What even is crypto?
Lesson 1 of 12 in our free Crypto, Hype & Finfluencers guide: a 5-minute money game with the key points below.
Reading is cool. Playing is cooler.
This lesson is a 5-minute game. Free, no sign-up needed.
The story so far
Dex: Crypto is the future of money, bro. Banks are finished. Trust me, I watched a 9-minute video.
Mo: I genuinely don't know what it is and at this point I'm too afraid to ask.
Chip: Cryptoassets are digital tokens recorded on a shared online ledger called a blockchain. Their price is whatever someone will pay for them — nothing backs most of them.
Nana: So it's worth what the next person thinks it's worth. Like my collection of novelty thimbles.
Questions you'll answer
Dex says crypto is 'basically a savings account but better'. What's the best rebuttal?
Savings are stable and protected; crypto prices can crash and it's generally not protected. Exactly. A savings account isn't trying to moon. It's trying to still be there tomorrow.
Quick facts
- Fact: “Most cryptoassets have no company profits or assets behind their price.” — The price mostly depends on what buyers believe it'll be worth.
- Myth: “Crypto is the same as money in a bank account.” — Bank money in the UK is protected up to a limit if a bank fails. Crypto generally isn't.
- Fact: “Crypto transactions are usually irreversible.” — Send it to the wrong place (or a scammer) and it's typically gone.
- 'It can only go up' → Hype. Nothing only goes up. Crypto has had many huge crashes.
- 'Prices can drop by half — or more — in a short time' → Fact. That has happened again and again.
- 'Everyone's getting rich, you're missing out' → Hype. You hear about winners. Losers don't post.
- 'If a crypto firm collapses, you might lose everything' → Fact. There's usually no safety net.