The Rise Of Cryptocurrency and How it Could Replace Cash

Each and every day it seems as though the value and popularity of cryptocurrency is elevated. There are so many different crypto coins that are available to purchase on a number of apps. Crypto is even becoming a way to purchase items that you would typically use cash for. Thanks to apps such as Coinbase, Webull, Robinhood, Fidelity, and others, it’s never been easier to own crypto coins at the touch of a button. 

What is Cryptocurrency? 

Cryptocurrency is a digital alternative to physical cash money based on blockchain technology. You may be familiar with the more popular coins such as Bitcoin and Etherium. You can use crypto to purchase everyday goods and services, although many choose to invest in cryptocurrencies as they would do in other assets such as stocks and precious metals. 

While cryptocurrency is an exciting and rising asset, purchasing it can come with a lot of potential risk. It’s extremely important that you do a thorough research to fully understand how the cryptocurrency system works. 

Unlike the U.S. Dollar or the Euro, there is no central authority that manages the value of cryptocurrency. The value of crypto is distributed among millions of cryptocurrency’s users across the internet. 

The first cryptocurrency was Bitcoin, developed by Satoshi Nakamoto in 2008. Nakamoto described the magical form of digital currency as “an electronic payment system based on cryptographic proof instead of trust.” 

The proof comes in the form of transactions that are verified and recorded in a form of a program called blockchain.

A blockchain is a specific type of database that stores information in blocks that are chained together. As new data comes in it is entered into a fresh block. Once the block is filled with data it is chained onto the previous block in chronological order. In Bitcoin’s case, blockchain is used in a decentralized way so no one person or group has control, instead all users collectively retain control. This means that transactions are permanently recorded and viewable to anyone.

How Could Crypto Replace Cash?

Today, you can use cryptocurrency to make purchases, but it’s not a mainstream method just yet. A handful of online retailers such as accept Bitcoin payments and it’s not as popular as many would think. This is subject to change in the future, however. Payments giant PayPal recently announced the launch of a new service that would allow customers to buy, hold, and sell crypto currency from their PayPal accounts. 

In addition, with the value of coins such as Bitcoin, Doge, and Etherium, increasing rapidly, many people are calling for more companies to start allowing it to be used as a payment method. Elon Musk, CEO of Tesla Motors, is known as “the godfather” of dogecoin because he endorsed the coin on twitter and on Saturday Night Live recently, which in turn, drastically increased its value. Tesla has become one of the few companies that allow crypto currency as a payment method for their products. 

Until crypto is more widely accepted you can work around the current limitations by exchanging the crypto currency for gift cards. On sites such as eGifter, you can use Bitcoin to buy gift cards for Dunkin Donuts, Target, Apple, and other retailers and restaurants. 

Also, in the U.S. you can sign up for the BitPay card, a debit card that converts crypto assets into U.S dollars that you can use for purchases and withdrawals, however fees do apply. 

Should You Invest In Cryptocurrency?

Experts on cryptocurrency have mixed opinions about investing in it. Crypto is a highly volatile and speculative investment, with the potential of unpredictable highs and lows. For example, Bitcoin was valued at $18,000 a coin in November of 2020. Today the coin is worth around $45,000. Not many predicted the coin would reach the heights that it did and they also couldn’t predict the major drops at points during its rise. 

As for how much you should invest, it’s completely up to you, however, you need to conduct diligent research before making an investment that could come with great financial impact. A good way to gauge this amount to make sure your investment is not too risky is, investing an amount you would be willing to completely lose if the value went down. It could be 1%, 5%, 10%, it could be 50%. It really depends on how much money you have and what’s at stake if you were to lose it. 

The world around us is constantly changing and so is the way we’ll be paying for everyday items. Technology and virtual cryptocurrency is quickly gaining popularity and value and it’s extremely vital that we all educate ourselves on the potential advantages and disadvantages of using crypto coins. 

Tameesh Girdharri

My name is Tameesh Girdharri, and I write for the technology department of The Edison Light. I am hard-working and very goal oriented, I enjoy competitive activities that push my capabilities. I also am a big fan of technology and I’m constantly amazed by the rapid innovations being made to it. I’d describe myself as organized, detail oriented, and determined. Our world today revolves around technology and it is extraordinary to think of all the incredible things that technology can benefit the world with.