Cryptocurrency—crypto for short—is a type of digital currency that’s gained attention in recent years.
June 16, 2022
What is crypto?
In general, cryptocurrency—crypto for short—is digital currency that can be transferred from person to person without using a third party, like a bank.
Who owns it?
Unlike the US dollar, crypto isn’t owned by a government or other authority.
You know how no individual person owns the internet? Same thing goes for the technology behind cryptocurrency.
Instead, it’s enabled and supported by all its users, on networks of computers running certain software.
How many cryptocurrencies exist?
There are over 18,000 different cryptocurrencies and counting as of March 2022.*
Some popular cryptocurrencies are Bitcoin, Ether, Litecoin, and Bitcoin Cash.
How is crypto different from cash?
There's a lot that makes crypto and cash different. Here are some of the major distinctions.
- Cash is issued by a government, crypto is not.
- Governments can print unlimited amounts of cash. Some cryptocurrencies like Bitcoin, Litecoin, and Bitcoin Cash have a limited supply.
- Digital cash transactions are made through a bank or financial institution. With crypto, you only need the internet.
- You can withdraw cash. Crypto can’t be withdrawn—it only exists digitally.
- Cash can be duplicated or counterfeited. Cryptocurrencies are designed to avoid duplication and counterfeiting, thanks to the complex network of computers that record and verify each transaction
- The value of some cryptocurrencies is volatile—their worth can go up and down quickly. The value of cash (at least in the US) is generally not volatile. A dollar in your pocket today is still a dollar tomorrow.
What is crypto used for?
In the Plynk app, you can only buy, hold, and sell the 4 cryptocurrencies available through Paxos: Bitcoin, Litecoin, Bitcoin Cash, and Ether.
But more broadly, people around the world use crypto in all sorts of ways. They buy, hold, sell, transfer, and exchange it.
More specific uses of crypto include:
- Keeping it as an investment
- Sending it to friends or family
- Paying for goods or services
- Donating to charity
Deciding if crypto is right for you
Trading crypto can be risky so it’s important to decide for yourself if you’re comfortable buying it.
If you do decide it’s the right move for you, think about how much you want to invest in it. Make sure it’s not money from your emergency savings or that you may need to pay your bills.
Essentially, if you can’t afford to lose it, don’t use it.