Everyone has heard of Dotori of Cyworld or Cash of Naver. Bitcoin is not actual money but a type of money that can be used to buy items or pay for services. In other words, Bitcoin is a virtual currency and it is the name for the method by which this electronic payment works.
  Cryptocurrency is a type of digital currency, and it is a currency that is created by using a digital password to carry out deals. In order to create this cryptocurrency, it is mined when you decode 16-digit passwords among 64 different kinds through hash functions, and each successful decoding creates one bitcoin. Another concept that is mentioned when talking about bitcoin is blockchain.
  If bitcoin is cryptocurrency, blockchain is a public trading book, and it’s a technology that blocks hacking which can occur when making deals with cryptocurrency. In the case of a financial company, it stores a trading record in a centralized server, but blockchain sends a trading record to all users who participate in the trade and blocks counterfeit data by recording all data whenever trades occur. This allows people to transparently record trading records in books which anyone can read, and it lets various computers that use bitcoin verify these records every 10 minutes to block hacking.
  Currently, South Korea is overheated enough to account for more than 20% of global bitcoin deals, and bitcoin has become a hot issue in news and newspapers. Especially for Koreans in their twenties and thirties, they are very excited about bitcoin.
  The first reason the developer invented bitcoin or virtual cryptocurrency is that it is not regulated by a central bank. Secondly, it was also created to prepare for events when the governments and central banks might be unable to control a larger and more complicated financial market. Third, it is to resolve the security issue of hacking.
  A large number of people jumped into bitcoin, which is limited to 21 million units, so the more you mine bitcoins, the harder they are to gain. Also, there are more and more problems arising such as mining factories that use hundreds of computers to mine and pyramid schemes that sell fraudulent bitcoins.
  It is clear that the world is paying attention to virtual currency as a core technology that will lead the financial markets of the fourth industrial revolution. However, for now, its price changes are too dramatic, like gambling or the stock market, so it does not perform its actual function as a means of transaction or payment. Instead, it is being used as a means of speculation, which is causing a big problem.
  Recently, the foreign press has been releasing reports about bitcoin, and they are pointing at South Korea as a market that has the hottest investment frenzy in the world. The New York Times reported, “The population of South Korea is just one-sixth of USA, but there are more trades of virtual money in Korean won that include bitcoin than the US dollar.” and it also reported, “The fever for virtual money is the hottest in South Korea.” The biggest reason people get excited about bitcoin is the typical desire for a rise of status.
  Actually, most people who invest in bitcoin are in their 20~30s, and they are university students or those who just started out in their careers. It’s even difficult for people to manage their households with just a monthly salary, so bitcoin investors consider it the only way to move up to the upper class. When looking at previous speculation frenzies, there was a time when people got passionate about real estate and stock investment. They grew up hearing about the legends of past real estate speculations or stock investments, so they think of bitcoin as the best speculation method and they get excited about investing in cryptocurrency even though it’s risky.
  Ha Tae-hyeong, a professor of the Department of Business Administration at Suwon University, answered about the reason why many people are excited about bitcoin, where are many reasons why ordinary people are excited about bitcoin. In most cases, people had little investment chances for profits due to low interest rates. Next, as the governments excessive regulations have enfeebled the financial industries which can make profits, there has been a lack of lucrative financial products. Thus, the bitcoins, which can make huge profits, have excited the people.
  Also, young people are the most common investors in virtual currency. They are already familiar with game culture. They deal with virtual currency easily as an extension of exchanging game money. Korea having the most advanced ICT infrastructure in the world also contributes to the spreading investment in bitcoin.
  Bitcoin is a hot potato not only in Korea but all over the world. Whether or not to recognize it as a currency is different for each country. In Korea, the government published the Bitcoin Government Regulation Policies through a joint meeting of related ministries on December 13, 2017 to regulate bitcoin. At present, the Korean government doesn’t recognize it as a virtual currency. The main contents of the emergency measures for the government to regulate virtual currency and bitcoin are a reinforcement of the obligation to check the users personal information when people deal with virtual currency and strict actions against illegal activities such as mining. Choi Heung-sik, the director of the Financial Supervisory Service, said, “Although the transactions are not strictly prohibited, financial institutions can not directly trade virtual currency or create conditions for virtual coins.” It also said it will make strong regulations but it will not interfere with the development of blockchain technologies.
  Kim Kang-hui(13, School of Business Administration), who has a bitcoin investment, said, “As an experienced person, I realize every single word by the government makes investors move and prices fluctuate in the stock market and bitcoin market. At first, others did it, so I started with curiosity. But, at some point, I paid closer attention to fluctuations in the value of money, so I couldn’t concentrate on anything else. Although there are negative aspects of bitcoin, there are also positive aspects. Consequently, bitcoin will clearly play an important role in the fourth industrial revolution, so appropriate regulations and policies should be enforced.”

By Park Joo-hyun l jh38@cbnu.ac.kr
By Park Jeong-min l jm38@cbnu.ac.kr