Recently, the word “virtual currency” has become more frequent. While hearing that there are people who made a lot of money, there seems to be cases such as fraud and theft. So, this article would like to reiterate the simple question of “virtual currency”.
Is “virtual currency” “money” like a dollar?
Wrong, for example, the “money” that you use every day is issued by the Bank of the country, the central bank of the country, and it is stipulated by law that it can be used as currency in the country. In other words, the “money” that you use every day is backed by the trust of the country, so anyone can use it safely. “Cryptocurrency”, on the other hand, has no such legal backing. In addition, in many cases, there is no issuing entity such as a corporate bank or a financial institution as well as a central bank, so their credit is not supported by anyone, and it can be said that it is different from “money”.
Is “virtual currency” actually helpful to all?
There are various types of “virtual currencies”, but do you know that they have different uses? As of the year, the most famous virtual currency is Bitcoin, but it was originally designed as a cheaper and more reliable mechanism for sending money. In addition to remittances, there are certain uses for each virtual currency, such as those issued as “rewards for writing news manuscripts”. Experts guess many holders buy cryptocurrencies on the grounds that “they are going to rise in price” rather than on what their intended use is. If so, it’s a waste of money to use what’s going to rise for your current payment.
Does “virtual currency” make money?
Last year, the price of many “virtual currencies” including Bitcoin rose significantly. Compared to past asset price bubbles, such as the rise in global stock prices in the late 1980s, the rate of increase has been large, and some have reached hundreds of times in one year. In that sense, it would have been a huge profit if you had bought cryptocurrencies before last year. But that doesn’t mean that cryptocurrencies are “always” profitable. In fact, many cryptocurrencies are dropping last year, and on the Internet, you often see stories of people saying, “When prices fell, you were forced to sell and suffer huge losses.” Complete detail is available on official site:
How is the value of “virtual currency” determined?
Things (assets) that have a monetary value usually have a value that depends on the benefits they bring to the holder. For example, in the case of stocks, shareholders can benefit from dividends, the amount of which depends on the company’s future performance and management policies. The future performance and management policy of the company are often unknown to amateurs, so it is necessary to rely on experts’ forecasts, but the forecasting method is generally established, and if it is a large company’s stock, by predicting how much dividends you can receive, you can derive the economic value of your stock. On the other hand, the “virtual currency” has not established a standard for evaluating the economic value, such as a company’s performance forecast in stocks. If it is used for its intended purpose (for example, remittance), you can think of its economic value, but at the moment it is not used for its intended purpose, so even professionals can use What is the theoretical price of a currency? “Therefore, the price of cryptocurrencies seems to be largely supported by people’s expectations that prices will rise in the future.
What should you keep in mind when investing in “virtual currency”?
First of all, as mentioned above, it is necessary to understand the current situation that the standard for evaluating the economic value of “cryptocurrency” has not yet been determined. In the future, the technology that supports the cryptocurrency mechanism will continue to change, and as a result, it is undeniable that a novel mechanism could be created by replacing the current cryptocurrency. Therefore, the price of cryptocurrency is not necessarily going to rise, but it is possible that one day it will suddenly lose value. A virtual currency is not an object (thing) such as gold or cash but an electronic record (data). Therefore, it is necessary to pay careful attention to whether the data is properly managed, and if trading and storage is performed using a virtual currency exchange agent, whether the exchange agent can be trusted. There is. In other words, cryptocurrencies have the potential to decline, and holding them requires some expertise.