S(situation)
If you are often access to the Internet, I’m sure you’ve heard about Bitcoin. Bitcoin is a kind of cryptocurrency based on computer codes, it means code money, which has no real notes or coins. Actually cryptocurrency is a combination of cryptography and money, but it can only be used on the Internet. Bitcoin was created in 2010, and now it is the most famous and popular cryptocurrency which we have ever seen.
The value of cryptocurrency is dependent on crypto markets.
Last year the value of one bitcoin has reached more than US3000.
So you can see, cryptocurrency is notoriously volatile. That’s the characteristic of a cryptocurrency, as cryptocurrencies have no governments or hanks to support it.
If you’ve invested in bitcoins, and you might lose most of your money. That’s horrible.
C(conflict)
A new kind of cryptocurrency is appearing soon. Facebook announced that it will introduce its own digital currency-Libra. However, Libra is different from the other cryptocurrencies prevailing on the market.
Libra is going to be backed up by real money, including the US dollar, the pound, the euro, and Swiss franc. The value of libra is decided by a basket of major currencies mentioned above. Therefore, Libra is not a pure cryptocurrency as it will be associated with real money.
Q(question)
Cryptocurrencies are independent of financial institutions and governments, and their values are decided by the supply and demand in crypto markets. They might go up and down unexpectedly because they are subject to the whims, a kind of force unpredictable.
That is the opposite of the real money which are mostly issued by banks and supported by governments. The money in real world is reasonably stable, as governments and banks have established a control mechanism to prevent it from too much volatility.
A(answer)
If you are a risk-averse type of person, prefer less risk, then cryptocurrencies are not for you. If you enjoy the volatility of cryptocurrencies, then Bitcoins and other types of code money are your best gifts. You might earn a lot of money by speculating if your judgements of direction are correct. In the meantime, if your judgement is wrong, you will lose money to your skin.
