Fourteen years ago on Halloween, the idea of bitcoin was hatched and since then, the world of cryptocurrency has taken off, most recently experiencing a meteoric rise and fall in the last year.
To mark the white paper that started it all, Yahoo Finance is kicking off its first episode in a series on crypto that hits the basics of what this newer technology is and how its assets have swept into finance.
Whether you’re a staunch believer like Jack Dorsey and sometimes Elon Musk or longtime skeptic such as Warren Buffett and JPMorgan Chairman and CEO Jamie Dimon who both view crypto as delusional as the 17th century Dutch Tulip craze, it's important to know how it started, what cryptocurrency is, how it diffs from other assets, and of course, the technology behind it all — blockchain.
Short for cryptocurrency, “crypto” refers to a group of digital currencies and surrounding assets that are secured through encryption thanks to a network of computers all running the same software.
Thought another way, a blockchain is a distributed ledger for data and a cryptocurrency acts as its unit of account.
Following several iterations, the idea for “Bitcoin” the blockchain and its unit of account “bitcoin” was shared for the first time on the internet on October 31, 2008, by the anonymous developer(s) called Satoshi Nakamoto.
Nakamoto called the idea “a new electronic cash system that’s peer-to-peer, with no trusted third party.” That meant people could transact bitcoin between each other without a bank. It also meant people could take part in commerce with more anonymity.
The largest and first true cryptocurrency as we know it today, Bitcoin proved to be just the beginning of what’s become a fast-moving, buzzy, and often perplexing area of finance.
As a means of payment, cryptocurrencies haven’t yet picked up mainstream adoption though they have been used to pay for luxury goods such as cars, yachts, watches, and real estate by the crypto rich and people living in regions where the local currency faces hyperinflation and there's low access to dollars.
Several major brands including AMC, Home Depot, Microsoft, Overstock, Virgin Airlines, Whole Foods, and the country of El Salvador all accept bitcoin and other cryptocurrencies for payment.
Visa and Mastercard have also partnered with a number of crypto firms, allowing customers to spend cash or crypto from their brokerage accounts through debit and credit cards that offer loyalty perks such as rewards in crypto.
Beyond payments, many cryptocurrencies aren’t necessarily intended for use as currencies.
The second largest cryptocurrency Ether, for example, acts as the unit of account for Ethereum, also a payments network but better thought of as an ecosystem of applications and programmable contracts in development. Using Ethereum, people can create and transact other digital assets such as non-fungible tokens (NFTs) or trade in decentralized finance (DeFi) — a miniature, and yes, still in development blockchain-enabled financial system that in a handful of ways performs more efficiently than the traditional financial system.
Unlike the U.S. dollar which is backed by the U.S. government (and strong as hell), there are more than 10,000 other cryptocurrencies around the world today and while it can be debated for a handful, most carry little to no intrinsic value beyond what people are willing to pay for them at any given moment.
That said, in the years to come this could change. This is no small part of the reason why people invest in cryptocurrencies and, along with their much smaller size by market capitalization, why cryptocurrencies most often trade like high-growth technology stocks.
According to Coinmarketcap, the total market capitalization for cryptocurrencies and connected assets is around $1 trillion. That’s roughly two-thirds the size of Apple (AAPL) or equal to the market capitalizations of Tesla (TSLA) plus Bank of America (BAC).
At different speeds, governments across the world are grappling with how cryptocurrencies should be regulated. In the U.S., bitcoin is almost unanimously considered a commodity like gold or even soybeans, though for federal tax purposes the Internal Revenue Service (IRS) classifies all cryptocurrency as property.
Along with the volatile returns, crypto can be complicated and that’s also been a boon to fraudsters and digital thieves. Conservative estimates place illicit activity as accounting for less than 1% of all crypto activity, according to Chainalysis. But for an asset class that’s teetered between $3 trillion and $700 billion over the past year, the estimate for total amount of funds lost isn’t paltry.
Hacks, in particular, have climbed to over $2 billion in stolen funds since January.
To conjure Warren Buffett, if you want to invest in cryptocurrencies, learn the language, be skeptical, don’t invest in something you can’t understand, price and value aren’t always the same, and it's worth remembering the future is never clear.
—
Click here for the latest crypto news, updates, values, prices, and more related to Bitcoin, Ethereum, Dogecoin, DeFi and NFTs
Read the latest financial and business news from Yahoo Finance
Download the Yahoo Finance app for Apple or Android
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and YouTube
Democrats are still in contention to hold the Senate, but races have tightened heading into midterms’ final week
The U.S. dollar has been on a tear this year. Foreign currencies have slid against the greenback, causing trouble for countries with debt and trade invoices denominated in dollars.
Christine Quinn, former speaker of the New York City Council and president and CEO of WIN, a non-profit that provides shelter to the homeless, says child homelessness is an overlooked problem.
U.S. central bankers are expected to keep their inflation fight in high gear this week, even as they intensify a debate over when to downshift to smaller interest rate hikes so as to avoid sending the world's biggest economy into a tailspin. With the Fed's preferred measure of inflation running at more than three times its 2% target, the outcome of the central bank's policy meeting on Tuesday and Wednesday is not in doubt: it will raise rates by three quarters of a percentage point for the fourth straight time, bringing the target overnight lending rate to a 3.75%-4.00% range. After the last meeting, in September, Fed Chair Jerome Powell said that "at some point" it will be appropriate to slow the pace of rate hikes and take stock of how the sharpest rise in borrowing costs in 40 years is affecting the economy.
Here are three stories at the intersection of business and politics to watch going into the month of November.
"What we need to do now is to learn everything about Ruth Terry’s life; what she did, where she went … in hopes … (details) lead us to her killer.”
When retirement is coming up close—and you have that exciting date in mind—make sure you have everything organized to make it a seamless, enjoyable transition. Retirement Tip of the Week: Before you pack your bags for a vacation or throw away the alarm clock, make sure you have everything in order for your retirement in the weeks leading up to the big day. The first thing every person should have—months, if not a year, before retirement—is a plan, which incorporates the financial aspects of this next chapter.
Rep. Peter Welch, who is vying to succeed retiring Democratic Sen. Patrick Leahy, said that if elected to Congress' upper chamber, he'll continue to try to find common ground with Republicans despite the current hyperpartisan political climate. Welch is 75 and his choice to run for Senate has been questioned by some in Vermont who think he would better serve the state by staying in the House and keeping the seniority he's built up there.
A cloudy economic outlook isn’t fazing luxury watchmakers laser-focused on the American consumer.
Strong earnings are helping energy stocks extend this year's torrid run, furthering their contrast with the tech-focused megacaps whose disappointing results have battered their shares. A standout all year, the S&P 500 energy sector is up 26% in October alone, against an 8% rise for the overall S&P 500. Oil majors Exxon Mobil and Chevron are up roughly 29% and 27% for the month, respectively, with oilfield services firm Halliburton jumping 47%.
(Bloomberg) — Alphabet’s earnings misses, and disappointing forecasts last week from Amazon and Meta Platforms exposed tech giants’ vulnerability to a slowing economy. Defying the tech rout to trounce its peers, Apple’s better-than-expected earnings gave the shares their best 1-day move in more than two years, even as the iPhone maker plans to trim production in a move that could hurt suppliers like Qualcomm, due to report its own results this week. Meanwhile, Exxon closed at a record high and
Following Elon Musk's Twitter takeover, Dogecoin is on a speculative tear—though any plans for Twitter to use the meme coin have yet to be revealed.
The marketplace’s official release is a result of a partnership that’s been months in the making.
The popular meme coin was up more than 8% at one point as DOGE advocate Elon Musk asserted his control over Twitter. Market Wrap is CoinDesk’s daily newsletter diving into what happened in today's crypto markets.
The meme stocks are back again, but the frenzy could be short-lived. Retail investors are obsessed with meme stocks yet again as trading for shares of Bed Bath & Beyond BBBY, AMC Entertainment AMC and GameStop GME are volatile and are ramping up. All three stocks have risen during the past five days with GameStop leading the rise in valuation.
Shares of Meta Platforms (NASDAQ: META) tumbled again on Monday, falling as much as 6.7%. After years of giving Meta Platforms carte blanche, some investors appear to be losing confidence in the company's direction. Last week, Meta announced its second successive quarter of year-over-year revenue declines — something that had never happened in the company's history prior to last quarter.
(Bloomberg) — Elon Musk consolidated his control of Twitter Inc. on Monday after the entire board was dismissed. Most Read from BloombergMusk Posts Then Deletes Tweet Spreading Conspiracy Theory on Pelosi AttackDemocrats Prepare for Loss of Congress as Voters Break Late to GOPStocks Trim Big October Rally as Bond Yields Climb: Markets WrapLula Edges Out Bolsonaro to Win Presidency of Divided BrazilRaytheon Wires $1 Million to Whistleblower Over Fake GPS Test Results for Air ForceMusk, 51, compl
If you really want to rev up your retirement savings and minimize income taxes, the best thing to be is a late-career professional in private practice. When you’re making a lot of money and are close to retirement age, you have savings options that go way beyond the levels of the typical workplace 401(k) plan. As long as you can handle a little extra paperwork and some fees, you can set up a solo retirement plan and enjoy higher limits than most employees.
Yahoo Finance Live checks out shares of Airbnb ahead of its third-quarter earnings report expected out.
Elon Musk could further expand his hub of operations and attract software developers in a key region by bringing a Twitter presence to the Lone Star state.
Author
Administraroot
Related Posts
