What is cryptocurrency? Clearing up the confusion of digital money


What is cryptocurrency?

Cryptocurrency or digital assets have been a hot topic lately, but what exactly is it?

DETROIT (FOX 2) - - Cryptocurrency is often described like this: everything we don't know about money combined with everything we don't know about computers.

And if you're even more confused, we'll try to clear it up a bit.

What is cryptocurrency?

Put simply, cryptocurrency is a digital asset that is exchanged over a blockchain (more on this below).

"That means we are talking about digital money, digital money and it's peer-to-peer. There is no third party, there is no intermediary, there is no bank, there is no brokerage company, it is direct from the consumer for the consumer" said cyber expert David Derigiotis.

So what can you buy with cryptocurrency? You can buy things like coffee and now even cars.

"The biggest announcement this year was Elon Musk's Tesla, his organization, Tesla has invested in Bitcoin and they are now allowing their customers to buy Tesla with Bitcoin," Derigiotis said.

We'll come back to that in a moment. But first - Bitcoin is the largest and most popular cryptocurrency out there. Now, remember, even if you aren't buying something like Tesla, cryptocurrency investors are watching it like precious metals.

"You could accept a fraction of a bitcoin if you were selling coffee, for example, and tomorrow the value of that bitcoin could have tripled. So it is a very interesting asset to exclude the cryptocurrency from paying because a lot of people use it as a store of value like gold or silver. They buy it and hold on to it because its value has increased over time, "Derigiotis said.

So who is following this? There is no finance department keeping track of values ​​and transactions. This is where the blockchain comes in.

Unlike a vault in a bank, you cannot see it in the same way with your naked eyes. You can't touch it. It is a network that essentially manages the money through computer algorithms. It's all digital.

Each block contains an actual digital transaction that cannot be changed or tampered with. Imagine each block building the last one, each with their own fingerprint.

Every time someone buys or sells something, say more cryptocurrency, the blockchain counts every transaction like your bank does. It's a digital ledger.

Unlike change in your pocket or dollars in your wallet, don't see or touch the coin.

"It's all digital, and that's the concern we can have when we have this type of currency. You have to store it properly. You have to protect it. We're not talking about physical coins, physical money. It's all online . It is essentially what digital money is, "Derigiotis said.

What types of cryptocurrency are there?

All kinds. As a joke, two people started a currency called Dogecoin, named after a popular meme. It was a joke - and now they're laughing because it's the fifth largest cryptocurrency by market cap. But even then, most crypto investors hold out with no intention of selling.

"Since this is a long-term game, there is talk of bitcoin at $ 200, $ 300, $ 500,000 per bitcoin, and I've even heard much higher numbers, the possibility of investing maybe $ 60,000 on a bitcoin and to become. " Half a billion dollars, a lot of people pay attention, now there is no guarantee that this will ever happen, "said Derigiotis.

How do you buy cryptocurrency?

There are tons of websites out there that allow you to use your credit card to buy digital currency with real money.

Next Friday at 10 p.m. FOX 2 will take a look at how to buy cryptocurrency. We're going to go through the steps and find out why people are buying pictures and artwork online using cryptocurrency.


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