Unless you’ve been hiding under a rock, you’ve probably noticed the spike in interest in cryptocurrencies. If you need a quick refresher, a cryptocurrency is a kind of decentralized digital or virtual money. It is highly encrypted, so it can’t be tracked or traced or stored in your favorite banking institution. You can’t put it in your pocket like a dollar bill, and most coffee shops won’t accept it as payment, but it still has value. Sometimes, a lot of value. For instance, one of the most popular cryptocurrencies is bitcoin, and one bitcoin is currently worth about $8,500.
The cryptocurrency market is huge. According to Forbes, it is worth about $400 billion right now. But it’s also incredibly volatile. Bitcoin, for example, recently lost an excruciating 70 percent of its value. It plummeted from a high of $20,000 to below $6,000, and then slowly inched back up to its current position. Since the start of 2018, the entire cryptocurrency market has lost more than $200 billion.
Despite its volatility, cryptocurrency doesn’t seem to be going away, and it could be the root of a new financial system that lives entirely in the virtual world.
But the proliferation of cryptocurrencies has another, lesser-known side effect. If you’re a PC gamer who is devoted to playing video games on your computer, the crypto market is affecting you indirectly by creating a run on computer parts, and sending the prices of those parts soaring. To understand why, we have to dig deeper into how cryptocurrencies are made. The simple explanation: They’re mined online with computers. The slightly more detailed explanation: People use their computers to solve mathematical problems with software, or “mine” for cryptocurrency, and they get bitcoins or other virtual currencies in exchange for their work. This is where …read more
Source:: The Week – Business