As the Internet drives toward a more connected planet, language increasingly seems the only barrier to a global culture, especially given the rise of cryptocurrency.
This digital form of money knows no true homeland, and its encrypted, blockchain system makes it both incredibly transparent and extremely secure. If trends continue, paper money may someday be a thing of the past.
Concept to Currency
As you may have guessed given the technical nature of the beast, cryptocurrency hasn’t been around all that long. The earliest shades of this technology arrived in the late ‘90s, when several companies conceptualized cryptocurrency, but none ever actually developed.
It wasn’t until 2008 when a newsletter discussing a new peer-to-peer currency was sent to a select mailing list that the idea of cryptocurrency came to fruition. The newsletter heralded the arrival of Bitcoin, the world’s first and most famous form of digital currency. The creator of Bitcoin still remains a mystery today, but the software has now been available to the public for more than 10 years.
Still, it took several years before anyone outside of the tech, finance, or startup realm had heard of cryptocurrency. By 2017, though, everyone knew of Bitcoin (even if they didn’t know exactly what it was). That’s because a single Bitcoin hit a record high price of $20,000 near the end of the year.
Since then, the price has fluctuated pretty significantly, and other forms of cryptocurrency have broken into the market. The fact that every piece of Bitcoin (and all digital currency for that matter) is traceable, and that it doesn’t rely upon something like the Federal Reserve makes it an increasingly popular way to store wealth.
How Cryptocurrency Gets You Paid
Perhaps you can follow along with the concept of cryptocurrency theoretically, but that all breaks down when you reach the actual function of a currency: how do you pay someone, or get paid, with digital currency? Can you actually buy anything with it? Can you cash it in for a centralized currency, like dollars? The answer to the latter two questions is yes, but the first is a bit more complicated.
Because it is not tied to a government or central bank, cryptocurrencies operate on their own networks, separate from any sort of actual institution.
For example, if you wanted to buy something from someone for 1 Bitcoin, you would simply access your Bitcoin wallet and transfer that money directly using the recipient’s Bitcoin number. This is the meaning of a peer-to-peer currency: it’s not a bank that decides whether money changes hands, it’s a series of security measures that must be met.
An increasing number of services exist to transfer Bitcoin from your virtual wallet to your real one, and this is likely to become an even bigger industry in the years ahead.
Where Does It Go from Here?
The future of cryptocurrency is difficult to predict, as it’s entirely uncharted territory. It could lead to a totally interconnected global currency, or it could completely melt down with little warning.
The one certain fact is that cryptocurrency isn’t going anywhere. It will continue to be a source of interest and investigation for financiers and tech enthusiasts in the coming years, and it’s likely that cryptocurrency will eventually trickle down to become part of the average consumer’s life as well, the question is simply how long that will take.