David Rhoiney, DO, a general surgeon in Portsmouth, Virginia, first learned about cryptocurrency back in 2012, As a med student at the time, Rhoiney didn’t have the spare cash to invest, but he has kept an eye on the space ever since.
In the years since then Bitcoin, the original cryptocurrency, rocketed “to the moon,” as crypto fans like to say, to an asset with a market capitalization of $880 billion in mid-December (down from more than $1 trillion in November).
Rhoiney, who began investing in cryptocurrencies in 2020, cashed out his Bitcoin earnings this year to buy a Tesla. “Bitcoin is clearly not going to zero,” says Rhoiney, “It’s been around for a decade now. Crypto assets have a use case.”
Bitcoin’s spectacular but volatile rise has intrigued many investors. In 2010, bitcoin was valued at about 9 cents. By December 2018, its value had jumped to more than $9000, but plunged to $3400 by the end of that year. As of December 15, bitcoin is trading at $46,500.
Bitcoin was the first and remains the most famous cryptocurrency, but there are now thousands of different types of cryptocoins attracting the interest of physicians like Rhoiney and other investors. Cryptocurrencies are one type of digital asset, a broader category including all items that have value and exist in a digital format. Other digital assets include non-fungible tokens (NFTs) and equity tokens.
Cryptocurrencies are encrypted digital assets that users trade using a decentralized, online ledger known as the blockchain. That ledger exists across many devices, so there is no single person or entity in charge of it.
The encryption, combined with the decentralized ledger, makes transactions nearly impossible to fake or alter since the record of every transaction updates automatically across the entire network.
Some brokerages allow for the purchase of some digital assets, but often investors buy and sell them directly on decentralized exchanges. When you join an exchange, you typically connect it to your bank account, making it easier to exchange fiat currency (government-issued currency that is not backed by a physical commodity, such as gold or silver) for crypto. The price is high right now, and most of the exchanges allow you to purchase fractional bitcoin, so you can purchase any dollar amount value that you want.
Proponents of cryptocurrencies believe that the technology holds the potential to change the way that transactions take place throughout the globe.
However, there are many components of crypto to be aware of: It’s harder and more complicated to buy cryptocurrency than most traditional assets; there are few government or insurance protections; …….