Crypto (or cryptocurrencies) are a way to transfer value online without using a bank or payment processor. Instead, they’re managed by a peer-to-peer network of computers running free, open-source software. This allows people to send and receive money globally, near-instantly and for low fees. The most popular cryptocurrencies are Bitcoin, Ethereum and Bitcoin Cash. But there are many others, too, each with unique features.
Crypto is sometimes associated with white supremacy and other extremist activities, but that’s a dangerous and misleading way to look at it. Many millions of people own crypto, and their demographics are diverse. For example, a 2021 study found that Asian, Black and Hispanic adults are more likely to have used crypto. And the properties of crypto that make it useful to white supremacists, such as its anonymity and censorship-resistance, could also be beneficial to, say, Afghan citizens fleeing Taliban rule.
The other side of the story is that crypto’s boom has created vast new fortunes, often for speculators who bought it hoping to sell it later for more money. Some of these riches have disappeared, but enough has remained to make it worth a closer look at the movement. The crypto world is weird, fascinating and convoluted. It brings together elements of economics, engineering, philosophy, law and art. There are Discord servers for discussing the influence of Austrian economics on Bitcoin development; a Lamborghini-driving cryptocurrency millionaire; and groups that invest in “non-fungible tokens” (NFTs), which can be purchased or won in video games.
It’s also energy-intensive, with a lot of it being required to mine the most popular cryptocurrencies. Mining is a process that writes transactions on the blockchain, the ledger that records all crypto transactions. For this, a powerful computer, or a group of computers, is given rewards, which can be units of the currency or percentages of its total supply. The amount of energy needed to mine crypto has become a big problem, drawing criticism from environmentalists and pushing up prices on the exchanges where it’s traded.
Another concern is that the wild fluctuations in crypto’s value can make it hard to use for everyday transactions. This is because it’s not always clear what something will be worth the next day. And that uncertainty makes it harder to plan for purchases, particularly large ones. The list of goods and services that can be bought with crypto continues to grow by the day, though. Some companies, especially those that work with global teams, pay wages in crypto to help their employees avoid currency conversion and international wire charges. In addition, people who want to stay anonymous can purchase things with crypto that aren’t available at traditional stores. It’s important to note, however, that these uses are not widely used. And a change in the status quo would be met with stiff resistance from those who gain power from the current financial system.
