America 2.0 Explained: Cryptocurrency
Cryptocurrencies are disrupting traditional finance.
It’s part of a new DeFi revolution that’s unfolding now.
It’s backed by blockchain — a digital database, or blocks, of financial transactions that’s completely secure.
Think of it like this: If blockchain is a digital wallet — then cryptocurrency is the currency that allows peer-to-peer transactions without the need of a third party.
With cryptos, you don’t need to go through a bank to make a transaction, which is huge news for America 2.0 investors looking to leave Old World banking behind.
Cryptocurrencies are fast, easy and secure. And Paul believes this mega trend is the key to America 2.0 investing success!
What Is Cryptocurrency?
By definition, cryptocurrency is a completely digital form of payment that can be exchanged online for goods and services.
Many companies have issued their own cryptocurrencies that can be traded specifically for the good or service that the company provides.
Think of cryptos like arcade tokens or casino chips. You’ll need to exchange real currency for the cryptocurrency to access the good or service.
Right now, there are more than 12,000 different cryptocurrencies traded publicly, according to CoinMarketCap.com.
Cryptocurrencies work using a technology called blockchain. Blockchain stores transaction data in blocks that are then chained together.
As new data comes in, it is entered into a fresh block. Once the block is filled with data, it is chained onto the previous block, creating a chronologically placed blockchain.
Decentralized blockchains are immutable, meaning the data entered is irreversible. For cryptos, this means that transactions are permanently recorded and viewable to anyone.
As we enter the new digital world, Paul believes certain currencies have three distinct features:
No. 1: Store of value.Many view gold as a store of value. Bitcoin also fits this bill as it is “digital gold.” They’re both positioned to retain their purchasing power into the future.
No. 2: Medium of exchange.The U.S. Dollar is a supreme and universally accepted example of a medium of exchange. In the crypto world, a coin like Dogecoin could become the new digital dollar when buying and selling worldwide.
No. 3: Unit of measurement.If something needs to be monetarily measured, the U.S. Dollar is usually the go-to currency. Ethereum’s (ETH) adoption as unit of measurement, especially in the growing non-fungible token (NFT) art market, continues to make gains. If you want to buy an NFT, it’s first measured in ETH.
Some cryptocurrencies are a finite resource, meaning that once every possible coin has been mined, there will be no more of that particular crypto to circulate.
The most popular and well-known cryptocurrency is bitcoin.
Bitcoin was created by the pseudonymous and mysterious figure Satoshi Nakamoto.
The very first bitcoin block was mined in 2009. That number has absolutely skyrocketed to about 18.78 million mined bitcoins as of August 2021.
That means 83% of all the bitcoin that will ever come into existence have already been brought into circulation.
As with all cryptocurrencies, there are no physical coins, only balances kept on a public blockchain ledger that everyone has transparent access to (although each record is encrypted).
All crypto transactions are verified by a massive amount of computing power via a process known as “mining.”
Mining is the process of gaining cryptocurrencies by solving cryptographic equations with the use of high-power computers.
Bottom line: Cryptocurrency is the digital currency that’s essential to America 2.0, as well as the future of global transactions as we know it!
What’s Driving Cryptocurrency?
Cryptocurrencies are driven by many factors across all of the mega trends that make up America 2.0. A few examples include:
- Blockchain: Cryptocurrencies and blockchain are two technologies that work well together, and blockchain makes buying cryptos easier than ever. Blockchain is a decentralized technology — spread across many computers — that manages and records transactions. Part of the appeal of this technology is its security, which is absolutely key when trading, buying and spending cryptocurrency.
- Artificial Intelligence (AI): AI is a branch of computer science that aims to build machines that can “think” in ways that mirror — but go far beyond — the natural intelligence of humans. These “thinking machines” can be used to mine cryptocurrencies. AI is poised to virtually transfer every major industry over the next decade or two and is likely to carry cryptos to their full potential as an alternative to traditional currencies.
- Cloud Computing: Just as blockchain and AI are key components to cryptocurrency mining, neither would be able to function at such a high capacity without cloud computing. By definition, cloud computing is the practice of using a network of remote servers hosted on the Internet to store, manage and process data rather than a local server or a personal computer.
- Millennials: The younger generations are leading the way for the adoption of alternative ways to make transactions like cryptocurrencies. Millennials find the use of cryptocurrencies easier and more transparent than using traditional payment options, such as writing checks or paying with cash. As the largest living generation, millennials directing their money toward crypto innovations means huge profits and massive exposure to cryptos.
All these examples and more are driving cryptocurrencies to become the currency of the future — and the currency of America 2.0!
What Are the Market Projections for Cryptocurrency?
According to Triple A, the estimated global crypto ownership rates are at an average of 3.9%, with over 300 million crypto users worldwide.
This is compounded by the fact that El Salvador recently adopted bitcoin as a national legal tender on September 7, 2021.
This sets a precedent for other countries to adopt bitcoin as a currency in the coming years.
As of September 2021, bitcoin has a market cap of $775 billion.
Also, the total addressable market for bitcoin is $1,247 trillion, combining the markets of gold, real estate, derivatives and other currencies as a store of value. To learn more about how cryptocurrency and blockchain fueling America 2.0 will transform modern life, here.