The cryptocurrency market has weathered some storms over the last five years. One significant incident involved the crypto exchange FTX and its CEO, Sam Bankman-Fried, whose mishandling of investor funds, as documented in the ABC news report had a profound impact on investor sentiment.
As a result, many of us who thought about investing in cryptocurrency turned our backs and walked away, thinking it would only be a matter of time before the rest of the strange digital coin market collapsed.
But it didn’t. Instead, the digital coin market has continued to pique interest and show potential, despite the challenges it has faced.
A little history
Like a fairy tale, it all started many years ago by a mysterious individual, Satoshi Nakamoto, who published a white paper: Bitcoin: A Peer-to-Peer Electronic Cash System. A value was assigned to the result of calculating a unique result to a complex algorithm by those who participated in the exercise. This value would then be called a BitCoin and managed by the responsible individual in a blockchain.
Think of a blockchain as a secure set of containers linked together to form a network. Each container stores something of value that can only be transferred to another container by following a strict, formal process where every step is captured and posted to every other container in the network. Imagine a group of people sharing a common accounting ledger where every financial transaction is recorded securely and visible to everyone in that group. BitCoin leverages a blockchain maintained across computers linked in a peer-to-peer network.
Because of its enforced security and visibility, there was no need for an intermediary to provide oversight; no banks or federal regulators were required. Bitcoin became an international currency supporting global financial transactions.
Resurgence & Regulation
Cryptocurrency is experiencing a type of renaissance. Folks who braved the storm over the last few years are seeing the market improve with rising prices and stability.
Landmark regulation passed earlier this year as outlined in Investopedia’s article: Cryptocurrency Regulations Around the World.
Much like what happened during the DOT COM boom/bust era from 1998 to 2000, the cryptocurrency frenzy burst when Sam Bankman Fried was indicted, but following that, things got fixed. Now more than ever, it is safe to get back in the water and invest some of your portfolio in cryptocurrency.