Understanding Cryptocurrency: A Coinverse Conversation (Episode 1)

Disclaimer: This article isn’t an encouragement to invest in cryptocurrency. I will therefore not be responsible for any gains or losses you may experience if you choose to invest in cryptocurrency.

“Buy the dip". What is the dip? Who is buying it? Why hasn’t the buying stopped? This article aims to answer your basic cryptocurrency questions, from what it is, its value, and the types of coins, to eventually answering the question: “Should I invest in cryptocurrency?”

What makes this article different? Unlike other educators who write to impress top journals, I'm going to write the reader in mind. Whether you know nothing about finance or are an entertainer curious about cryptocurrency, you’ve found the right material. Consider me your narrator.

Let’s get straight to it. What is bitcoin?. . .Wait! That’s not the best place to start. To help you understand, we need to go back to the very beginning.

So, what purpose do coins serve? Think carefully. What’s your answer? Exchange! Correct, Professor of Finance.

Humans have always desired things they don’t have. The farmer needs shelter, so he goes to the shelter-maker and offers five bags of grain in exchange for a shelter of his choice. The exchange is made, and everyone is happy. This method of obtaining goods or services is known as the Barter System.

As humanity evolved, we explored new ways to facilitate trade and exchange. We began to seek common items that everyone wanted to make exchanges easier—this is where the term "medium of exchange" comes from. These mediums included gold, silver, women, precious metals, cowries, and more. This evolution led to the currencies we use today, like the Dollar, Pound, Euro, etc. These are called fiat money, which is generally accepted and has solved many problems of exchange, thanks to central banking and other financial concepts that might not interest you.

The human desire for goods hasn’t changed. As new products are invented, our desire for them grows, and so does the need for new forms of exchange. This is where cryptocurrency comes in.

This is just an introduction, in the next articles, we’ll explore why there’s such a “craze” for cryptocurrency, along with its advantages and dangers.

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