Intrigued by cryptocurrency? Here are the basics of its use.
Westport start-up FinTron launched their personal finance app shortly after we took a look at some of the best investment app options in the wake of market chaos Robinhood-GameStop earlier this year. FinTron also offers the ability to buy and sell stocks and, like Betterment and others, includes savings, checks, debit cards, and personal budgeting.
Ask founding CEO Wilder Rumpf if he was considering any piece of cryptocurrency for the app, and his response is quick – too obscure for most people, though he doesn’t rule out FinTron adding options. From “coins,†in his words, as FinTron’s target audience of young people, adults gravitate in time to virtual currencies as they become more mainstream. “Our mission is to create financially savvy investors, not to present them with very risky options,†says Rumpf. “Maybe later, depending on where the coin market is going. But it’s very volatile – right now we are marketing to young and inexperienced investors. “
Yet amid the occasional headline from another company like PayPal, Starbucks, and Home Deport accepting or offering Bitcoin, the biggest player in the crypto world, you’ve probably wondered if and when to add virtual currency to your options. expenses, and how much you might consider an investment option no different from stocks or bonds.
These are some of the questions that preoccupy most people new to cyber currencies.
How do virtual currencies come into circulation?
The world of cyber currency uses the concept of “mining” to describe the way virtual currencies are created, reminiscent of the discovery of gold or diamonds. But a simpler analogy might be the convenience store clerk holding a $ 100 bill to the light for telltale watermarks to make sure no counterfeits are on hand. In the case of bitcoin, miners earn newly minted currency by verifying the “blocks” of bitcoin transactions that exist between buyers and sellers, with an additional hurdle in solving complex government software issues. These audited transactions create a running ‘blockchain’ ledger for public scrutiny – and by extension a basis of trust for a monetary system that does not have a central bank. In essence, it solves the problem of a string of bitcoin being copied and spent over and over again – no different from those fake bills.
Where can I learn the basics of virtual currency?
Peter Sinkevich is a proselytist leading an effort to spread the word in Connecticut, at the very beginning of the constitution of a state chapter of the US nonprofit Blockchain & Cryptocurrency association. In March, the group hosted a ‘cryptocurrency 101’ meetup in Darien and followed it up in April with a mining-focused forum for those willing. Over time, “how-to†sessions should become more frequent at local libraries. The best guide I have found is the free “Blockchain for Dummies†offered by IBM for free download at ibm.com/topics/what-is-blockchain (almost 70,000 people have browsed it; you must provide your email to get it). IBM also provides useful video previews; you can search for other good options on YouTube by searching for the phrase “blockchain basicsâ€.
What are the most common virtual “coins†today?
Bitcoin remains predominant with a market cap today of over $ 1 trillion and between 200,000 and 400,000 transactions per day, according to an ongoing tally maintained by Blockchain.com. After that, it’s a bit of a mishmash with open source cyber currency Ether after Bitcoin with a market cap of around $ 450 billion. Others include Binance Coin, Dogecoin, Ripple, and Tether, either of which could overtake bitcoin which has a programmed cap.
Where can I store my virtual currency?
In your wallet of course – the digital variety, with Coinbase a name, you may be familiar with offering a digital wallet in addition to the virtual currency exchanges it manages. Virtual currencies like Bitcoin list online wallet options, with a number of technical publications rating them for ease of use, security, and other factors, including wallets from HyperPay, Ledger, and Trezor.
Where should I go if I have a problem?
Government watchdogs are still very much on the periphery of virtual currency markets. On becoming US Treasury Secretary under President Biden, Janet Yellen promised a vigilant review of virtual currencies, both from the perspective of criminal money laundering activity but also from the day-to-day protections for legal use. The Consumer Financial Protection Bureau should work on improving collateral, with the CFPB occasionally posting online advice on consumerfinance.gov. The Connecticut Banking Department oversees the industry under applicable money transfer regulations.
How about virtual currency as a long term investment?
Like any asset, “beware of investors†is the term that can be used as virtual currencies continue to experience periodic spikes and “flash crashes†in value. You will need to get an exchange account with entities like Coinbase, TradeStation, and eToro.
Buckle up, advises Rumpf. “I think what’s going on is a lot [proponents] entice people to trade these highly volatile assets, â€says Rumpf. “You fill them with adrenaline and hope – then they are inevitably destroyed by the financial markets.”
This item originally appeared in Connecticut Magazine. You can subscribe here, or find the current number on sale here. Register to receive the newsletter to get the latest and greatest content from Connecticut Magazine straight to your inbox. At Facebook and Instagram @connecticutmagazine and Twitter @connecticutmag.