Crypto is the wild, weird and occasionally legitimate world of digital currencies like Bitcoin and its relatives; blockchains, the technology that powers them; and other emerging crypto technologies like NFTs (Non-fungible Tokens) and DeFi trading protocols. It’s also the realm of cryptocurrencies like Dogecoin that started as a joke and have now grown into valuable investments; and stablecoins such as USDC, which are intended to keep their values stable relative to real-world assets. It’s also a place where you might find yourself reading articles headlined with phrases such as “Flippenings” and “gm” — and, if you pay close attention, you may wonder if you’ve lost your grip on reality.
The reason for all the buzz is that cryptocurrencies represent a new paradigm for money. Instead of being backed by a central bank or a government, they are created through a technological process that relies on a network of computers to record transactions in a way that’s difficult for authorities to manipulate. These networks are run by people from all over the world who collectively verify transactions by submitting data in blocks of records to a ledger called a blockchain.
These records, once verified by other members of the network, are immutable. This makes cryptocurrencies more secure than traditional currencies because it’s virtually impossible for hackers to manipulate the system. Additionally, most cryptocurrencies are private by default, meaning you can use them to make purchases without sharing your name, address or other personal details with the merchant. In the early days of cryptocurrency, this made it a natural fit for people who wanted to stay anonymous or were trying to avoid the financial system altogether, such as criminals, tax evaders and people selling illicit goods. Later, it became a popular choice for dissidents and extremists who wanted to avoid the reach of more mainstream online payment services such as PayPal and Patreon.
Cryptocurrency is an exciting and complex frontier, and understanding it is essential for anyone who hopes to understand our new economic landscape. While it isn’t yet widely used as a means of payment and most investors are still holding onto their coins for speculation, there are signs that the industry could evolve into a more practical form of money in the future.
Despite the reputation of crypto being a world full of shady, high-earning white men and libertarians with dog-eared copies of Atlas Shrugged, it’s surprisingly diverse intellectually. There are right-wing Bitcoin maximalists who believe the currency will liberate them from government tyranny; left-wing Ethereum fans who want to overthrow big banks; and speculators who have no ideological attachments and simply want to make money.
Crypto isn’t for everyone, and even those who have bought in should be aware of the risks. But for those willing to dive into its world, the rewards can be great. You can learn about the underlying mathematics and philosophy; talk to the developers who create these tools; and join communities that debate issues in politics, law and art.