When I hear the word cryptocurrency, I feel intrigued yet anxious. I want to know more, but how you find out more? We all know the internet is full of information, but how do you know what is true and what information you can trust? Over the last few months, I have spent many hours reading about cryptocurrency and trying to wrap my brain around the topic. What I know now is a still have a lot to learn. However, I can now tell you the difference between cryptocurrency and cold hard cash that I have in my wallet today.
Now don’t get me wrong, cryptocurrency is stored in a wallet too. But the main difference between the two is the ability between what you can touch and feel versus a number saved in an app. But, is that different than keeping your money at a financial institution? Yes and no.
The money held at a financial institution we deem to be safe and secure, and is protected by federal insurance. The value of money kept in a financial institution will remain the same other than any the account holder adds or withdrawals. Now you may be lucky enough to earn interest on that money stored; but with current interest rates any extra additions will be small.
Monies kept in cryptocurrency wallets is not protected by federal insurance. The value of the cryptocurrency can also fluctuate based on the supply and demand. Cryptocurrency can be used similarly to traditional money; the main difference is you will need to exchange your cryptocurrency back to dollars or find an entity willing to accept cryptocurrency. I think you can assimilate it to check usage. Checks are used for goods and services today, however, some entities have chosen to no longer accept checks based on the fact that they are not guaranteed. You may find merchants who only want cash or card transactions, and checks and cryptocurrency not accepted.
If all this talk of crypto has your brain in a fog, you’re not alone! Join me on May 6th at 10 AM CT to learn more about cryptocurrency in our Cryptocurrency 101 webinar. Together we’ll start at the beginning with what is crypto and walk you through the life of a cryptocurrency "coin" (there's more than just Bitcoin out there, folks!). Register now!