Recently, starting with Bitcoin which caused a worldwide sensation, many people became interested in cryptocurrency. Cryptocurrency is electric information that is encoded with blockchain technology and distributed so that people can use the coin as a real currency in some networks. Almost everyone would have heard about ‘Bitcoin,’ one of the cryptocurrencies. Especially nowadays, young investors in their 20-30s are increasing. Bitcoin, a word that tempted lots of people to invest. What would it be?

What is Bitcoin?
  In September 2008, the collapse of the global financial industry caused citizens to begin to distrust the state and banks. In the center of this chaos, a pseudonymous person or persons named Satoshi Nakamoto published a paper titled ‘Bitcoin: A Peer-to-Peer Electronic Cash System.’ The paper included a theory about decentralized currency which is not issued and controlled by the government. This is Bitcoin. The paper also contained a concept of Blockchain, which is needed to activate Bitcoin. If Bitcoin is a clock, blockchain is the same concept as the sawtooth that operates this clock. Several versions of decentralized e-money had existed before the launch of Bitcoin. However, Bitcoin is the very first virtual currency that is stated to be commercialized.

Features and Kinds of Cryptocurrency
  The profit of the cryptocurrency, such as Bitcoin, occurred by buying and selling of the coins, which is similar to stock. However, while stock is traded only for a fixed time, people can trade the cryptocurrency 24 hours a day, 365 days a year, anytime they want. The safest method to trade the cryptocurrency is to trade on an exchange market and the operation method is similar to stock exchanges. Cryptocurrency uses blockchain technology to decentralize transaction books, so it is very strong in security unlike previous guarantees from third parties such as countries and banks. Also, since there are lots of kinds of coins, you can invest easily in the currency you would like to.
  According to CoinMarketCap, Bitcoin has overwhelmingly topped the list in market capitalization as it has shaken the world, followed by Ethereum. In addition to these, Binance coin and Dogecoin have consistently been ranking high. Cryptocurrencies, also known as coins, can easily be traded on mobile phones or computers through exchanges. Typical virtual currency exchanges include Upbit, Bithumb, Coinone and Korbit.

The Future of Cryptocurrency
  If the Central Bank starts to issue digital currency, the era has come where virtual currency such as Bitcoin or virtual assets are needed. According to the data of the Bank of Korea, Korea is one of the countries which are preparing to issue the digital currency. In this situation, Bitcoin which is not available for replication or manipulation has got recognition and the value has been elevated.
  CEO James Jung of Delio, who appeared in the TV program “Economic Warlord,” cited three advantages of virtual currency from an investment perspective. The first is that it can generate high returns, the second is that the liquidity and volume of funds are large, and finally, the cyclical ecosystem of transactions, financial services, and investment is well-formed. Even though it is not yet perfect, he judged that Bitcoin is charming enough because it can be used in various circumstances. Park Jeong-ho, a professor of Myongji University, counterargued that the absence of a system was the first factor that hindered Bitcoin investment. Compared to the stock market, Bitcoin has a structure that makes it impossible to exercise institutional power, and it is difficult to say that the system is complete because prestigious opinion leaders are still likely to earn unfair profits.
  Jung Myung, a venture capitalist and adjunct professor of MBA at Hanyang University, divided the outlook for cryptocurrency into positive and negative aspects. He said that cryptocurrencies were not available to be protected or managed because they were investments located outside institutional rights. However, recently, Coinbase, the biggest virtual asset exchange in the U.S., was listed directly on the U.S. stock market NASDAQ for the first time. Also, he looked forward to the future of cryptocurrency because there are many anticipations that Dunamu which is operating domestic virtual asset exchange Upbit will be listed on the NASDAQ. However, the cryptocurrency still has no currency fundamental function and despite its uncertainty, its price fluctuation is very large. Additionally, he mentioned the negative possibility with the fact that over 100 cryptocurrency exchanges were delisted last year. He recommended to young people in their 20s that investment should be carried out after minimal study of investment theory and capital markets before investment and he emphasized that high risk is always followed by high return. Also, he urged the young in their 20s not to get too absorbed in volatile investments and to remember the fact that 20s is the time that one should develop skills and professionalism which would lead to success in the end.

  Even as many people look forward to its future value and are diving into cryptocurrency investments, others need more time to adapt to this new culture. Of course, since the cryptocurrency has not been commercialized for a long period of time, and there are no institutionalized examples of the coins, you should refrain from making reckless investments such as simply buying the coins for the reason that many other people are buying them. To make an ‘investment’ not a ‘speculation,’ study and collect data about the subject you are interested in before making the purchase.

By Park Ji-min l jm41@cbnu.ac.kr