Crypto noobs: what to tell your newcomer friends about digital currency

An overview of some of the questions friends, family and acquaintances may have about crypto and some suitable answers.

Analysis

Interest in crypto has been on the rise since the bull market of 2017 and has risen further since 2021, which saw the boom in non-fungible tokens (NFTs) and Bitcoin (BTC) reach its highest price yet. day.

So what can a crypto investor say to family and friends who are interested in cryptocurrency? Here are some common and important questions one may encounter regarding crypto and some suitable answers with opinions from industry experts.

What is Cryptocurrency?

One of the most common questions a cryptocurrency investor may have is what is cryptocurrency in the first place. Cryptocurrency is a digital currency designed to be used as a medium of exchange. This exchange can take the form of peer-to-peer (P2P) payments and retail purchases.

Lucaz Lee, CEO of Affyn - a mobile metaverse platform - told Cointelegraph: "A cryptocurrency is a digital or virtual currency designed to function as a medium of exchange. It uses cryptography to secure and verify transactions, making it difficult for anyone to create fake transactions or fake money."

Lee continued, "Furthermore, cryptocurrencies are decentralized and use distributed ledger technology, meaning no central bank or government controls them."

Cryptocurrencies exist on the blockchain, which is a public ledger that records all transactions that take place, allowing anyone to see how money moves through the network. So that anyone can see how much money a user has and how it's being spent. Users need a wallet to send and receive crypto, and these wallets use alphanumeric IDs, which add a layer of anonymity to users.

What is cryptocurrency used for?

The main purpose of cryptocurrency is the ability for anyone to send and receive money through a decentralized P2P network. It works like a digital version of money. For example, when users pay in cash, they are paying directly to another person without having to go through an intermediary such as a bank or payment processor.