Would you invest in cryptocurrencies? 6 Minute English

Summary

In this episode of 6 Minute English, Catherine and Sam discuss cryptocurrencies, explaining their digital nature and how they differ from traditional money. They highlight Bitcoin as a well-known example and delve into Facebook's new digital currency, Libra, which is backed by real-world currencies like the dollar, pound, euro, and Swiss franc. The conversation touches on the volatility of crypto markets and the risks involved in investing in cryptocurrencies.

Takeaways

• 🔒 Cryptocurrency is a digital currency secured by cryptography, which involves complex codes for protection.
• 🌐 Unlike traditional money, cryptocurrencies operate independently of banks and governments.
• 💡 The term 'cryptocurrency' derives from 'crypto' for cryptography and 'currency' for the money of a country.
• 🚀 Bitcoin is the most well-known cryptocurrency and was the first of its kind.
• 📅 Bitcoin was created in 2009, not 2010 as Sam guessed in the script.
• 🆕 Facebook announced the launch of their digital currency called 'Libra', which is different from traditional cryptocurrencies.
• 💼 Libra is backed by a basket of real-world currencies, including the dollar, pound, euro, and Swiss franc, for stability.
• 📉 Cryptocurrency markets are described as 'notoriously volatile', meaning they can fluctuate greatly in short periods.
• 💰 The high volatility of cryptocurrencies can lead to high rewards but also significant risks.
• 🏦 Traditional currencies are more stable because they are controlled by governments and banks to prevent drastic changes.
• 🚗 Being 'subject to the whims of' the crypto markets means that the value of cryptocurrencies can be unpredictable and potentially risky.

Q & A

What is the definition of cryptocurrency according to Sam's explanation?

Cryptocurrency is a digital form of money that uses cryptography for security. It is not controlled by banks or governments but by the people who have it and complex computer codes.

What is the origin of the term 'cryptocurrency'?

The term 'cryptocurrency' is derived from 'crypto', which refers to cryptography, and 'currency', which is the money of a particular country.

What is the most well-known cryptocurrency mentioned in the script?

The most well-known cryptocurrency mentioned in the script is Bitcoin.

What is the name of the digital currency announced by Facebook?

Facebook announced their digital currency named 'Libra'.

What is the key difference between Libra and regular cryptocurrencies according to Jemima Kelly?

Libra is not a typical cryptocurrency because it is backed by a basket of real-world currencies, which makes it more stable compared to regular cryptocurrencies that are independent of financial institutions and other currencies.

Which currencies are mentioned as backing up Libra according to Jemima Kelly?

The currencies mentioned as backing up Libra are the US dollar, the British pound, the euro, and the Swiss franc.

What does it mean for a currency to be 'volatile'?

A volatile currency is one that can experience significant changes in value over a short period of time, either increasing or decreasing in value rapidly.

Why are cryptocurrency markets described as 'notoriously volatile'?

Cryptocurrency markets are described as 'notoriously volatile' because they have a history of experiencing large and rapid fluctuations in value, which is considered a negative characteristic due to its unpredictability and potential for loss.

What is the meaning of 'whims' in the context of the script?

In the context of the script, 'whims' refer to unpredictable or irrational decisions or trends in the crypto markets that can affect the value of cryptocurrencies.

When was Bitcoin created, according to the script?

Bitcoin was created in 2009.

What does the term 'cryptography' refer to in the script?

In the script, 'cryptography' refers to the use of special codes to keep computer systems and content safe.

What is the opposite of 'volatile' as used in the context of currency?

The opposite of 'volatile' in the context of currency is 'stable', meaning the currency does not change much in value over a short period of time.