A beginner's guide to cryptocurrency like Bitcoin and blockchain, and how you can profit from them
There are definite risks to investing in digital money - but there are some awesome benefits, too
The 411: cryptocurrencies are a kind of digital money. So often, investing and finance is seen as being the realm of experienced Wall Street veterans. But when it comes to this newer form of finance, younger people are leading the charge.
We spoke to 17-year-old former cryptocurrency investor Patrick Cho, and Maxine Ryan, the co-founder of money transfer platform Bitspark, to find out why young people are so hooked on the idea of digital currencies.
Patrick first broke into the cryptocurrency market when he was 12 years old, after using his Lunar New Year lai see to make his first investment. “I bought two bitcoin, which cost me about HK$3,800 [US$490].” The money swiftly doubled, then tripled. Five years later, Patrick had made more than US$500,000.
His decision to invest came from a growing distrust of centralised systems like banks. “My dad lost money after someone used his credit card,” he said. “We recovered a bit of the money, but it made me [wonder] how people can trust banks when something like that can happen.”
The cryptocurrency model allows money to flow directly from person to person, eliminating the need for a “middle man” like a bank. While Ryan agreed that this could explain the increase in young investors, she said another factor is the potential for growth in the digital world.
“Over time we’ve seen everyday things go digital,” she said. “Sharing information through letters, newspapers, and books has turned into sharing emails and reading online … so it’s only logical to predict that money will also be digitised. Young people perhaps can see … what cryptocurrency can become and are excited by its potential.”
