I’ve been curious about “cryptocurrencies” since they appeared in 2009. But until recently I wasn’t sure what they were. I don’t think I’m alone. I wanted to add an “About cryptocurrencies” link to the “Financial Matters” category at HabiLinks, my web guide, so I did some research. Wow! Cryptocurrencies are complicated. I’m still not an expert. And I’m not ready to use them myself. But there is growing interest in these financial tools and they seem to be here to stay. Here are some basic things to know about cryptocurrencies.
What are cryptocurrencies?
Cryptocurrencies are forms of digital currency that use cryptology (code) to conduct financial transactions. Transactions are sent and received directly between buyers and sellers without the need for intermediaries like banks. The first cryptocurrencies were introduced in 2009. Since then many more types have become available. Some of the most popular are Bitcoin, Litecoin, Ethereum and Ripple. You may see images of “bitcoins,” but don’t be mislead. The coins shown are just visual representations of the digital currency concept or novelty items. They have no digital value.
How to get them
You can buy and sell cryptocurrencies through online platforms or exchanges. Coinbase is one of the most popular. Depending on which exchange you use, you can buy cryptocurrency using cash, credit cards or bank transfers. Some exchanges are easier to use than others and requirements vary, so it’s important to do your homework before you choose one.
Why do people use them?
People use cryptocurrencies to buy and sell goods and services. Because the values change constantly, some people regard cryptocurrencies as an investment, hoping to trade them for profit. Others use them to save bank fees. Because transactions are anonymous, criminals can use them for shady purposes such as laundering money or collecting ransom.
To learn more
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