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The Novice’s Guide to Bitcoin

A+ gazuaaa! That is what I was saying many times during exam weeks. This Gazua has become a popular word from last year to today. But many people do not know about its origin. This word originated in the bitcoin community. Its users shouted out this word hoping for a rise in the market price of bitcoin. As bitcoin has become a trend, this word spread further. Many memes - a picture or video with an amusing caption that a lot of people share with each other online were created.

I want to be a marketer. Marketers have to be trendsetters. So I could not help but buy bitcoin. Therefore I bought about 60,000 worth of it. Because of its characteristic its market price keep changing every second, I kept my eyes on my cell phone during exam weeks. Soon after, my investment price raised up to 70,000. I thought it will continue go up for a while. However, my thought was wrong. The Korean government announced that they will regulate the bitcoin market. People who had bought bitcoins sold their coins. so my bitcoin price slumped to 40,000 in a night. Finally, I ended this tragedy by selling my coins when I was able to obtain some capital. I told this story to my friends but they didnt understand it, because they knew nothing about bitcoin. That's why I wrote this article. I want to make them (and you) feel empathy for my story.

First of all, we have to learn what bitcoin is. Bitcoin is a virtual currency and encoded by block chain technology. We can get this coin by solving calculations. But these calculations are not as easy as we think. It is hard, as experts take about 1~2 months solving a problem by using high-performance computers. This process to get a coin is called mine. It is hard for ordinary people to mine if you are not the owner of a PC room, who can keep the computers running. So people buy bitcoins through a bitcoin exchange (such as bithumb, coinone).

However, when we enter the bitcoin exchange, we may wander, because there are various virtual currencies from Bitcoin, the best known virtual currency, to others such as Ethereum, ADA which are less familiar. In short, we only have to think that one big set (the virtual currency) includes smaller things (Bitcoin, Ethereum, ADA). For example, world money is a big set but the dollar, yen and won are included.

In Korea, the virtual currency trade is especially heating up. That is why the words " gazua " and " kimchi premium " are popular all over the world. Kimchi premium means the price of domestic trades on the same virtual currency is higher than the price of an overseas deal. This phenomenon is caused because that the demand for a bitcoin is more than the supply. It is more complicated as the price of bitcoin was soaring last October. Experts explained that this situation is influenced by mob mentality - A group of 3 or more people, who act with a negative group conscience to show strength in numbers. There is another factor. It is the current economic situation. Today, making big money is one of the most difficult things to do. Above all, this situation has more impact on people in their 20s and 30s because they are often more influenced by their friends who bought coins and by using SNS. In addition, they have little savings. So they may want to make big money and to follow the trend. We can find some examples around us. We may have heard some gossip such as Our university students made a big profit, about hundred million won or our friends (like me) lost money with bitcoins.

These bitcoins also affected many people, because of the instability of Bitcoin. Some people have more interest in stocks and funds that are more stable than bitcoin. So interests about investment or economy have been increased. However, there are also side effects. Some neglected their lives due to their excessive concentration on Bitcoin. Furthermore, the necessity of regulation appeared as some buyers were damaged by fake virtual currencies. Additionally, bitcoin exchanges have been hacked, even though they traded bitcoins using block chain technology, which is known to be superior in security.

Now, there is a conflict between people who have bought coins and the government, about regulations. I think that regulations are in need. But the government must guarantee the freedom of buyers. Also, I think it is time to adopt another policy about this economic situation - "The rich get richer and the poor get poorer."

Choi Hyejin  hongiktidings@naver.com

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