Cryptocurrencies let you buy goods and services, or trade them for profit. Here's more about what cryptocurrency is, how to buy it and how to protect yourself.
A cryptocurrency (or “crypto”) is a digital currency that can be used to buy goods and services, but uses an online ledger with strong cryptography to secure online transactions. Much of the interest in these unregulated currencies is to trade for profit, with speculators at times driving prices skyward.
The most popular cryptocurrency, bitcoin, has had volatile price moves this year, reaching nearly $65,000 in April before losing nearly half its value in May. By mid-October, the price had risen rapidly again: it hit an all-time high above $66,000 before falling back slightly. (You can check the current price of bitcoin here.)
Here are seven things to ask about cryptocurrency, and what to watch out for.
Cryptocurrency is a form of payment that can be exchanged online for goods and services. Many companies have issued their own currencies, often called tokens, and these can be traded specifically for the good or service that the company provides. Think of them as you would arcade tokens or casino chips. You’ll need to exchange real currency for the cryptocurrency to access the good or service.
Cryptocurrencies work using a technology called blockchain. Blockchain is a decentralized technology spread across many computers that manages and records transactions. Part of the appeal of this technology is its security.
