There seems to be a lot of confusion regarding the legitimacy and efficacy of cryptos like Bitcion, Ethereum and all the countless others on the market. Though the task of telling them apart might seem daunting, rest assured they all share the same common properties that your dollar bills also possess.
Digital coins like the ones mentioned above actually share the four essential elements that legal tender (cash money) must possess. Without these four elements, your dough is no good whether it's cash or a stablecoin or a stash of Ripple. Let your mind rest easy by reviewing the essential elements that any working system of money, including cryptocurrency, must have:
1. The ability of an authority to create currency. The issuance of currency needs to be controlled if the currency is going to have any kind of value.
2. A forgery prevention mechanism. It must be difficult to copy the currency illicitly.
3. The means to verify the ownership and validity of units of currency. Users of the currency must be able to identify valid units of the currency and figure out who owns them. For example, we can determine that a $50 bill is valid by visual inspection and we presume that its owner is the person who is holding the bill.
4. A means to transfer value. A currency is only useful if it can circulate. That's to say, if one owner can pass it along to another.
Knowing all this, keep in mind that young folk have been flocking to apps like Robinhood and Coinbase like there's no tomorrow to invest in the latest trending cryptocurrencies. It's a hot market, everybody's talking about their latest investments and there's no turning back now, especially seeing as how we are standing on the shores of financial freedom.
Cryptocurrency as an overall portfolio rightly appeals to those who are younger. The millenial demographic is looking to diversify. Coinbase exploded because it was a smartphone app that allowed smartphone users who are familiar with their phones to download the app and eventually buy and trade crypto. Familiar territory. It was their introduction to money, investment and assets. As well as possible wealth-building and a store of value. A lot of these apps also give away free stock and cash bonuses to new users, opening up a whole new demographic of stock users.
In some emerging markets and countries where either banking or the government is not stable, Bitcoin has been adopted to a higher degree than the USA because it becomes a store of value and a quicker way to hold and accumulate savings and even wealth. It is not out of the realm of possibility that we will see the digital currency trend evolve here in the US as people start to look at crypto more in a global approach as the trend starts to move towards enjoying greater financial freedom. Tokenization of securities and products is just around the corner. Everything from bonds to health records to real estate transactions will encapsulate a giant digital asset market.
At some point there will be a consolidated market for cryptocurrency and not just for millenials. When you go out to wine and dine, you don't use cash anymore. If you can move money around on your phone in a matter of minutes to pay all your bills, as opposed to ACH which takes several days, the game has already changed and is highly in your favor.
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