Intro to Crypto
Cryptocurrency as a Technology & Investment
There are a plethora of types and forms of crypto projects out there, with various use cases in the world. In this introductory Island Article, let’s talk about the two popular coins in Bitcoin and Ethereum, and the technologies behind them
Bitcoin - Bitcoin is known as the new Digital Gold, where it can be seen as a store of value for investors. Its creation was to separate a currency or decentralize it, away from governments or banks. This is to prevent any type of corruption and to let the free market dictate the value of Bitcoin. Another aspect of Bitcoin is its deflationary aspect, or the idea that there is a finite quantity of Bitcoin that can be mined. Similar to Gold, Bitcoin is also mined by having complex computers solve mathematical equations. If your computer can solve the equation, you are then rewarded with Bitcoin. Unlike other fiat currencies such as the US Dollar, Bitcoin cannot simply be printed more. Therefore, their store of value should theoretically keep going higher and higher over time.
Thus, the impressive growth of Bitcoin is extremely undeniable. No matter if you are a skeptic of the technology and use cases of Bitcoin, its strength in owners HODL-ing (Hold On for Dear Life) Bitcoin had led to the impressive rise of Bitcoin to over $40,000 as of September 2021. Its impressive growth is unrivaled within the stock market, and has led many investors (many of them millennials + Gen Z) to diversify their assets towards cryptocurrencies.
Ethereum - Ethereum can be perceived as the underlying Internet or infrastructure of many Cryptocurrency projects with smart contracts, where it serves as the technology behind different projects that lie within the Ethereum ecosystem. Think of Ethereum as the foundation behind multiple Crypto Coins and projects including financial services, digital assets like NFTs, games and apps. Many crypto enthusiasts perceive Ethereum to inevitably lap Bitcoin in value. Currently it is trading over $2,800 with a market cap that is slightly less than half of Bitcoin.
Two major use cases of Ethereum lie within the realm of decentralized finance (DeFi) and NFTs (Non-Fungible Tokens). DeFi is a type of finance that is not regulated or controlled by entities such as banks or countries. This allows the user to have complete control of their finances, and to do more with their investments. Examples of what users can do are easily transfer your currencies to other coins, gain greater interest with your investments, and also send money instantly across the world. NFTs can be perceived as unique pieces of content, from musical artists and NBA players alike. Many celebrities and musicians have taken part in this NFT craze, by selling unique, authentic, and guaranteed items such as songs or memorabilia. Think of NFTs as the modern-day trading card, that is unique and digital.
Overall, cryptocurrencies have made a stake in our world, and have become increasingly popular within the investment community. Whether you’re a believer or not, its immense growth in value is undeniable. In the future, as crypto becomes more widely adopted, and institutions (banks) start compiling more crypto assets, a self-fulfilling prophecy may occur where crypto is inevitably a mainstay in our daily lives. As in every new venture, the first step is learning and researching. Thanks for hopping on this island!
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