What is Crypto?

I. Crypto Concepts

Crypto or Cryptocurrency is a form of electronic money issued by Blockchain projects and used as a means of transactions taking place on Blockchain platforms.

By using the encryption algorithm system of Blockchain technology, information about Crypto transactions will be guaranteed not to be changed or stolen in any way.

The most outstanding feature of Crypto in particular and cryptocurrencies in general is that anyone can be able to create this currency. However, the value of a Crypto coin will be assessed through whether it is widely accepted and used by the community. This is what sets it apart from fiat money that is issued, priced, and controlled by governments.

II. What is Crypto Exchange?

Crypto exchange is a place where investors conduct trading and trading activities of cryptocurrencies. It is seen as an online platform that mediates between Crypto investors.

After successful Crypto mining, the so-called Crypto miners will dump the amount of money they own on the Crypto exchange. Here, investors who are not qualified to directly participate in Crypto mining will conduct Crypto trading and investment transactions.

According to Coinmarketcap statistics, there are currently more than 300 Crypto exchanges in the world with a daily trading volume of nearly $500 billion. These numbers show that Crypto investment activities on exchanges are becoming more and more exciting. Some popular exchanges can be mentioned as Binance, Remitano P2P exchange, Huobi exchange, Kucoin exchange, Coinbase exchange, etc.

III. What is Crypto Investment?

Crypto investment is trading activities, buying and selling Crypto coins for the purpose of making profit thanks to price difference. To be able to invest in Crypto effectively, there are a few things to keep in mind:

Firstly, learn and filter information carefully: As mentioned above, there are now many Crypto coins traded in many different exchanges. This will give Crypto investors more options. However, investors should learn and filter carefully to have the most accurate understanding of the Crypto currencies about to invest. Some important information to keep in mind when screening include liquidity, value of money, creator (unit), reputation of the coin, etc.
Second, prepare a solid knowledge base: This is the most important note that any investor needs to make when participating in the Crypto market. Because Crypto is a relatively new field in the world, the information system and knowledge are multidimensional and not simple. Currently, the Crypto market is tending to focus on decentralized finance (DeFi) platforms as well as the establishment of open digital ecosystems. Investors need to actively learn to prepare a knowledge base, ready to seize the potential opportunities of this new market.
Third, note about the security of electronic assets: In the Crypto market in particular and the investment field in general, there are often many forms of fraud. In particular, for the Crypto segment, investors can be lured to provide private keys to access e-wallets, or scam through gift links to get personal information of investors. Following the advice of others is always a double-edged sword. Therefore, in order to participate in safe Crypto investment, investors need to pay attention, carefully check the reputation of Crypto when making transactions and evaluate risks thoroughly when buying tokens.

IV. Features and distinctions of cryptocurrencies

1. Features of Crypto

Crypto has the following main characteristics:
Decentralization: Crypto does not work like regular money nor is it governed by a central server. Instead, Crypto is distributed on a network with the participation of many peer-to-peer computers. This system is called a decentralized network.
Digital Currency: Crypto is a digital asset that can only be traded on the internet. Investors cannot directly hold ordinary paper money.
Peer-to-peer: With this form, investors will directly transact with each other on the online space without having to go through a third party. Thereby increasing processing speed and at no cost.
Anonymity: When conducting cryptocurrency transactions, investors do not need to provide personal information. At the same time, Crypto transactions are not managed by any third parties, so it is difficult to identify the identities of those involved in Crypto trading.
No dependency: Cryptocurrencies are not managed by 3rd parties. Therefore, investors can freely control money as well as actively conduct transactions on the system.
Global: Since this currency is not controlled by an authority in any country, Crypto can be traded anywhere in the world. Therefore, Crypto is considered a non-state currency.

2. Crypto Classification

According to Coinmarket statistics, there are more than 3000 different types of Crypto in the world today. The increasingly strong development of this market has been proving its position and growth potential, attracting the attention of a large number of investors.

3. Coins and Tokens:

About Coin: This is a cryptocurrency developed on an independent Blockchain platform. Coin has the ability to help solve problems related to payment, information security, finance, application development, etc.

About Token: This is a currency issued on Blockchain, but Token does not have its own Blockchain but will work on the platform of other blockchains. Currently, most tokens usually use Ethereum’s Blockchain according to the ERC20 standard. Besides, some tokens are developed on the platform of Solana (SOL), Binance smart chain (BSC), Avalanche (AVAX),etc.

4. Bitcoins and Altcoins:

Bitcoin: A cryptocurrency released in the form of open source code. Using a peer-to-peer protocol, Bitcoin transactions are made directly between the sender and receiver, without the involvement of middlemen.

Altcoin: Composed of Alternative and Coin. Altcoin is a term used to refer to all cryptocurrencies other than Bitcoin. The function of Altcoins is basically similar to Bitcoin. Currently, the most popular altcoins in the world can follow such as Ethereum, Tether, Litecoin, etc.

V. Advantages and disadvantages of digital currency

1. Crypto advantages:

Not regulated by any organization: As mentioned above, Crypto transactions are conducted through a peer-to-peer protocol, without intermediaries. Therefore, the transactions of investors will avoid control or manipulation.
Low transaction fees: The cost of making transactions for cryptocurrencies is almost zero.
Fast transaction processing speed: Currently some of the fastest Crypto coins can achieve transaction completion speeds in under 1 minute. In general, most transactions are processed within 2 minutes – 10 minutes. This is thanks to the peer-to-peer protocol without intermediaries combined with Blockchain’s breakthrough technology solutions such as DAG, Tangle, etc.
Not subject to inflation and counterfeiting: Cryptocurrencies have a finite amount and cannot be increased or decreased (for example, Bitcoin has a limit of 21 million coins). So Crypto will not be inflationary like paper money. In addition, Crypto is released on the Blockchain technology platform, in which cryptocurrencies will be mined by solving cryptographic algorithms. Each Crypto coin has a unique and unique code so it cannot be faked.

2. Limitations of Crypto:

Strong Price Volatility: Crypto has the ability to have very strong price fluctuations that pose a great risk to investors. This is also one of the biggest disadvantages of Crypto compared to other forms of investment. Specifically, it can be seen that Bitcoin with a price of about 1,000 USD in early 2017 by April 2021, the price has continuously increased to 63,000 USD. However, by July 2021, the price dropped to more than $40,000. At the end of 2021, Bitcoin price has a monthly fluctuation range of 13% – 40%.
Not widely recognized: Currently, the nature of cryptocurrency transactions is still a matter of controversy. Therefore, crypto in general and Bitcoin in particular have not been recognized in many countries and regions. This will make cross-border transactions difficult for investors as well as reduce the liquidity of this currency.
Challenges for those who are not tech-savvy: With the nature of being born and operating on the Blockchain technology platform, mining and managing cryptocurrencies requires a certain understanding of technology. . This will be a big challenge for traditional investors who are not familiar with today’s breakthrough new technologies.