A New Face In The Digital Age
A New Face In The Digital Age
  • 편해란 기자
  • 승인 2017.03.08 09:00
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What if you traded in invisible money? In the olden times this seemed like a futuristic science fiction kind of idea, but now it is a reality. This is a story of virtual currency. The virtual currency boom is being seen by people of all ages and it has spread rapidly among young people in particular. What is this virtual currency that has captivated so many people?

It is a kind of electronic money that is traded only on the internet which cannot be seen or felt, unlike the money we use today. The number of virtual currencies developed up to last year is estimated to be about 1,000 currencies. Some of the more popular virtual currencies that people are familiar with are Ethereum and Litecoin, and the best-known is Bitcoin. Ordinary users of virtual currency mainly obtained virtual currency by purchasing it at a virtual currency exchange. Bitcoin interprets encryption codes present in specific networks and then issues a blockchain. A blockchain is a technique that discloses ledgers to all users. So users can renew their ledger every 10 minutes and check transaction information every time to prevent data manipulation. This technology is applied to various fields in real life because of low cost and high security.

Let’s take a closer look at the Bitcoin which is the most popular virtual currency in the world. The biggest benefit of this is that the payment method is simple due to the blockchain. So, it is possible to move away from complicated financial dealings and make dealings quickly. You also do not need to keep your currency in your wallet. And it is easy to carry. The best feature of it is people can be anonymous when they use it. It does not need personally identifiable information such as a name or registration number when creating a 'wallet', which is the bitcoin account. This is designed to protect the personal information of the user. However, there are many cases where people exploit the anonymity feature by taking advantage of the difficulty of tracking transactions. Also, bitcoin has a disadvantage in that it is not a stable currency because of high price volatility. Another problem is that the security system for bitcoin exchanges and accounts is poor.

Despite the various problems, the virtual currency boom is continuing and it is even more overheated in Korea. Why did Korea go crazy about the virtual currency? There is a public opinion that psychological factors reflecting society affected the people. Among them, 'get-rich-quick-fever', a term which explains the desire to make a lot of money in one try quickly, has been much mentioned. People fell into the idea that a virtual currency could help them escape from reality and find stability in socio-economically unstable situations. Some people say ‘Crowd mind’ played as a psychological factor. This means that people do not think deeply and follow trends. It can lead to dangerous consequences.

In January, as a response to this virtual money boom, the Korean government introduced the 'virtual currency trading real name system' to regulate virtual money. How have other countries responded to virtual currency? In Japan, where virtual currency is popular, bitcoin was accepted as a form of money. So, they implemented a system about virtual currency trading and prepared a taxation plan. China has outlawed virtual currency trading and ordered a closing of the virtual currency exchange in January. The United States designated virtual money as a subject to regulation of securities laws where the laws are expected to be implemented differently in each state.

Virtual currency is easy to use and the technology is under the spotlight in the fourth industrial revolution. However, the stability of currency is uncertain and there are many side effects about the speculation of virtual currency. Therefore, virtual money investments should proceed based on careful judgment.

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