Recently, crypto assets (virtual currency) have become a hot topic.
The value of the crypto assets that they originally had has risen sharply, and we have begun to see people in the media and on the streets who have made huge profits as a result.
But what exactly are crypto-assets? I think there are still many people who have such doubts. For many people, it can be said that a currency without a specific shape is very difficult to understand.
This time, we will introduce why technologies such as crypto assets and blockchain are attracting attention from the question “What is crypto assets (virtual currency)?” .
What is a crypto asset (virtual currency)?
Crypto assets, also known as virtual currency, are electronic data that can be handled like currency on the Internet. Its characteristics are that there is no organization or administrator that issues cryptographic assets, and that its value fluctuates greatly.
As cryptocurrencies are currency without physical objects, they tend to be confused with electronic money.
Since electronic money is managed by the issuer, auPay is managed by au and PayPay is managed by Softbank, but crypto assets do not have an issuer, so there is a worry that the company that temporarily manages them will go bankrupt and disappear. There is none.
In addition, the value of electronic money is equivalent to legal currencies such as the yen and the dollar, but the value of crypto assets is limited due to various reasons such as the limited number of crypto assets, low transaction volume, and being affected by regulations. There is also a difference in that the
After the birth of Bitcoin, crypto-asset exchanges that exchange fiat currencies and crypto-assets appeared one after another from all over the world, and crypto-assets (virtual currencies) spread rapidly.
What is blockchain
When understanding crypto assets, a very important keyword is this system called blockchain. Instead of managing data in one place as in the past, it refers to connecting with various terminals on the network and holding data in a distributed manner.
Crypto assets that are not managed by a third party are secured by this system, and even if data is lost from some terminals, it is possible to supplement it from other terminals. In addition, with this function and encryption technology, it is possible to instantly discover even if data is falsified or fraudulent.
Why was cryptocurrency born?
Start with Bitcoin
The origin of crypto-assets was born in 2008, based on a paper posted online by an unidentified person (or group) calling themselves Satoshi Nakamoto.
His thesis is “Bitcoin: A Peer-to-Peer Electronic Cash System”, which is the origin of Bitcoin. The 9-page paper, though not very large, was a major catalyst for a revolution.
A solution to the problems of modern money transfer systems
The paper presented a method to solve the problem of the money transfer system in modern society .
Then, what is the problem of the remittance system? One is the problem of intervening a third party such as a bank. As a result, there were inconveniences for third parties, such as incurring fees and not being able to send money on Saturdays and Sundays.
Second, the current financial system, which is based on the trust of intervening third parties, will stop functioning when that trust is lost, leading to the bankruptcy of the company.
In order to solve this problem, the paper suggested that instead of being managed by the country or central bank like the Japanese yen and US dollar, it would be managed by networks and calculations on the Internet.
Why crypto assets are attracting attention
Based on the background of the creation of crypto-assets, why are crypto-assets attracting attention? We will introduce its usefulness, features, and benefits.
Because it has scarcity value
For example, Bitcoin is limited to 21 million coins. Since there is no issuing institution, there is no price collapse or credibility fluctuation due to new issuance, so it is very advantageous for investment.
Benefits of not having a central administrator
There are three major advantages of not having a third party to manage:
1. Available for person-to-person transactions
2. Low fees
3. Cross-border transactions are possible
As we have said many times, there is no third party intermediary in cryptocurrencies. Therefore, it is very convenient for transactions between individuals, and it can be said that the benefits are greater not only for domestic transactions but also for international transactions.
In addition, since there is no third party to act as an intermediary, there will be no fees incurred by third parties, and speedy transactions will be possible . This is an important point for investors, where the speed of closing a deal is important.
In addition, unlike national currencies, crypto assets have a common value around the world. As a result, it can be said that it is attractive to be able to trade all over the world while minimizing the impact of currency fluctuations.
Usage of crypto assets
Crypto assets tend to be thought of as an investment destination, but what are the uses of having them? First of all, it can be used for transactions between individuals because the fees are cheap and convenient.
Recently, the number of e-commerce sites and restaurants that accept payments with crypto assets (virtual currency) is increasing. The adoption of Bitcoin (BTC) payments by large companies such as Microsoft also became a hot topic.
Buying and selling between fiat currencies and crypto assets is also conducted daily on exchanges around the world. Another way to use it is to raise funds for the development of new projects and technologies.
This time, we introduced what crypto assets (virtual currencies) are. “Crypto assets (virtual currency)” are electronic data assets that do not have physical assets, and unlike legal currency, they are not guaranteed by the government, but all assets are managed by the blockchain mechanism. It is used for remittance and settlement on the Internet, exchanges between individuals, and trading between fiat currency and cryptocurrency on exchanges around the world every day.
In addition, this site, Scholars Lab, is a strategy media for the blockchain game GameFi. To start a blockchain game, you first need to have a good understanding of crypto assets (virtual currency). If you are interested in learning more about blockchain games and GameFi after reading this article, “What are crypto assets?”, please read this article as well.