You Need2KnowCrypto if you want to participate in the biggest new thing out there since the discovery of gold. Public interest and acceptance of cryptocurrency is growing rapidly, as are uses for it beyond just buying and holding. This short article will walk you through the foundations of crypto in byte size chunks, and the links will take you a bit deeper if you want to know more.  You’ll want to know more! You Need2Know more!

Bitcoin was the first cryptocurrency on the scene and was launched in 2009 in response to the global financial crisis of that time. Since then, there are over 11,000 cryptos on the market today. Surprisingly, it wasn’t until Dogecoin emerged in late 2020 that the general public’s interest in crypto started to explode. Dogecoin is not any more technically different than Bitcoin, but its popularity is largely fad driven, demonstrating the power of memes and the social media of our time.

If you are an investor in Dogecoin, you may be so because of the buzz surrounding it over the past year, and because the retail exchange service Robinhood made it commission-free and easy to buy. Of course the price, which is at about 24¢ per share as of this post, is an affordable way to jump into this new adventure. 

Whether you invested in it or not, you are probably here because you have a curiosity about what cryptocurrencies are and how they work, regardless of whether it’s Dogecoin, Bitcoin, or the thousands of similar coins that have emerged since the historical and anonymous release of Satoshi Nakamoto’s Bitcoin whitepaper almost 13 years ago.

So Crypto, what is it, and why is it valuable? 

First, let’s tackle the value part of the question because that’s actually the easiest.

The value of anything, whether it’s Dogecoin, Bitcoin, your jewelry, or the chair you’re sitting on, is a reflection of what someone is willing to pay for it. We know the value of things simply because a market has been established for most of them, where buyers and sellers meet and decide on a price. The market can be an exchange, like Robinhood and Coinbase for crypto, the mall for your jewelry, and Craigslist or Staples for your chair. 

There is no inherent assigned value to anything, whether it’s digital or physical, but there is one common attribute among all of them that projects a perception of value, and that is ownership. Each of these things must be demonstrably owned by someone before a value can be determined. Your chair has value because it’s in your possession. Your jewelry has value for the same reason, and you may have even inscribed your name on it to prove it.  

Remarkably, cryptocurrency takes digital ownership to a new level.

In fact, included in its digital composition is a unique address which is connected to an owner.  The address, as well as the quantity for that matter, are an inherent property of the asset. Crypto is analogous to gold nuggets naturally having a name, address, and the number of ounces it weighs inscribed right on the rock the moment it’s mined from the ground! 

For this reason, cryptocurrency needs no intermediary to tell you who owns it. In other words, no bank or institution needs to vouch for the ownership, unlike stocks, bonds, or cash. The ownership of crypto is inherent to its existence making it an independent entity of its own. This attribute is one of the reasons cryptocurrency assets are referred to as “decentralized”.

Because ownership can be proven, we can take our cryptocurrency to a market and trade it for cash, services, pizza, or different crypto, all dependent on what both buyer and seller perceive its value to be, and without a middleman facilitating the transaction. For this reason, crypto markets today are quite active, demonstrating lots of liquidity. Who you talk to, or what you read, and what things you can buy with your crypto, will all factor into your assessment of value, and what you’re willing to trade for it.

We will continue to expand on how addresses and quantities are enabled on cryptocurrency, and dig deeper into the notion of decentralization. 

You truly Need2Know more, and N2KC will try to help!