What is cryptocurrency and how does it work?
Cryptocurrencies work using a technology called blockchain. Blockchain is a piece of technology spread across many computers that manages and records transactions, like a ledger. When a cryptocurrency transaction is made, that transaction is sent out to all users hosting a copy of the blockchain. It allows people to store money without the need to use their name or go through a bank. Cryptocurrency, such as Bitcoin, is a form of payment that can be exchanged online for goods and services. Many companies have issued their own currencies and these can be traded specifically for the goods or services that the company provides. Units of cryptocurrency are created through a process called mining, which involves using computer power to solve complicated maths problems that generate coins. You have to pay for cryptocurrency using real currency to get the goods or services. Cryptocurrencies appeal to companies like Tulleys for a variety of reasons. Cryptocurrencies such as Bitcoin are seen as the currency of the future and are racing to buy them now before they become more valuable. This week the chancellor Rishi Sunak announced the Treasury are looking at introducing a so-called central bank digital currency (CBDC). Supporters also like that cryptocurrency removes central banks from managing the money supply. The blockchain technology behind cryptocurrencies can be more secure than traditional payment systems and some speculators like cryptocurrencies because they are going up in value and have no interest in the currencies’ long-term acceptance as a way to move money. More than 6,700 different cryptocurrencies are traded publicly, according to CoinMarketCap.com.
The total value of all cryptocurrencies on April 13, 2021, was more than $2.2 trillion, with Bitcoin accounting for £1.2 trillion of that. To buy Bitcoin or other cryptocurrencies, you need a ‘wallet’ on an online app and then you transfer real money to buy whiochever cryptocurrency you desire. The issue with crptocurrency is that it is highly speculative and volatile. Stuart Beare, owner of Tulleys Farm, said himself: