Cryptocurrency – undeniably, the development speed of Cryptocurrency in the past few years is too strong, it can be said to be as fast as “storm”. The concept of Crypto appeared after Bitcoin (BTC) was born. So what is Cryptocurrency? How does it work? Advantages and disadvantages? Should you invest in Crypto? This article Blog I Love Bitcoin will learn about Cryptocurrency from A – Z with you.
What is Cryptocurrency?
Cryptocurrency or Crypto is the name used to refer to all coins on the cryptocurrency market. There are several different names such as cryptocurrency, electronic money, crypto currency, digital currency, digital currency, Coin or even virtual money, but in my opinion, technically speaking, the most accurate name of Cryptocurrency is “Cryptocurrency“.
Cryptocurrency is designed to act as a medium of exchange, it uses cryptographic algorithms to secure information and verify transactions as well as control the generation of new units of a particular Cryptocurrency. . Thus Crypto units of value are protected from forgery or fraud, while concealing the user’s transaction information.
Quite confusing, isn’t it, but you just need to understand simply Cryptocurrency is similar to ordinary currency USD, EUR, VND, ..but it is encrypted for use completely on the internet environment, not managed by Any organization, any government, all transaction information is anonymous, transaction costs are extremely low, transaction speed is fast and secure, we can call Crypto as “encrypted version of paper money“.
History of Cryptocurrency?
In the 90s, there were many attempts to create a digital currency during the technology boom, such as: Flooz, Beenz nice DigiCash but most fail. There are many reasons for the failure of these systems, such as fraud, financial problems or even internal conflicts within the company itself.
Then, in early 2009, a programmer or group of programmers anonymously under the name Satoshi Nakamoto already Introducing Bitcoin (BTC) – the world’s first Cryptocurrency, Satoshi describes BTC as a peer-to-peer cryptographic cash system, it’s completely decentralized, which means no authority or government controls it. .
To ensure decentralization, in a network like Bitcoin, each person participating in the network will need to do a job, this is done through Blockchain Technology – the public number of all transactions that have ever occurred in the network, visible to everyone, from balances, transfer history, wallet addresses, etc.
Cryptocurrency pros and cons?
1. Advantages of Crypto
- Low transaction costs: Usually when you transfer money through banks, there will be a fee, if you transfer abroad, this fee will be quite high, but with electronic money this fee is almost zero, and currently a lot of Crypto coins are being built. built towards zero-fee transactions.
- Fast transaction speed: For example, if you transfer money between domestic banks, it will have to wait for a few hours or even the next day, if you move abroad it can be a few days, with Crypto even if you move from Vietnam to America , Africa, Europe, it only takes a few 15-20 minutes, sometimes it takes only a few minutes.
- Anonymity: When you use money transfer services of banks, all your personal information is public and mandatory to provide to the bank, but with electronic money all your personal information is anonymous, people only know your wallet address (like a bank account), balance, time, transaction history.
- Not controlled by the government: With paper money, the government can freeze your bank account, or reverse the transaction of the local currency at any time. With Cryptocurrency that is not possible.
- Transactions across gender: As I mentioned above, with Crypto you can transfer money to anyone in the world with fast speed, not as complicated as paper money and very expensive.
- No inflation, fake: Most Cryptocurrencies have a “finite” quantity, for example Bitcoin only has a total amount of 21 million coins, which makes Crypto valuable and never inflated like paper money, because no Who can increase or decrease this number. Moreover, Crypto exists in physical form so it cannot be faked.
2. Disadvantages of Crypto
- Creating conditions for crime: This is a rather big problem that Crypto has encountered, also a problem that causes a lot of controversy in the community, because of its anonymity and unregulated nature, many types of criminals have used Crypto to launder money. through the black market.
- Safety and Confidentiality: If you join the Cryptocurrency market but you do not have the knowledge and skills, the risk of data and money theft is possible, hackers always have tricks to access your cryptocurrency wallet and steal them. But Crypto advocates say that if you know how to secure it well, digital money can replace cash.
- High price volatility: Unlike cash or gold which has a stable value, Crypto has very high price volatility, as you can see in early 2017 Bitcoin price only $ 1,000 but by the end of 2017 it was up to $ 20,000 and now in September 2018 it has dropped to $ 6,000. Moreover, the current Crypto market is very easy to manipulate if someone holds a large enough amount of coins.
What Can You Do With Cryptocurrency?
1. Buy goods with Crypto
Currently in the world in many countries, many famous corporations, companies, and retail systems have accepted payments in cryptocurrencies such as Bitcoin. Overstock and Newegg, to small retail stores, bars, local restaurants. Bitcoin is used to pay for hotel services, buy airline tickets, jewelry, luxury cars, computer components and even vegetables and fruits. In addition, a number of other coins such as Ethereum, Bitcoin Cash, Ripple, .. are also widely accepted.
In Vietnam, the use of Bitcoin or other cryptocurrencies to pay for goods is illegal and subject to fines, Vietnam bans the use of virtual currencies as a means of payment. This is a little bit more about legal issues I will explain more clearly.
2. Use Crypto to Invest
You know, there are many people in the world who have become millionaires and billionaires by investing in Bitcoin and Altcoins. At the beginning of 2017 the price of 1 BTC was only about 1,000 USD, but by the end of 2017 it had reached 20,000 USD, Altcoins also have a growth rate of many times, many coins have increased to several thousand%. The Winklevoss brothers were early Bitcoin investors and they are also dollar billionaires thanks to Bitcoin.
However, “opportunity always comes with risk” and the Cryptocurrency market is even more true to this saying, the price can go up very quickly but can also fall very quickly. If you decide to invest in digital money, it is clear that Bitcoin is an advantage, besides Altcoins like Ethereum, Ripple, .. are also not bad choices.
Currently, there are many exchanges where you can buy and sell coins. In Vietnam you can use Remitano floor to buy and sell Bitcoin, Ethereum, USDT and Bitcoin Cash, and international exchanges, you can use the exchange Binance, Huobi Pro, CoinEx, Bittrex, Bitfinex, Poloniex,.. I will have a basic tutorial on how to invest Crypto for newbies later.
Some popular Cryptocurrencies
Below I will list some Cryptocurrency The most popular and has the largest market capitalization, you can click to see details about that coin.
You can see more”Ranking 100 Coins” and more than 1,500+ other cryptocurrencies of ToiYeuBitcoin statistics.
The legitimacy of Cryptocurrency in Vietnam and the world
Since Bitcoin was born and strongly developed, most countries have started to learn about the concept of Cryptocurrency to see if they are in line with the regulations and legal framework of the country or not. In the world, there are quite a few countries that consider Bitcoin and cryptocurrencies as legal, illegal also, legal but not accepting payments also,..The image below is a description of the legality of Crypto globally, however, this legality is subject to change at any time, including:
- Blue: Legal
- Yellow: Some legal restrictions on the use of Crypto
- Pink: Not banned directly
- Red: Illegal
- Gray: Unknown
For Vietnam, from January 1, 2018, if you use Bitcoin or any other coin to pay for goods, you have violated the law and been fined. As for using Bitcoin to exchange as goods, there is no problem, ie, if you use Bitcoin to buy goods, it is illegal, and using VND to buy Bitcoin is completely legal.
You can see more details about crypto legality in countries around the world here.
Some common terms in the Cryptocurrency market
If you are new Learn about Cryptocurrency It is very common to encounter terms that you have never heard before, below I will list some common words that you will often encounter:
- Mining (coin mining): Term used to refer to cryptocurrency mining, can be BTC, ETH, LTC, .. to mine coins, you must use computer hardware or specialized miners to solve algorithms. The math is complicated and when you solve it, you will receive the main reward of coins.
- Miner (miner): Simply miners
- Wallet (Wallet): Just like the daily paper money you use, you need to have something to store like a wallet, so do coins, a cryptocurrency wallet will help you store coins and each wallet will give you one “wallet address” is a string of characters, it is similar to a bank account to send and receive money.
- Trade Coin: If you’ve ever played stock or Forex, you’ll understand, this is the job…