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Cryptocurrency Craze



You’ve probably heard of Bitcoin, maybe even Etherium, or one of the other cryptocurrencies that have been gaining traction. Such as, Litecoin, or the significantly cheaper Dogecoin, which was spawned from a popular internet meme. Well, prepare yourself, because they are poised for a much bigger place in everyday conversations – as soon as Wednesday.


Modern cryptocurrencies were first described in 1998 but weren’t fully established until 2009 when the concept of bitcoins and blockchains were defined. Many people fear the growing popularity of cryptos because they are entirely digital and it is difficult to understand protecting something that does not take up any physical space from being stolen. However, that is where blockchains come in. Blockchain is the commonplace name for the triple-entry bookkeeping system, in which the buyer, seller, and a third-party bookkeeper or bitcoin miner must all sign off on the transaction before it can be completed.


This system is complex but necessary since it allows for easy tracking and full anonymity. Digital funds are stored in virtual wallets, to ensure that if any problem occurs, it can be traced back to one of the parties involved. Identifying the owner of the wallet is designed to be difficult because there is safety in keeping your identity concealed while relocating large sums of money.


There are 200 different cryptocurrencies available that range in value from more than $63,000 to less than a penny for each unit. Cryptocurrency is essentially just software. It is created by code, basically, the DNA of computer programs. Specially written code is stored in the blockchains when transactions occur. Cryptocurrency is strings of code, stored on blockchains. When an owner goes to sell their coins, bookkeeping miners must sign off on the transaction and are then rewarded with some cryptocurrency, thus, adding more crypto to the overall market and continuing to expand that individual coin’s reach.


The miner's job is not as easy as simply witnessing the sale, verifying a sale of cryptocurrency is not easy and does not guarantee a reward. There is a 64-digit hexadecimal number that needs to be verified to ensure a seller doesn’t double-sell their coin. These third-party auditors (miners) are responsible for finding that 64-digit number and recording it to make sure it doesn’t appear in another transaction and in doing so preventing the seller from gaining too much profit off of one coin. Similarly, the tracking of serial numbers on dollar notes prevents counterfeiting bills, this prevents the same digital coin from being used in more than one sale. If a miner is the first one to report the correct 64-digit code then and only then do they earn their coins.


Coinbase is one of the most popular cryptocurrency trading platforms and will be joining NASDAQ on Wednesday. This will make history as the first company specializing in cryptocurrencies to be publicly traded. Their valuation is all across the board, with one article suggesting that 10 experts would give you 10 different answers.


The Coinbase trading platform has been around for almost 10 years and serves as a storage wallet for crypto. More than 50 different currencies are traded there, and the site has 56 million users throughout more than 100 countries. It is also one of the most secure cryptocurrency trading options available, offering fingerprint logins, two-step verification, and FDIC-insured USD balances should there be an information breach.


The company boasts impressive revenue and has generated over $3.4 billion since it began in 2012, with over $1 billion of that coming in from 2020 alone. The company makes its money through transaction fees incurred during the purchase and sale of cryptocurrencies, as well as from their subscription services. A unique element of this organization is their additional product Coinbase Pro, which offers a more complex trade experience with options for extra charting and trading with superior control.


While all of the cryptocurrency hype may sound alluring and its presence on the NASDAQ adds to its validity, bitcoin and currencies like it are a hugely volatile market. Coinbase itself warns that its value is “substantially dependent on the prices of crypto assets,” and notes that more than half of its income is based on transactions involving the two biggest players in the crypto market: Bitcoin and Etherium. Should price, demand, or volume for these two go down, so would the entirety of Coinbase’s value, and if it continues to rise, so will the likelihood of a cyberattack or security breach.







None of the above is intended to serve as financial advice. The Free USA is not authorized to serve as financial advisors.




https://www.foxbusiness.com/markets/coinbase-ipo-cryptos-first-what-to-know

https://www.marketwatch.com/story/should-you-buy-coinbase-the-valuation-is-ridiculous-11618254467

https://www.cnbc.com/2021/04/13/coinbase-is-unlike-any-market-debut-wall-street-has-ever-seen-.html

https://www.thebalance.com/history-of-cryptocurrency-5119511#an-explosion-of-cryptocurrencies

https://coinmarketcap.com/all/views/all/

https://www.investopedia.com/tech/how-does-bitcoin-mining-work/

https://cryptocurrencyfacts.com/how-is-cryptocurrency-created/




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