If there ever was an enduring personal financial meme, it would be cryptocurrency. We’re hearing questions from the parents about whether it’s advisable to convert some cash into cryptocurrency now that their children have profited through flipping Ethereum. Now even the IRS is getting in on the deal through its question on your tax return about whether you have held crypto.
You’ve probably heard of the most common crypto options, including Bitcoin and Ethereum. Before you should consider moving funds into crypto, you should understand what it is. Simply put, cryptocurrency is a method of storing value digitally that can be easily transferred to others, even across international borders. Unlike traditional currencies, crypto is generally not available in a physical form and is not issued by a centralized banking authority. Crypto is supported through blockchain technology, which involves using a distributed network and cryptography to track and facilitate crypto storage and transfer.
Former CU Boulder star Spencer Dinwiddie was at the vanguard of the crypto movement with his proposal to “tokenize” his contract with the Brooklyn Nets. In essence, Dinwiddie worked with a provider to make a piece of his $34 million contract with Nets available through a $150,000 crypto token. Dinwiddie would then get some of the proceeds of selling the tokens upfront while purchasers would receive proceeds from his contract. While it didn’t pan out as planned,