In recent years, cryptocurrency (crypto) has exploded—rattling the global economy and the way we trade.
You may be thinking, “What is cryptocurrency, exactly?” and “Why/how has it blown up the way it has in the last couple of years?”
Let’s break it down.
Cryptocurrency is defined as “a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend” (Frankenfield).
In addition, “a defining feature of cryptocurrencies is that they are generally not issued by any central authority, rendering them theoretically immune to government interference or manipulation” (Frankenfield).
In the case of the popular cryptocurrency Bitcoin, which was founded in 2008 by an unknown person or group of people, the blockchain technology it runs on “is used in a decentralized way so that no single person or group has control—rather, all users collectively retain control” (Conway).
For the purposes of free trade, autonomy from governmental purview, and other tenets associated with the exchange of goods, one can understand the allure of cryptocurrency.
But it’s not just free-market enthusiasts that have been drawn to crypto. Big names like Elon Musk and Bill Gates have contributed to the rise of crypto trading. The former even greenlit the use of bitcoin as a payment option for Tesla’s electric vehicles in 2020 but has since halted its trade due to crypto’s enormous carbon emissions.
The Rise of Crypto Trading and NFTs
While blockchain technology has been around since the early 1990s (Iredale), its popularity has skyrocketed in past years—partly due to the popularity of cryptocurrency trading, as well as the rise of non-fungible tokens, or NFTs.
While NFTs are similar to Bitcoin in that they are both based on blockchain technology, the similarity ends there. Each NFT has a “digital signature that makes it impossible for NFTs to be exchanged for or equal to one another (hence, non-fungible)” (Conti and Schmidt).
Most popularly, NFTs have been used to buy and sell digital artwork by collectors and the mega-rich. And while digital items are often widely accessible (think Google images), the allure of NFTs is that their digital signatures allow the buyer to own rights to the original item.
At the time of this writing, the idea of a cryptocurrency such as Bitcoin, as well as NFTs, being regarded as a reliable means for trade is still under discussion. For now, crypto enthusiasts and traders are continuing to track the growth of cryptocurrency and are looking forward to the days of a wider adoption.
“What You Need to Know About Non-Fungible Tokens” by Robyn Conti and John Schmidt
“Blockchain Explained” by Luke Conway
“Cryptocurrency” by Jake Frankenfield
“History of Blockchain Technology: A Detailed Guide” by Gwyneth Iredale
If you are a technology professional looking to connect to organizations that value your diverse background and the unique experiences you bring, click HERE to apply to work with a MinTech Agency recruiter and land your dream job!