SPARTANBURG, S.C. (WSPA) – Cryptocurrency has been in the news a lot lately. Even if you’re not the investing type, you might be curious about what it is exactly and whether it’s here to stay.

In this 7NEWS Consumer Exclusive, we speak with experts about who should consider getting in at this point in the game, and who should steer clear of this volatile asset.

Steve Saunders, in Salem, SC, has always loved to stay informed about cutting edge opportunities. Shortly after the former Chicago pit trader moved to Oconee County in 2015, he started the Southern Cryptocurrency Club.

“We always tell club members: don’t invest what you can’t afford to lose. Because some of the crypto has been down 95% this year,” said Saunders.

In fact, Saunders admitted this past year his crypto investments were, in his words, annihilated.

“Of the initial money that I put in, it went down 90%, and that was probably the best thing that ever happened to me because when it went down, that’s where the rules came from,” said Saunders.

Before we explain his rules, let’s get back to the basics.

WHAT IS CRYPTOCURRENCY?

In short, cryptocurrency is digital money. But what makes this asset unique? As leading economist Dr. Gerald Dwyar explained, is that it cannot be copied.

“With any type of electronic money, the big issue is how do I keep you from spending it twice? Suppose that you have a file on your disk, and it says this file is worth $1. OK, I say well I know how to do a command called ‘copy’, and I make another one, and I make another one, and so you have to stop people from doing that,” said Dr. Dwyar.

For now, the main solution is mining for tokens using vast networks of computers for each of the 18,000 types of cryptocurrencies.

That mining process prevents counterfeiting through cryptography, the solving of complex math problems. All of that “proof of work” is documented and cannot be manipulated.

“With cryptocurrency, actually the big innovation is what’s called the block chain, which is the record of the transactions. That was the innovation in Bitcoin relative to prior electronic monies,” said Dr. Dwyar.

WHAT CAN YOU BUY WITH CRYPTOCURRENY?

If you own a well-established or “blue chip” currency like Bitcoin and Ethereum, you can purchase pretty much anything you could with cash.

You will need cryptocurrency wallet, an app that allows users to store and retrieve digital assets.

There are ATMs where you can sell and buy Bitcoin in Greenville. Experts agree, cryptocurrency will only get more mainstream.

SHOULD YOU INVEST?

Financial planners like Mark Henry, CEO of Alloy Wealth Management, said no one should speculate with money they need to pay bills. And if you do invest, make sure it is because you are passionate about it, not because someone told you should.

“For most people, the ‘Wild West’ is not a safe place for them. And cryptocurrency currently is the Wild West. You’re going to have to have a really strong constitution to withstand what I’ve seen so far in my short 8 years doing this,” said Henry.

Which takes us back to Saunders and his club’s newly developed rules.

The rules have you sell a certain percentage when the value of a cryptocurrency you own reaches various benchmarks.

Saunders said the most important action before you buy is to do the research and have a plan. Saunders said whether you invest or not, cryptocurrency is here to stay.

“We can’t get rid of it now. The technology is phenomenal. And we don’t even know how it’s going to change our lives, but it will,” he said.

Saunders and economists believe once cryptocurrency is regulated, which is being discussed in Washington, it will infiltrate many industries from the real estate market to our retirement accounts. Even the U.S. government is looking into creating a digital currency.

DON’T FORGET TAXES!

One word of caution, if you do invest, don’t forget to set aside money for Uncle Sam. You will owe taxes on any earnings and will be taxed at your highest tax bracket if you sell before one year.