What is Crypto?

Crypto is many things: a new way to invest your money, an immutable digital ledger for storing information, the base layer for technologies like NFTs (non-fungible tokens) and DeFi (decentralized finance). It can also be confusing. Unless you live in Silicon Valley, it’s easy to go days or even weeks without hearing the word “crypto.” And for those who do get the chance to understand it, there’s a whole world that opens up. This is the world of Dogecoin millionaires and Lamborghini-driving Bitcoin bros, of rap artists changing their Twitter avatars to cartoon apes and Elon Musk spending a good chunk of last year tweeting about his cryptocurrency investments.

This is the world of blockchain, a technology that’s become as famous as it is controversial. And it’s a world that’s full of a lot of weirdos. Surveys have suggested that high-earning white men with dog-eared copies of “Atlas Shrugged” are overrepresented among crypto owners, and that right-wing Bitcoin maximalists believe the currency will liberate them from government tyranny. But it’s not a monolith, and many people have wildly different ideas about what crypto is and how much it’s worth.

The most famous cryptocurrency is Bitcoin, which has seen its value surge to record highs. But there are hundreds of others that have been created since. And the vast majority of them use a blockchain to store and verify transactions. This system is designed to be more secure than a traditional record-keeping system because it relies on a network of computers around the world to manage and add new data to the database. The computers involved in this process are rewarded with bitcoin for their efforts, which makes it hard for hackers to alter or erase existing data from the blockchain.

In fact, if you wanted to take down the blockchain, you’d have to break into lots of computers simultaneously. This is why proponents of the system refer to it as “decentralized.”

But blockchain isn’t just a record-keeping technology, it’s an entire new platform for creating new kinds of online economic activity. It’s a platform that can enable a wide variety of things, from peer-to-peer lending to virtual gaming and beyond. It’s a platform that could make it possible for anyone to create, transfer and exchange value on a global scale with near-instantaneous speed and low fees. And that’s why it has so many people excited. But it’s also a platform that has made some of the wealthiest people in the world very, very rich almost overnight. And that’s why so many people are asking whether crypto is a bubble. We’re about to find out.

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