Trends reflect the norms of a certain time period. The ‘40s is known for recycled and re-used items since it reflected wartime, while the ‘90s brought so much advancements because the lasting effects of decades of international conflict started to wane and settle. This said, it’s not hard to discern that the 2020s are known for the utter chaos of the global pandemic and everything that came with it. 

Tiktok, online work and school, human rights, and politics are just some of the highlights; staying home is the biggest factor that the majority of us remember. With everybody home and social-distancing a must, the things we used to go to therefore had to go to us. The e-commerce industry shifted and thrived, businesses and everything else had to adapt to the change if they wanted to stay afloat. Along with this came the rise of online banking, therefore, the trend toward cryptocurrency.

As a Gen-Z, I should be well informed of what the current trends are; for the most part, I can keep up with them anyway. However, it has been a while since cryptocurrency peaked, and I’m scared to admit that I still don’t know how it works. That ends today.

What is Cryptocurrency?

For starters, cryptocurrency has been around for some time now, and humans always tend to find a way to digitize everything and make things easier for mankind. There are mentions of electronic cash from the ‘80s and ‘90s, but everything took off when software and the internet actually caught on.

The definition of cryptocurrency can be explained easily. According to Merriam Webster, the root word crypt is derived from Greek ‘kruptos’ which means “hidden,” as we know encrypted means having data or information stored in code. Therefore, cryptocurrencies are digital values kept behind and made up of different codes. In 2009, The world’s first cryptocurrency called Bitcoin was made. Bitcoin, as with other cryptocurrencies, is decentralized, which means it is not under the control of governments or any single governing body, and it is anonymous when traded, sent, used, and the like.

Cryptocurrency is not like the numbers you see on your banking apps or your e-wallet, since that is actual currency that circulates in  a country’s system. Cryptocurrency is digitized money that does not have physical versions and furthermore isn’t taxed. How does this work? Crypto is made possible by a technology called blockchain. According to Zubin Pratap from freeCodeCamp, Blockchain is a very mathematically specific piece of software code, which stores data and secures the asset all together. This is where the security comes from, and this is why I said this blew up in the pandemic; since it is also a contactless mode of payment.

If so, how does essentially a bunch of codes have monetary value? Well, when more people believe something to have value, then it does. It is simply supply and demand, and if more stores can recognize it as payment, then it is valid and legit. This, along with the fact that it is not linked to a strong basis of governance as normal currencies are, is what makes it so unstable. Bitcoin might be very well-known and therefore high-valued, but a lot of other cryptocurrencies out there have crashed and burned on such short notice, as they also run investments and investors down to the ground. However, the answer to the simple question, “Can you exchange bitcoin for tangible money?” is still yes, no matter how unstable the market is.

On the other hand, what are NFTs?

Another trend that blew up a while ago are NFTs, which stand for non-fungible tokens, and the majority of us get an image of a cartoon ape once this term is brought up. 

Remember the term blockchain from above? NFTs use blockchain as well, but this time, it’s in a photo. Therefore, how does this photo sell for hundreds if not millions of actual currency? Is it like classic paintings such as the Mona Lisa then? No, it’s not like the Mona Lisa since NFTs cannot be held just like bitcoin, but they also cannot be traded at all. For general cryptocurrency, you can trade bitcoin for dogecoin, as long as it is the same amount. However, you cannot trade a specific NFT to another; it is like a very rare collector’s item, only one of its kind. NFT can be anything, since anything can be given value, and not just digital art, but the latest representation of it is digital art.

Digital art… that you can download, screenshot, or anything on the internet. Sure, you can screenshot the Nyan Cat on your screen, but that doesn’t mean you own it. Simply put, owning the NFT means you have the copyright to it. The aforementioned Cartoon Ape is part of the Ethereum blockchain, and different apes cost different amounts.

It is surely both very simple and complicated at the same time. Maybe there are a lot of holes and negatives on how NFTs work, but on the plus side it does help support digital artists. As with many trends, just understanding it is the key to seeing a benefit from them. I did the best I could to summarize what cryptocurrency is, however. 

On press release  by Capstone-intel it was said that of 1,204 Filipinos nationwide that know about crypto, 57% have dabbled in investing in cryptocurrency, which honestly is more than what I expected. The data and research, which you can find at https://www.capstone-intel.com/cryptocurrency-survey/, prove that this type of business investment is well known and valid already, even if it isn’t a household topic. Again, these things are notoriously hard to understand, since it is reliant on things, specifically technology, that people cannot see— directly violating the saying “to see is to believe.” However, it is just proof that technological advancement will always happen and change how humans operate.