{"id":490477,"date":"2022-09-05T16:03:00","date_gmt":"2022-09-05T13:03:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/crypto-noobs-what-to-tell-newcomer-friends-about-digital-currency\/"},"modified":"2022-09-05T16:03:00","modified_gmt":"2022-09-05T13:03:00","slug":"crypto-noobs-what-to-tell-newcomer-friends-about-digital-currency","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/crypto-noobs-what-to-tell-newcomer-friends-about-digital-currency\/","title":{"rendered":"# Crypto noobs: What to tell newcomer friends about digital currency"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3c558541925\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3c558541925\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/crypto-noobs-what-to-tell-newcomer-friends-about-digital-currency\/#%E2%80%9D_Crypto_noobs_What_to_tell_newcomer_friends_about_digital_currency_%E2%80%9C\" >&#8221; Crypto noobs: What to tell newcomer friends about digital currency  &#8220;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/crypto-noobs-what-to-tell-newcomer-friends-about-digital-currency\/#What_is_cryptocurrency\" >What is cryptocurrency?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/crypto-noobs-what-to-tell-newcomer-friends-about-digital-currency\/#What_purpose_does_cryptocurrency_serve\" >What purpose does cryptocurrency serve?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/crypto-noobs-what-to-tell-newcomer-friends-about-digital-currency\/#If_crypto_isnt_backed_by_anything_how_is_it_worth_anything\" >If crypto isn\u2019t backed by anything, how is it worth anything?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/crypto-noobs-what-to-tell-newcomer-friends-about-digital-currency\/#Can_cryptocurrency_replace_real_money\" >Can cryptocurrency replace real money?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/buradabiliyorum.com\/en\/crypto-noobs-what-to-tell-newcomer-friends-about-digital-currency\/#Can_cryptocurrency_be_hacked\" >Can cryptocurrency be hacked?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/buradabiliyorum.com\/en\/crypto-noobs-what-to-tell-newcomer-friends-about-digital-currency\/#What_causes_cryptocurrency_prices_to_increase\" >What causes cryptocurrency prices to increase?<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Crypto_noobs_What_to_tell_newcomer_friends_about_digital_currency_%E2%80%9C\"><\/span>&#8221; Crypto noobs: What to tell newcomer friends about digital currency  &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p><img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDkvNGY0MTM1NmMtYWQ0Yi00YWM5LTgwMjMtNGM2ZGEzYTkwYTJhLmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-3511d6da>Interest in crypto has been growing since the 2017 bull market and has increased even further since 2021, which saw the nonfungible token (NFT) boom and Bitcoin (BTC) hitting its highest price so far.\u00a0<\/p>\n<p>So, what can a crypto investor tell family and friends who are interested in cryptocurrency? Here are some common and important questions that one can come across regarding crypto and some <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ropriate responses with opinions from experts in the industry.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_is_cryptocurrency\"><\/span>What is cryptocurrency?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>One of the most common questions a crypto investor might get asked is what cryptocurrency is in the first place. Cryptocurrency is a digital currency that is designed to be used as a medium of exchange. This exchange can come in the form of peer-to-peer (P2P) payments and retail purchases.\u00a0<\/p>\n<p>Lucaz Lee, CEO of Affyn \u2014 a mobile-based metaverse platform \u2014 told Cointelegraph, \u201cA cryptocurrency is a digital or virtual currency designed to work as a medium of exchange. It uses cryptography to secure and verify transactions, making it difficult for anyone to create fake transactions or counterfeit money.\u201d<\/p>\n<p>Lee continued, \u201cAdditionally, cryptocurrencies are decentralized and use distributed ledger <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a>, meaning no central bank or government is controlling them.\u201d<\/p>\n<p>Cryptocurrencies exist on the blockchain, which is a public ledger that records all transactions that take place, making it possible for anyone to see how money moves through the network. While anyone can see how much money a user owns and how it is spent. Users need a wallet to send and receive crypto, and these wallets use alpha-numerical identifiers, which add a layer of anonymity to the users.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_purpose_does_cryptocurrency_serve\"><\/span>What purpose does cryptocurrency serve?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The main purpose behind cryptocurrency is the ability for anyone to send and receive money through a decentralized P2P network. This works as a digital version of cash. For example, when users pay with cash, they pay directly to another person without having to go through an inter<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">media<\/a>ry such as a bank or payment processor.<\/p>\n<p>Cryptocurrency does this on a digital level, allowing anyone to transfer money directly to another person, entity or organization while retaining control of their funds at all times. Lee agreed with this take, stating, \u201ccryptocurrencies can be used as a medium of exchange or payment for specific services without any intermediary or centralized control. It removes the limitations of traditional finance, enabling the globe&#8217;s large numbers of unbanked and underbanked users to access financial services.\u201d<\/p>\n<p>Cryptocurrencies are also being used as investment vehicles, with users being able to make high returns due to their limited supply, high volatility and high level of speculation. <\/p>\n<p>Lee added, \u201cWith each passing day, cryptocurrencies are becoming more attractive investment options. Certain variations also support opportunities to generate passive returns, helping investors expand and diversify portfolios.\u201d<\/p>\n<h2><span class=\"ez-toc-section\" id=\"If_crypto_isnt_backed_by_anything_how_is_it_worth_anything\"><\/span>If crypto isn\u2019t backed by anything, how is it worth anything?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Most cryptocurrencies aren\u2019t backed by any traditional assets apart from stablecoins like USD Coin (USDC) and Tether (USDT), which have a large portion of their tokens backed by reserves of fiat money and bonds. Some people may wonder why cryptocurrency has any value if they aren\u2019t backed by anything.\u00a0<\/p>\n<p>First, a lot of the value comes from the utility of a cryptocurrency. The more a cryptocurrency is needed for a particular task, the more demand there will be for that cryptocurrency. Examples include using crypto as a store of value and uses for particular protocols within sub-industries like decentralized finance (DeFi) and NFTs.<\/p>\n<p><strong><em>Recent:\u00a0Armenia aims to position itself as a Bitcoin mining hub<\/em><\/strong><\/p>\n<p>Igor Mikhalev, partner and head of emerging Tech at EY and decentralized autonomous organization chairman of Blueshift \u2014 a decentralized exchange \u2014 weighs in on this question, telling Cointelegraph, \u201ccryptocurrencies built well are worth increasingly more because they exhibit the foundational functions of traditional currencies: scarcity, medium of exchange\/account and store of value. It is possible due to advances in the underlying tech, legislation and people\u2019s <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a> attitude toward it.\u201d<\/p>\n<p>It\u2019s also worth noting that fiat currencies like the United States dollar, euro and Great British pound aren\u2019t backed by anything (hence the term \u201cfiat\u201d currency). Mikhalev spoke on this, adding, \u201cthe USD is not backed by real assets such as gold and is only backed by people\u2019s trust in the U.S. as the issuer. So, why should we not want to support, own and exchange currencies issued by other mission-driven collectives backed by their value and utilities? This is the foundation of the new decentralized economy.\u201d<\/p>\n<p>Lee gave his opinion on the value of cryptocurrency, adding, \u201ccryptocurrency is not backed by anything, but it is intrinsically worth something because people believe it has value. Market forces of supply and demand determine the price of a cryptocurrency.\u201d<\/p>\n<p>Speculation and investment also play a role in the value of cryptocurrency. If investors believe the value of a coin will increase over time, they\u2019re more likely to buy and hold that coin, expecting to turn a profit in the future. <\/p>\n<p>Lee added, \u201cthe more people want to buy a cryptocurrency, the higher the price will be. The more people want to sell the cryptocurrency, the lower the price. Blockchain technology has proven reliable and secure; accordingly, many people believe in its longevity and therefore invest in cryptocurrencies.\u201d<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Can_cryptocurrency_replace_real_money\"><\/span>Can cryptocurrency replace real money?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>In a broad sense, no, as cryptocurrency isn\u2019t regulated, and there are a lot of services, products and commodities that will always need traditional cash. However, governments are looking into creating their own digital tokens known as central bank digital currencies (CBDCs) and there are growing uses for decentralized cryptocurrencies.<\/p>\n<p>\u201cYou can\u2019t walk into a Starbucks in America and pay with Swiss francs or pounds. Yet, both of these are real money. Context matters.\u201d Rockwell Shah, co-founder at Invisible College \u2014 a Web3 learning community \u2014 told Cointelegraph, adding:<\/p>\n<blockquote><p>\u201cSimilarly, the major cryptos are native currencies of their own digital nations. They have relevancy in their own blockchain borders. If the use cases of crypto are so compelling that people use them instead of traditional currencies even outside of their digital borders, then great. Welcome to the free market.\u201d<\/p><\/blockquote>\n<p>Lee also believes the answer to this question is context-based. \u201cThe answer to this question is not a simple yes or no. It depends on the country and the corresponding economic system. In countries like Venezuela, where the government has mismanaged the economy and sparked high hyperinflation, cryptocurrency has become a way of life for many people.\u201d<\/p>\n<p>\u201cCompared with traditional money, cryptocurrency is very new and its implications on the larger society are yet to be tried and tested. Nevertheless, central banks are exploring the idea of transition to digital currencies, known as central bank digital currencies,\u201d he added.<\/p>\n<p>Some experts believe that the underlying principles behind cryptocurrencies actually put them ahead of traditional currencies when it comes to adoption.<\/p>\n<p><strong><em>Recent:\u00a0Crypto winter teaches tough lessons about custody and taking control<\/em><\/strong><\/p>\n<p>\u201cRemarkably, crypto has already started surpassing national currencies on the foundational functions because of their democratic and transparent nature people intrinsically lean toward. Coupled with the decline in trust in government\/official institutions, this presents fertile grounds for accelerated adoption,\u201d Mikhalev said, continuing:<\/p>\n<blockquote><p>\u201cOne can see this awkward (for traditional money institutions) situation already today: The debate around the introduction of CBDCs (nation-level digital currencies) is stalling. Central, by nature, institutions do not want decentralization, as it will lead to their demise. However, there is no turning back. Once the technology is mature enough (and one can argue that it has already happened), it will only take one major geopolitical event for the explosive adoption to begin.\u201d<\/p><\/blockquote>\n<h2><span class=\"ez-toc-section\" id=\"Can_cryptocurrency_be_hacked\"><\/span>Can cryptocurrency be hacked?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Blockchains themselves are largely impervious to cyberattacks. Lee spoke to this point:<\/p>\n<blockquote><p>\u201cBlockchains, by design, are nearly impossible to hack because they are decentralized and rely on different security mechanisms. However, external variables such as hot wallets, centralized wallets, bridges and even smart contracts can be hacked.\u201d<\/p><\/blockquote>\n<p>Therefore, the best way to secure users can secure their funds is by storing them in a noncustodial wallet, which is a wallet that allows them to own the private keys and wallet seed. This way, an attacker would need to know the private key and wallet seed to access their funds. Regarding platforms, hackers usually resort to phishing attacks to try and trick users into giving away information such as passwords and login info so the hackers can access their funds.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_causes_cryptocurrency_prices_to_increase\"><\/span>What causes cryptocurrency prices to increase?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Speculation and supply and demand are some of the main factors driving cryptocurrency prices. Most cryptocurrencies have a limited supply, and when there is a lot of demand for that coin (due to speculation of utility), the price usually surges in response to this.<\/p>\n<p>Lee also believes supply and demand is the main reason a cryptocurrency\u2019s price increases, stating that \u201cthe price of all assets, including cryptocurrencies, are determined by demand and supply. When the demand for an asset exceeds the supply, it creates a price surge. At times, macroeconomic and geopolitical factors also influence crypto prices.\u201d<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/crypto-noobs-what-to-tell-newcomer-friends-about-digital-currency\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Crypto noobs: What to tell newcomer friends about digital currency &#8220; Interest in crypto has been growing since the 2017 bull market and has increased even further since 2021, which saw the nonfungible token (NFT) boom and Bitcoin (BTC) hitting its highest price so far.\u00a0 So, what can a crypto investor tell family and&#8230;<\/p>\n","protected":false},"author":1,"featured_media":490478,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDkvNGY0MTM1NmMtYWQ0Yi00YWM5LTgwMjMtNGM2ZGEzYTkwYTJhLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74862,74894,74863,107431,74892,74355,73711,4965,71407],"class_list":["post-490477","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bitcoin","tag-blockchain","tag-cryptocurrencies","tag-cryptocurrency-investment","tag-tokens","tag-adoption","tag-investments","tag-technology","tag-trading"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/490477","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=490477"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/490477\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/490478"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=490477"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=490477"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=490477"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}