here to stay and we are here to help.
Whether you’re in the crypto game already or you remain on the sidelines to watch the competition unfold, it pays to be educated on decentralized finance.
Want more?
Email teambt@benjamintalks.com to let us know how else we can help further demystify crypto.
Have you heard of any cryptocurrencies like bitcoin? Do you know what makes crypto different from traditional forms of currency like cash, debit and credit?