KANSAS CITY, MO — Cryptocurrency is omnipresent in the news and growing in popularity around the world. Facebook is even jumping into the cryptocurrency market.
Bitcoin was the first cryptocurrency to receive widespread attention. Now, with Facebook's Libra, it's becoming more likely cryptocurrency will become mainstream.
But what exactly is cryptocurrency? Is it reliable and safe to use?
We talked with a local expert known as the Bitcoin Beamer, who broke down a concept that can sometimes be hard to fully grasp. Here's our Q&A with one of Kansas City's most knowledgeable people about cryptocurrency:
Question: Cryptocurrency — what is it and what's it used for?
Bitcoin Beamer: "Cryptocurrency is basically a digital form of money. It uses cryptography to encrypt all the transactions from point A to point B. ... There's a lot of utilities. The biggest one is paying for goods and services."
Q: How exactly do you use it?
BB: "Similar to sending an email. ... Every wallet address for cryptocurrency is like a bunch of alpha-numeric digits, so you copy and paste their wallet address, you type in how much you want to send them, you put in your password, and you click send. (That) sends them that amount in that cryptocurrency, which, depending on what cryptocurrency it is, would dictate how much in, say, U.S. dollars it's worth."
Q: What do you mean by "depending on what cryptocurrency?"
BB: "There's at least 7,000 different cryptocurrencies. ... Bitcoin, is a (type of) cryptocurrency. ... There are quite a bit of businesses here in Kansas City that accept bitcoin."
Q: So cryptocurrency is growing?
BB: "By the day. ... It's all over the world right now. Every day, it's catching more momentum everyday ... and it's just the predictions they're going to be a multi-trillion dollar economy soon. ... I think people are going to use both forms (of money) until maybe past our lifetime.
"Maybe a hundred years from now, that might change. ... It was over 150 years ago that man would travel with horses and a wagon. Do we use that anymore? So, I still think we're horses and wagons when it comes to converting and going to cryptocurrency."
Q: How will cryptocurrency affect business owners?
BB: "The crypto-guys, they're kind of their own market. ... A lot of these guys are just squatting on their money ... So, by say a Jeep dealership accepting bitcoin, they can actually get more business money from the cryptocurrency community, which now is in the hundreds of billions of dollars."
Q: What about cryptocurrency's stability?
BB: "There's a lot of fears. I'd say the number one is the stability of the network. The most common thing people say is, 'What if all the power shuts off in the world?' or 'What if someone hacks it?' ... Is it possible to hack the bitcoin network? It's about as possible to pick a perfect NCAA bracket. ... It's virtually impossible, because the amount of computing power ... is so large right now.
"Can the power go out? Sure. Let's say you shut down the whole grid of the United States, the beauty about Bitcoin is that it's worldwide. ... The other 200-plus countries in the world, they're going to continue to run it and they're going to support it. So, the Bitcoin network won't shut off. It might run slower until the United States gets the power grid back up."
Q: What about Facebook's new cryptocurrency "Libra?"
BB: "The reason that that's got a chance to become something big is because Facebook's got like 2 billion users, so the second that they start marketing it and make it simple, simplifying the way in getting Libra. ... Libra is going to do something that Bitcoin doesn't. Libra is backing their currency with real assets. ... It's almost like when we used to have to the gold reserve and we used to back the dollar with gold."
Q: What would you suggest to someone who wants to get started in it then?
BB: "It's not mainstream enough to where you would just be able to do it. You would have to be taught ... how to download a wallet, set up your first wallet and where to buy some. You know, Bitcoin just doesn't appear. You either have to buy it from someone who has it or an exchange. Go to Coinbase.com. ... The easiest way I can compare it is it's the version of TD Ameritrade or Scottrade.
"Everybody's familiar with how to trade their stocks. They go to a stockbroker account they register with TD Ameritrade, they link their bank account, they put their social, they do all that stuff ... and then they can now buy stocks. They fund their money, they buy and trade stocks. Cryptocurrency's basically the same as that, that's all that you're doing. "