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Understanding Cryptocurrency
A Guide to the Risk and Opportunity of Digital Money
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What is cryptocurrency?
In late 2009, the financial world was revolutionized with the invention of Bitcoin, the first successful cryptocurrency. Bitcoin and other “crypto assets” use an intricate transaction processing system invented by Satoshi Nakamoto called blockchain.
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It utilizes a huge network of computing systems that keep records of who owns Bitcoin and how much each person owns. <<read more>>
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How do cryptocurrencies work?
The main benefit of cryptocurrencies is the fact that they offer a digital store of value. Prior to the invention of blockchain, there was no way to certify ownership of digital assets. The Bitcoin network keeps a secure log of everybody who owns Bitcoin, and the database can only be accessed with a unique pin that identifies an individual as a Bitcoin owner. Often, cryptocurrencies are referred to as “digital gold,” and this is a great comparison. Cryptocurrencies generally do not have much correlation with financial markets, so they could potentially serve as a hedge for inflation in the future, and offer a potential option to diversify portfolios. <<read more>>
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Sources: Yahoo Finance, Reuters.com, and JP Morgan Market Insights
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