what is it
Long story short, without getting into the why of blockchains, it’s a pokemon card. It’s worth something because enough people say it is, and the value fluctuates based on buy/sell price and nothing else, regardless of the real use of the thing (and some, but not all, cryptos do have a real use).
You can play Pokemon with pokemon cards (real use). Or you can trade them for another kid’s lunch or MtG cards (currency use). Or you can hold on to it and hope it goes up in value (speculation).
why all this fuss
cos the value went up spectacularly and all the speculators profited, and then it crashed, except now it’s going up again…
Cryptocurrency is digital, with the supposed paper trail that means no such thing as forgery, not that that helps so much with traceability. It’s largely unregulated, as well as easily scripted and manipulated. Most major exchanges have been hacked at least once, you have no backup if you lose your logins, etc. And there’s definitely evidence of significant market manipulation among other things. So very, very high risk.
Note that blockchains do not have to involve cryptocurrency, and have many legitimate uses. So that’s something else to think about.
points of note
declare like any other income – cap gains, trading profit
high risk high reward, high volatility
you would be betting for/against regulatory updates and blockchains coming into common use…what does the unregulation of the whole thing mean for common use of cryptocurrency and/or blockchains?
price manipulation – what happens when it ends? if it ends? if it never ends at all?
not with any money you can’t afford to lose
The concept is here to stay in one form or another, but individual currencies are still a crap shoot. 2020 appears to be the year of the cryptocurrency index fund, though blockchain-company index funds have existed for a while.
Side note: all that panic with bitcoin going from 20k to 6k, got back over 10k again in a year and a half, as of Dec 2020 it’s at 27k and people are predicting a crash. Do yourself a favour and don’t sell your stocks either.