Simply stated, a cryptocurrency is a new form of digital money. You can transfer your traditional, non-cryptocurrency money like the U.S. dollar digitally, but that’s not quite the same as how cryptocurrencies work. When cryptocurrencies become mainstream, you may be able to use them to pay for stuff electronically, just like you do with traditional currencies.
However, what sets cryptocurrencies apart is the technology behind them. You may say, “Who cares about the technology behind my money? I only care about how much of it there is in my wallet!” The issue is that the world’s current money systems have a bunch of problems. Here are some examples:
- Payment systems such as credit cards and wire transfers are outdated.
- In most cases, a bunch of middlemen like banks and brokers take a cut in the process, making transactions expensive and slow.
- Financial inequality is growing around the globe.
- Around 3 billion unbanked or underbanked people can’t access financial services. That’s approximately half the population on the planet!