If the concept of cryptocurrency is foreign to you, you’re not alone. Here’s a crash course on what it is and how it works.
“It’s the new way to digitally transfer money to one another over the internet,” said financial expert Andre McHugh.
McHugh says you can buy and sell crypto in multiple ways. Some use digital exchange platforms like “Coinbase”, “eToro,” and “Robinhood.” Create an account, deposit money from your traditional bank account, and soon you’ll be able to buy and sell crypto coins. Those coins are encrypted with their own unique digital address. Think serial numbers.
“That serial number goes wherever across the internet and value is assigned to that. It’s verified by what’s called blockchain technology,” McHugh said.
McHugh describes blockchain as a secure digital ledger of transactions. Those transactions are permanent, cannot be altered, and cannot be reversed. Once blockchain verifies a crypto transaction, it adds the new block to the existing chain. Crypto values can fluctuate wildly.
“One day I can buy a pizza. The next day I can buy a Ferrari with it. There’s a problem with that. We need stability,” McHugh said.