▲ Virtual money becomes an issue.

 Virtual money became an issue because one bitcoin went through the roof from 3500 to 3800 dollars on May 25th in South Korea.

Therefore, virtual money is an issue in South Korea now.

The term “virtual money” refers to the digital money that is used on virtual world like online community and administered by publishing office of virtual money. Its typical kind is bitcoin. In addition, there are ethereum, litecoin, dashcoin and many others. To earn virtual money, we have to go through the process called mining, which deciphers the various codes.

▲ Publishing money does not need if virtual money is used.

 First of all, there are some advantages for virtual money.

It does not issue at the government or central organization.

For this reason, if we use virtual money, we can reduce the cost for issue of money and cut down transaction cost like transfer cost.

 Also, not only domestic trade but also foreign trade is achieved for free, so we do not need to exchange the currency.

Lastly, we can conduct transactions quickly because we can deal personally and anonymously.

On the other hand, there are some risks for virtual money. The biggest problem of virtual money is the matter of security like hacking. Someone can hack into a personal account and exchange. Moreover, it is abused for crimes because there is no legal regulation, and it is hard to track the account. Secret ability is guaranteed, so it is used for drugs, gambling, and tax evasion. Finally, instability of cost is the problem. Because its value is uncertain, its users only save it or speculate it.

▲ Hacking is the biggest problem of virtual money.

According to the book titled “Curse of Cash” by Kenneth Rogoff, a Harvard University professor, claimed, “if we abolish paper currency, economy will be activated.”

It means the underground economy will be legalized, tax revenue will increase, and social cost for crimes will decrease.

Currently, the situation of virtual money is “transition period”.

If the number of users decreases, or another virtual money is created, the value of virtual money will be decreased.

Also, we do not know the future value of virtual money, so the value of virtual money will soar to 20 thousand times like first mining in 2009, or it will plummet to 80% like hacking in 2013.

We should be more careful to use virtual money.