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Now that crypto bros are on the good side of our next government, it looks like cryptocurrency might finally get its day in the sun. You should sound like you know what you’re talking about.
I believe we hate and fear what we don’t understand, so I’m here to Hisplain crypto to you.
Like any other digital human endeavor, cryptocurrency is as bad or as good as we make it. Think of the internet. A marvel of human ingenuity, it’s the greatest resource for cultural content and information, or the Ninth Circle of Hell.
Blockchain, the tech behind cryptocurrency, can be a neutral tool that empowers people toward financial independence, or, if you are a bad actor, to launder money, skirt taxes, and scam people. On the bright side, this is no longer the province of corrupt politicians; you can do it too! (Just kidding.)
WARNING: Before you mortgage your house to buy bitcoin, please remember this column was conceived to be handled with a serious dose of humor. This is not financial advice!
Cryptocurrency has gotten a bad rap as a Ponzi scheme and an environmental hazard. These accusations are only partially true. The media tends to focus only on the negatives because this gets more eyeballs than inspiring stories about crypto helping the unbanked.
Blockchain allows for the creation of digital assets, such as cryptocurrency, collectibles, or art. I could explain in detail how it works but it’s like going on a plane and expecting to know how the flight instruments work. We just pray to the Virgencita that the pilot gets us there in one piece.
In a nutshell: Blockchain is a digital ledger distributed among many computers. Once a transaction is entered in the ledger, all the computers verify the information is correct. This data can’t be erased or changed. Every transaction is recorded publicly and is visible to everyone. However, transactions are anonymous, so privacy is protected. Got it?
Cryptocurrency is digital money operated through blockchain. This involves no centralized banks, so you’re in total control of your money. You store cryptocurrency in a digital wallet, an extension that you download to your personal computer or an app (I don’t trust my phone with this and neither should you).
Only you can access this wallet with a password called a “private key,” a series of twelve words in a particular order. Your wallet also has a public key, a string of letters and numbers that you can share to be able to send and receive crypto. If you lose your private key, you cannot recover it. You are the sole custodian of your assets.
Using crypto requires a change of mindset. You rely on your own precautions, not on the bank coming to your aid every time you forget that your password is your pet’s name spelled backwards.
Cryptocurrency is fast and direct: You can send money to someone anywhere in the world in minutes without waiting for a bank’s approval. Not dealing with banks, we can all agree, is a marvelous thing.
Imagine you want to send $10 worth of cryptocurrency to a friend. You open your digital wallet and type their public wallet address and the amount you’re sending. Computers around the world check to make sure you have enough money, including a “gas fee” for the transaction. If everything checks, your friend gets the money in minutes.
You can use crypto to buy things IRL (in real life) rarely, to invest in currencies, collect NFTs, and to send money quickly and affordably to anyone who has a crypto wallet. Particularly in developing countries, crypto has become a better alternative to money orders and bank transfers. Just ask President Bukele of El Salvador.
The two major cryptocurrencies are Bitcoin and Ethereum. If you think that you’ll become Rico McPato by speculating on the many coins known as shitcoins, you deserve what’s coming to you. The golden rule of crypto investing is DYOR—do your own research. This means never invest based solely on a friend’s advice, a flashy ad, your Tía Conchita’s TikTok, or this article. You have to research the cryptocurrency, its team, and fundamentals. Never click on suspicious links. Exercise your natural Latino distrust for everything, and you’ll be fine.
You are now ready to dip your toes into the exciting world of crypto. Since most members of Congress can barely understand how the internet works, let alone blockchain, regulation has been slow to come by. Uncle Sam, however, was quick to establish that you have to report your crypto earnings to the IRS.
Now that you are acquainted with crypto, you can HODL (hold crypto as an investment), become a degen (an inveterate speculator), or simply throw some of this bizarre jargon around. You are now virtually an expert.
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Yehudit Mam is one of our newest Hisplainers, stepping into the shoes of Laura Martínez, who is currently on hiatus. Stay tuned for the next Hisplaining column, which will tackle other key biz terms and jargon and help leaders everywhere smoothly navigate the multicultural business world. In the meantime, send us tips and ideas for other terms and jargon that you’d like to see us feature. And remember: don’t panic . . . it’s just his-PANIC!
