With so many people buying into cryptocurrency, you might find yourself asking if you should own some, too. But what exactly is it?
News 3 spoke to financial expert Carl Carlson with Carlson Financial, who explained what cryptocurrency is compared to regular dollars and cents.
“With normal money like your bank account, you can get it physically in dollar bills or a check,” Carlson explained. “With cryptocurrency, there’s no physical side to it, it is all digital.”
Carlson said that cryptocurrency, like online banking, involves digital money. Most of it uses a particular type of technology called blockchain technology, which was designed and built to keep digital currency secure against hacking attempts.
The way the blockchain is set up is through servers all over the world, with different information tracking differently. When all of those blocks of data are linked together, that’s what becomes the blockchain.
Carlson said Bitcoin is the biggest cryptocurrency at the moment, taking on about half of all cryptocurrencies out there. According to Carlson, there are currently 18,000 cryptocurrencies throughout the world, with more developing, growing and launching every day.
Cryptocurrency might be safe from the standpoint of getting hacked into, for the most part. However, he warned that there are no guarantees behind cryptocurrency — and the crypto market can be very volatile.
For instance, you could buy a Bitcoin for $30,000. It could later be worth $60,000, but could drop to $15,000 just as quickly.
Carlson explained that Bitcoin’s price seems to be settled around $45,000 currently, but has been all over the board in the past four or five years.
He added that you shouldn’t fill your whole portfolio with crypto, though — maybe start with 1 or 2 percent of your total.