Once dismissed as a fringe interest of tech evangelists, cryptocurrencies—particularly bitcoin—have skyrocketed to mainstream popularity and trillion dollar valuations. In November 2021, the price of bitcoin surged to more than $60,000 for the first time, though it has since fallen. As of mid-2023, an estimated 17 percent of U.S. adults polled by the Pew Research Center had invested in, traded, or used cryptocurrency. Could a regulatory crackdown affect the price of bitcoin? Coursera’s editorial team is comprised of highly experienced professional editors, writers, and fact...
Bitcoins are stored in a “digital wallet,” which exists either in the cloud or on a user’s computer. The wallet is a kind of virtual bank account that allows users to send or receive bitcoins, pay for goods or save their money. Unlike bank accounts, bitcoin wallets are not insured by the FDIC. Opt in to Smart Portfolio The technology is not without risks. Facebook plans to issue its own cryptocurrency called Diem intended to make digital payments easier. Unlike Bitcoin, Diem would be fully backed by reserves of U.S. dollars or other major currencies, ensuring stable value. But, as with its other ostensibly high-minded initiatives, Facebook can hardly be trusted to put the public’s welfare above its own. The prospect of multinational corporations one day issuing their own unbacked cryptocurrencies worldwide is deeply disquieting. Such currencies won’t threaten the U.S. dollar, but could wipe out the currencies of smaller and less developed countries.