#FINANCIAL_LITERACY

Of the global crypto market cap of $2 trillion, Bitcoin's market share is 39.6% as of Jan. 17, down from about 70% from this time last year, according to Coinmarketcap. In other words, altcoins currently make up more than 60% of the crypto market.

Cryptocurrencies are simply digital currencies that only exist online and operate through peer-to-peer technology. Unlike fiat currencies - issued and guaranteed by a country - they have no paper version and no central bank controls their supply.

However, we can use them to send and receive money, and the potential uses in everyday will undoubtedly multiply in the near future, just like the internet and other revolutionary technologies did.

The network that powers them, known as the blockchain, has a big potential, experts say. It could, one day, become as ubiquitous as the internet currently is, with some even referring to it as "Web 3."

Cryptocurrency is the most basic implementation of blockchain.

So What Can I Do With Crypto These Days ?

Unlike bitcoin, which functions mainly as a payment network and cryptocurrency, blockchain networks such as ethereum, cardano, avalanche, polkadot ,and solana let users build apps that can store personal data, allow peer-to-peer financial platforms.

Users also have access to platforms that set rules for complex financial transactions, like the smart contracts that governs NFT ownership and sales, play-to-earn games, distributed storage, and to decentralized finance (DeFi) apps,

The last one, DeFi, has a great appeal : access to a borderless, open alternative to every financial service imaginable — savings accounts, insurance, loans, trading, and more.

In December 2019, the DeFi ecosystem had $700 million worth of digital assets locked in its financial products. Recently, this number has skyrocketed to $96 billion.

These applications, which cut out the middleman, are fundamental for developing new ways for consumers and businesses to digitally interact and manage operations.

"The cost with which individuals send money using money transfer services, are pretty high. The alternatives that exist today look to be something that are going to be potentially very disruptive to that space in that (cryptocurrencies) can do it faster, cheaper and with a similar level, if not greater level of security associated with it," says Dan Perlin, managing director of Payments, Processors and IT Services at RBC Capital Markets in Baltimore.

Unbanked people can transfer money to others, even internationally, using their crypto wallets, or make purchases using crypto with participating merchants using apps like BitPay, all without the need to go through traditional financial institutions.

Cryptocurrencies "have low barriers to entry. This opens extraordinary opportunities to help underserved communities in regions around the world", remarks California based-Venture Capital firm Andreessen Horowitz, which has pumped billions of dollars into crypto.

"Payment blockchains could open up access to financial services for over two billion unbanked people worldwide. Mobile wallets make it cheaper and easier for migrant workers to send money home to their families in another country."

Now Should I Bet in Crypto?

Many experts say crypto is here to stay, therefore whether or not to invest in crypto is a personal decision. They advise not to make this decision simply because the sector is currently hot. They thus recommend to overcome the fear of missing out (FOMO) and to be well informed about the sector before embarking on it.

You may want to start educating yourself on the types of altcoins and their uses. Crypto is, claim evangelists, going to continue to shape how we send, receive and utilize money.

Cryptocurrencies with strong use cases could mean they have strong fundamentals, and that they may be able to survive the competition, some experts say. Not so long ago, there were no apps like Venmo and CashApp to send digital payments using our smartphones.

Know the Risks of Crypto Before You Buy

Although cryptocurrencies offer undeniable possibilities, they are also subject to many risks that you must take into account, both for investments and for operations.

There is no state protection, and while the blockchain itself has not been hacked, there have been robberies on exchanges platforms

In 2021, there were more than 20 hacks where a digital robber stole at least $10 million in digital currencies from a crypto exchange or project, according to NBC.

The digital wallets that customers use to store cryptocurrencies could also be vulnerable. One of the weak points in security is the set of codes or keys used to access the wallet, says RBC Capital Markets. If the codes are stolen - following the hacking of a smartphone on which they are stored, for example - a digital wallet could be emptied.

Trading crypto remains illegal in many countries, and some governments, including the Biden administration, have made clear their determination to regulate the sector, which could impact the prices of some tokens.