Solve the Mystery of Crypto – OZY

You may have a 401(k) retirement account, but most people don’t, and not for lack of interest in retirement savings. Much of the world’s population has never had the opportunity to invest their spare change in the hope of building up the wealth of tomorrow. Thanks to cryptocurrency, that is changing.

Cryptocurrency has created global, decentralized investment markets open to anyone with internet access and a few pennies to invest. Global, billions of people with a smartphone can potentially spend a fraction of a dollar buying and trading digital currencies. This low barrier to entry and widespread access has enabled a massive new population to become players in global financial markets. Many cryptocurrency enthusiasts see that as the whole point: banking the unbanked.

“Blockchain is a more efficient way to transmit value compared to existing banking infrastructure,” says Ian Kane, co-founder and CEO of Unbanked. “If anyone anywhere in the world has a mobile device, they can create a blockchain wallet and start participating in the global economy that previously had a high barrier to entry or was inaccessible.”

Enthusiasts like Kane say blockchain is more efficient than other types of banking or investing because it doesn’t require human oversight. In cryptocurrency transactions, there is no approval or approval by a third party: it is direct from the sender to the receiver.

For some, this might be the most exciting monetary development since humans hammered metal into coins. But if you’re considering buying into the crypto markets, there are a few things you might want to know first.

The blockchain is a public digital ledger: a list of accounts, balances, and ownership. However, unlike the lists of accounts held by traditional banks and credit card companies, the blockchain does not belong to anyone. It is operated by a network of global computers, and anyone can lend their own computer’s processing power to serve the blockchain. As long as the internet is online, the blockchain is online.

Additionally, blockchain is more transparent than traditional banking because once something is added to the blockchain, it cannot be removed. Account balances change, but you can always see what the balance was at any given time. No one can go back in time and change what was. In a sense, what is written on the blockchain is written in stone.

A cryptocurrency is a cryptographically secured digital currency. Cryptography uses complex algorithms to transmit information such that only the intended recipient can read and process it. Thanks to the security of cryptography, cryptocurrency cannot be counterfeited or double spent.

The term piece of money is used interchangeably with cryptocurrency. The most well-known cryptocurrency or coin is Bitcoin. When you buy and hold Bitcoin, you have an account balance on a digital ledger. There is no physical coin or other material asset associated with the ownership of Bitcoin.

Not exactly; tokens are a type of cryptocurrency. As with Bitcoin, ownership of the token is represented in an account balance on a digital ledger. But in addition to this account balance, tokens may have other assets attached to them. For example, a token can be associated with a physical asset, such as an ounce of gold, or provide access to a members-only website.

Anyone can mint and throw a token, and thousands of new tokens appear in the cryptocurrency markets every month. Most amount to nothing, but some find their way to a global audience and snowball to multi-billion dollar total market valuations, as in the case of the famous Ethereum token Shiba Inu, which is now accepted as payment at outlets like Nordstrom’s and Whole Foods.

Why does one token succeed when so many others fail? Part of the answer is the community: if a strong circle of developers and enthusiasts support the launch of a given token, it is more likely to find a wider audience and gain value. Sometimes celebrity endorsements lead to a token’s success. There is also a certain x-factor, an unknown element that explains why one thing becomes popular while other similar things do not.

NFT stands for non-fungible token. To understand what this means, remember that when you buy Bitcoin, what you actually own is an account balance on a digital ledger. Bitcoin is not associated with any physical asset, and any bitcoin is equivalent to any other bitcoin. This means that Bitcoins are fungible or interchangeable.

Unlike Bitcoin, each NFT is distinct and therefore non-fungible. Basically, “NFT” is a complicated way of saying that a token is unique. How can each NFT be unique? Well, think about this: every NFT is like a trading card and a concert ticket rolled into one.



Imagine for a second that you collect baseball cards and you have a Mickey Mantle rookie card worth hundreds of thousands of dollars. Now imagine the Yankees suddenly announcing that all rookie card holders can enter a draw for season seats. Now this Mickey Mantle rookie card is even more valuable as it also grants access to an exclusive offer.

NFTs are kind of like that. Each NFT is a unique asset that combines rarity – a particular baseball card – with proof of ownership that can be used for admission to an exclusive event, sale, concert, raffle or anything else.

There are many ways to exchange traditional cash for cryptocurrency, including at in-person ATMs. (Research bitstop.co for a machine near you.) But the primary way to acquire cryptocurrency is through online exchanges like Coinbase, Binance, Uniswap, and many other platforms. When you buy crypto on any of these platforms, you receive a unique wallet that gives you proof of ownership.

Essentially, buying and selling crypto boils down to two people agreeing on an exchange rate and then exchanging one type of currency for another at that rate.

While it is exciting that cryptocurrency has opened global financial markets to previously unbanked people, it is important to understand the risks before making any type of investment. No one should invest more than they can afford to lose, and remember that markets, especially crypto markets, can be very volatile. Many learned this the hard way and lost money.

Crypto is different from traditional stock markets in that it has democratized value for much of the world, but in some ways crypto investing is very similar to playing the stock market. Whether you’re buying stocks, bonds, or cryptos, it pays to be patient.

There is a popular saying among crypto enthusiasts abbreviated as HODL: Hold On for Dear Life.

According to Forbesglobal cryptocurrency markets surpassed $3 trillion at the end of 2021. For comparison, the New York Stock Exchange had a market capitalization of around $27 trillion.

How does cryptocurrency fit into your investment strategy?

Share your thoughts with us at OzyCommunity@Ozy.com.