T H E S TAT E | F I N A N C E
THE WORLD OF CRYPTO
The blooming financial realm of cryptocurrency has space for Oklahoma investors.
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ryptocurrency can be a confusing topic for the uninitiated, but all it takes is a little explanation to begin to understand this digital currency and its ramifications for online buying and investing. Digital or virtual currency has been around since the early 1990s, but has become more common since the rise of the internet, smartphones and app technology, as well as online shopping. Simply put, it is the transferring of money online, and makes it possible to bank and purchase online. Often, it is linked to or represents fiat currency – money that is issued by a government, such as the U.S. dollar or the euro. Cryptocurrency is a type of digital currency, with the “crypto” referring to the special way this kind of currency is kept secure. It is decentralized and not tied to a specific issuing government. “At its simplest, it’s just a digital currency that is outside of central banks, that is proven up through this mining, which is a complex series of mathematical calculations,” explains Brad Scrivner, CEO of Vast Bank, based in Tulsa. Bitcoin, the first cryptocurrency, came onto the scene in 2009, shrouded in a bit of mystery as the person or persons who created it is/are still unknown. But Bitcoin was unique in the digital currency playing field because of its truly peerto-peer nature; it was completely decentralized. “Most cryptocurrencies use a ledger system to record digital transactions in a way that is decentralized, publicly validated and permanently recorded,” writes Jesse Carlucci, Ph.D., in an online article for Arrow Investment Management, where he’s CEO and CIO. “This blockchain technology is already widely used in a variety of ways and has thousands of use-cases across many different industries.” Bitcoin and other forms of cryptocurrency can be used as an investment tool. But there are benefits and pitfalls to be aware of, as with many investment choices. “You have people getting involved in [cryptocurrency] for different reasons. Some people are scared about inflation, and so they’re using cryptocurrency as a store of value, similar to gold,” says Scrivner. He also mentions that some people and companies use it for a faster, cheaper
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Altcoin - Cryptocurrencies other than Bitcoin way to transfer Bitcoin - A type of cryptoassets, as well as currency those who are Blockchain - A type of jumping in for database that organizes speculation, as information into chunks, they see an asset or blocks, chained appreciating together chronologically greatly in price. Carlucci Cryptocurrency - Digital mentions in currency secured by his article that mathematical equations “there are some Digital currency - Curserious securency that exists purely rity concerns in a digital format, around holding but can represent fiat cryptocurrencurrency cies in online Fiat currency - A centralwallets. In 2020 ized currency like the alone, billions of U.S. dollar or the euro dollars were lost to hacking and Mining - The solving of cybersecurity mathematical computafailures.” tions that support Scrivner cryptocurrency continues: “This Public and private keys is a volatile asset. Public keys are the pubThe use-cases lic address that people are still being use to send bitcoin to. developed, it’s Private keys are known still maturing.” only to the account So, it remains to holder to authorize be seen where transmissions. cryptocurrency will go in the Source: Investopedia future. There are some other options for dealing in cryptocurrency on the horizon. Vast Bank has recently made an announcement along these lines. “We are the first national bank to, out of a single bank account, your bank account, be able to purchase and sell and custody cryptocurrency,” says Scrivner. Ultimately, as with most investment decisions, it is important to do your research and speak with a professional to find out if cryptocurrency is the right investment choice. BONNIE RUCKER
OKLAHOMA MAGAZINE | AUGUST 2021
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