It’s time that ‘financial literacy’ includes crypto basics!

If you know the difference between a ‘Growth’ vs a ‘Conservative’ fund; or between investing in a fund vs individual shares, you probably pride yourself on being financially savvy. Well done! 

My next question is - do you know the difference between storing your cryptocurrency (crypto) with an exchange vs an online wallet (self-custody); or between your public and private keys? If you don’t, you’re not alone. A recent survey revealed that although 1 in 3 Americans own crypto; just 9% are able to pass a basic crypto literacy test (more here) - results that I believe are largely indicative of where consumers are at globally. 

With the adoption of crypto growing by the day, it’s essential for everyone to know how to navigate the world of digital currencies with confidence and make informed decisions about investments.

Here’s why it matters and how you can take responsibility for being crypto literate…

Ignore it; and it WON’T go away…

Crypto is no longer the remit of developers sitting in basements mining coins; but rather, the use of crypto is becoming increasingly mainstream and is poised to play a significant role in the future of finance. 

Big brands backing the use of crypto include the likes of PayPal who announced in 2020 that it would allow its 300 million active users to buy, hold and sell cryptocurrencies on its platform. Visa also allows its partners to settle transactions using cryptocurrencies on its platform; while Wall Street has also embraced cryptocurrencies, with major banks and financial institutions including JP Morgan and Goldman Sachs offering crypto-related services to customers. 

As more people adopt crypto and as the technology continues to mature, it will become an increasingly important part of the global economy making crypto literacy an essential skill for anyone interested in finance and technology.

You can take responsibility by… 

Understanding the technology behind crypto: Blockchain technology is what powers these digital assets. The blockchain is a digital ledger that records transactions publicly. The lack of central authority means the blockchain is not backed by any government or financial institution. Being crypto literate means understanding the risks and opportunities associated with crypto investments.

Staying across the latest ways in which crypto is reshaping the finance industry: There are a lot of exciting real-world uses for crypto beyond investment. (More here). Staying across these will equip you with important knowledge and ensure you don’t get ‘left behind’ when it comes to financial innovation. 

Freedom; and responsibility - two important sides of the same coin…

We've all seen the headlines about people losing their life savings to crypto scammers. While the scammers should certainly be held accountable for their actions, the onus is on us to protect ourselves. We can play the blame game; or we can arm ourselves with knowledge to prevent this happening in the first place. Crypto offers a level of financial freedom and privacy that traditional banking systems cannot provide; but with this freedom comes even greater responsibility to manage your investments securely in order to avoid scams and hacks. 

You can take responsibility by… 

Choosing your provider carefully: In the same way as you would research a bank before opening an account with them, it’s important to thoroughly vet any provider before you trust them with your digital assets. Glib ads or too-good-to-be-true promises can cloud your judgement. Taking the time to find a reputable provider with robust security measures is key. (More here.)

Securing your assets: You wouldn't leave your front door unlocked and expect no one to break in, would you? Securing your crypto investments is key to protecting yourself against an increased risk of hacks and security breaches. Understanding the basics such as a secure wallet, enabling two-factor authentication and creating strong passwords is key. (More here). 

In today’s world of finance, crypto literacy is more important than ever. By understanding the technology behind crypto and its potential, and securing your investments, you can learn to navigate this exciting new world with confidence. Don't be left behind - become crypto literate today by embracing the future of finance and all that this brave new world offers… 

Disclaimer: Crypto is volatile, carries risk and the value can go up and down. Past performance is not an indicator of future returns. Please do your own research.