What is Cryptocurrency?

Based on the online world, cryptocurrency is gradually establishing into the real world. In recent years, Bitcoin, Ethereum, and Ripple have become world-renowned cryptocurrencies. Investors also see this as an emerging asset class with a daily transaction volume of $1 billion USD or more, and the total market value of $280 billion USD. Cryptocurrency was originally created to allow people to use it on specific platforms, including payment, transactions, transfers, etc., to break through the limitations of traditional currency in the past, such as exchange rates, bank fees, cross-border transactions, etc.

Cryptocurrency has been led by Bitcoin for the past few years. It has gradually become more recognizable to the public. However, the general public rarely uses or even invests in it, making it a mystery. Luckily,  cryptocurrency has long penetrated into everyday life, such as credit card points, flight miles, currency in online gaming, etc. However, this kind of cryptocurrency can be used as a transaction mainly on a specific platform or occasion, and most of the users cannot trade with each other and are restricted in function.

When Bitcoin was born, it was created by “Nakamoto Satoshi” in 2008. After its launch in 2009, it became the current mainstream virtual currency and introduced the concept of a centralized currency and blockchain. In short, the currency circulating in the real world is issued or authorized by the government and the national bank, which is managed and controlled by a central organization. Cryptocurrency is based on “decentralization,” meaning not by the government or financial institutions, which allows users to trade with each other anytime, without the need for banks, remittance companies, etc. as intermediaries, thus not having to deal with complicated transactions and fees.

The transaction information of the cryptocurrency is stored on the Internet, and the transaction record is public and can be traced, but the user does not need to provide any personal information. However, in the case of increased user privacy, there is also a gray area. For example, criminals have used cryptocurrency for money laundering or making illegal transactions. At the same time, after cryptocurrency boomed, and the price rose, cryptocurrency exchanges and users face the risk of hacking. Many well-known cryptocurrency exchanges have been hacked and robbed of a large sum of cryptocurrency assets. In addition, governments have different attitudes toward cryptocurrencies. There are open discussions and strict supervision, which also affects currency prices. In the meantime, large fluctuations are also the normal state of cryptocurrencies. Thus, investors need to be cautious.