Using a cryptocurrency—or simply “crypto”—to make a payment or to pay yourself is really a simple process. All you need to do is download an app of one of the many different cryptocurrencies. Choosing one of these digital currencies is a matter of reading the reviews about them and deciding which one you find appealing and trustworthy. The app itself will guide you as to how you transfer some of your American dollars into its particular brand of digital currency. Just because it is a simple process does not necessarily mean you will fully understand what you have done, even after you start using the currency. Here are some explanations about crypto that may help to make the transition to digital currency easier—since, in reality, experts are predicting we will inevitably all use it.
Keeping a Clear Account of Your Financial Transactions
First, you can be clear about what is not going to change. Keeping a record of all your financial transactions—you used to call it “balancing your checkbook”—is still a necessity, perhaps even more so now that you are essentially entering two distinct financial worlds. Once you get accustomed to the various digital processes, keeping track of things is actually quite simple. A good payment app that is flexible, personalized and possesses a simple check stub maker can do most of the work for you with very little programming on your part. While crypto is a world apart in how it operates, your bookkeeping entries will not change. You simply need to know where to enter the figures.
Understanding What Cryptocurrency Is
The U.S. economy—and actually the world economy—for at least the past 80 years or so has been based upon the American dollar. In the past, the value of the dollar was fixed to the value of gold, a large slab of which was kept in Fort Knox as the real, tangible currency upon which all transactions were based. In truth, however, the dollar has long found its own value. It floats up or down, controlled to a great extent by the U.S. Federal Reserve Bank, making it a “centralized” currency. Cryptocurrencies—and there are many—are simply forms of money that are not tied to any nation, pot of gold or controlling institution. They are “decentralized” forms of exchange—currency—that can be used just like any type of money issued by a government. However, they are purely digital, existing only virtually until you use them to buy something or you exchange them for some type of cash.
Utilizing the Advantages of Crypto
So, since you have already done pretty well with dollars—literally and digitally, why would you start using crypto? Crypto has certain distinct advantages over dollars or other government-issued currencies:
- Ever have to pay fees when exchanging currencies or moving blocks of money? With crypto, typically there are no bank fees.
- Ever feel that your financial transactions might be scrutinized? With crypto, privacy and anonymity are easier to maintain.
- Ever wonder if a hacker might intercept money you are receiving or sending? With crypto, a security process called “blockchain” encrypts and absolutely protects each transaction.
Envisioning the Future of Crypto
Crypto is so new now that you are just trying to figure out how to use it. Down the road a few decades, it will be old hat. For the moment, it is worth listening to what prognosticators envision for crypto in the next 50 years. The first thing to be aware of is that crypto is here to stay, assuming the internet is as well; as long as there is digital, there will be crypto. Some analysts have predicted that the dollar and some form of crypto will become yoked in value, as the dollar was once yoked to gold. Several experts venture that new, emerging forms of crypto will render the current cryptocurrencies obsolete.
Whatever happens, learning to use crypto now for your personal financial needs will certainly serve you well in the future.