When the QR code suddenly appeared on our flat-screen television, my wife immediately knew what to do.
She reached for her smartphone, focused the floating digital box into the viewfinder and then fired.
She instantly received a link on her phone to an app that offered her $15 worth of free bitcoin, if she created a cryptocurrency account by the following day. She also had the chance to enter a sweepstakes to win $3 million.
She passed on that.
The QR code she had captured on her phone bounced up and down from right to left across our TV screen and changed colors each time the digital icon bumped the right and left side of the screen, mimicking a TV screen with a DVD in prolonged pause. The bouncing code appeared during a minute-long commercial for cryptocurrency exchange platform Coinbase during the first quarter of last Sunday’s Super Bowl. The publicity brought so many viewers — about 20 million at one time — that it crashed the app.
The ad was one of several commercials to run this year during the game that pushed viewers to buy into cryptocurrency, a concept that has both my curiosity and raised suspicions and only leads me to more questions from what answers I can find online.
From what I have learned from a casual web search is that cryptocurrency is the technology that acts as a medium to facilitate these transactions. Digital currency is not tangible, it’s virtual. You can only acquire some if you have a digital wallet, which is necessary for encrypting and verifying any transaction. You make more of it by selling some to someone else for more than you bought it for. You can also lend out or borrow against your crypto cash.
There are more than 5,000 different cryptocurrencies in circulation. Bitcoin is probably the most known cryptocurrency. One Bitcoin is currently valued at more than $43,700.
Cryptocurrency is valued based on its scarcity. At the moment, there is currently 21 million bitcoins, or individual units of digital currency, in circulation around the world. By comparison, there is about $1.2 trillion in traditional US currency in circulation worldwide.
The amount of cryptocurrency in circulation increases, or is “mined,” every 10 minutes, as complicated mathematical equations are solved that verify cryptocurrency transactions. For each successful mining, the miner receives a predetermined amount of cryptocurrency.
Cryptocurrency is still a tough sell, for me, given that there is no cash or physical assets backing it. This digital payment system has gained whatever measure of popularity because it is decentralized. It bypasses the middle man, the banks, that have traditionally verified transactions, and instead relies on a peer-to-peer system technology. This helps keeps the government from interfering or manipulating the process.
Like any commodity or asset, virtual or otherwise, cryptocurrency derives its value from supply and demand. Its value relies on the demand by investors.
Warren Buffett had long been outspoken against cryptocurrency. He initially told CNBC that he didn’t like investing in cryptocurrency because “you don’t have anything that is producing anything. You’re just hoping the next guy pays more.” But the “Oracle of Omaha” seems to have changed his mind last Monday when his firm dumped some of its holdings in Visa and Mastercard and invested $1 billion in Brazilian fintech bank Nubank, which is popular among Bitcoin investors.
As of last fall, more than 10 percent of Americans have invested in cryptocurrency. While some believe it is the money of the future, I still struggle to wrap my head around it. There are no guarantees for return on investment. Although all investments are a risk, cryptocurrency has been a highly volatile. In the decade since its inception, the value has risen by tens of thousands of dollars, but has lost thousands of dollars of its value within days. That seems too much of a gamble.
So the next time I see a QR code floating across the TV screen, I’ll know what to do. I may take aim and fire, but I don’t think I’ll follow through.
Will Buss teaches broadcasting and journalism at Western Illinois University.