Introduction to Cryptocurrency
When mainstream news began using terms like “bitcoin”, “blockchain” and “cryptocurrency” in their financial coverage, you may have found yourself asking what those terms mean. You may also ask why they’re important and if they should play a role in your financial plans.
At Origin Bank, our experts stay abreast of the latest business trends, particularly those in the financial industry and technology sector. Cryptocurrency touches both, and we’re here with information to help you understand the basics.
The official definition of cryptocurrencies is that they are digital assets created using computer networking software that enables secure trading and ownership. They can be used like traditional currency to buy goods and services, or they can be traded for profit, or loss, like a stock. This makes them very attractive to those who seek maximum flexibility with their finances.
Cryptocurrency is exchanged in a digital environment. There’s no physical currency – no bills, coins or plastic cards – and it’s not backed by gold or silver, nor is it regulated by a governing agency. It is maintained via online technology called blockchains which keep tamper-resistant records of transactions and track who owns what.
As a relatively new currency exchange, cryptocurrency has generated a lot of buzz and excitement, especially in the investment world. When recognizable retailers like Microsoft, Overstock, Home Depot and Starbucks began accepting cryptocurrency as a form of payment, it provided a legitimacy that had previously been lacking. However, cryptocurrencies are still vulnerable to dramatic fluctuation making them risky, especially when considered for long-term investments.
There are many complexities to cryptocurrency beyond what is discussed in this blog. And, as with anything new, experts recommend approaching with caution, keeping in mind the saying “if it’s too good to be true, it probably is”. That doesn’t mean that cryptocurrency is bad or doomed to fail, simply that it’s wise to give it time to find its place in the financial world before diving in too deep.
To learn more about the latest trends in financial technologies, Origin Bank’s trusted advisors are available to help. Contact us today at (888) 292-4037 or visit us online at Origin.bank.