For the sake of argument, let's assume you have some money sitting around doing nothing as unexciting as buying groceries or making your mortgage payment. Maybe some money just sitting in a box under your bed. I want to emphasize that I don't have any money under my bed. I had some "just sitting around" money once, but I was 12 years old, and it was $24 I made delivering newspapers. Since that time, all my money has been running around like a crazy person attempting to keep my credit score above 350.
But back to our hypothetical money situation. Suppose you've got this wad of cash, and you want to put it somewhere safe. Maybe somewhere that will pay you a little interest on that money. A bank will pay you a princely sum to store your money. I checked my savings account, and the bank paid me $12 in interest this year, which is princely indeed. If I save my bank interest money for 2 more years, I will have enough to buy an entire 5-pound bag of Kirkland Brand Pecan Pieces at Costco.
Owning a large bag of nuts may not be something you have on your bucket list, so what about people who don't even like pecans? Maybe you want to "roll the dice" with your money, but you are one of the fifty people in America who don't live within ten miles of an Indian casino. You are in luck. Now you can skip the casino and still gamble with a new technology called "blockchain".
If you don't know what a blockchain is, I will try to explain. Suppose I keep a ledger of everything I buy and sell, and of all the money I make. Let's say everyone around the world keeps the same record of what I'm doing with my money. You'd think all eight billion people on Earth would notice what a shambles I've made of my finances and give me the most one-star reviews ever recorded on the internet. But that's not what the blockchain does. It only keeps track of what I'm doing and lets everyone know I owe Visa $400, but I only have $7.25 in my bank account.
Before blockchains, I could just write a check to DoorDash on Friday night and hope the bank didn't find out until Monday. Now, thanks to this amazing new blockchain technology, the DoorDash people would know immediately that they should not send me that Buffalo Wild Wings order, and I will finally have to eat the can of Cream of Broccoli soup I've had in the cupboard since last year.
You may be wondering, "So how do I get my money on the blockchain? Do they have little deposit envelopes like the ones at the bank?" Nothing so crude. What you do is send your money online to someone named Julio in Barbados. Julio then gives you some "digital money" called Bitcoin. Bitcoin is internet money that is stored on the blockchain, stuck there like barnacles on the Santa Monica Pier.
I know what you're thinking. “Who in the hell is this Julio person, and how do I know those are my barnacles…er…bitcoin?" You'll know because you will have a list of 24 magic words that nobody else has. If you put those 24 words into a "hardware wallet”, it will tell you how many bitcoin you have. You can even send your bitcoin around to other people as long as you can type a bitcoin "address" into your computer or phone. The address consists of around 35 letters and numbers. If you paste the wrong address into your computer, your bitcoin can go flying off to God knows where, and you will never see it again. And if somebody discovers your 24 magic words, they can steal all your bitcoin, too.
This system is way more exciting than resetting your Facebook password.
And yet, this all seems to work. People who put their "sitting around" cash into bitcoin a few years ago have made enough money to buy a Lamborghini convertible and fill it with bags of Costco pecans if they want. And bitcoin is still supposed to go much, much higher in value. So if you want to put your money to work, and you're not afraid of fat-fingering the letter "Q" by mistake when you use your bitcoin wallet, thereby sending your money to Albania, you might want to give cryptocurrency a try. I think I might even send my $7.25 to Julio in Barbados and see if I can make a few bucks.
