“Bitcoin scam,” “Losing everything in cryptocurrency investment,” “Debt and despair after investing in crypto”… These phrases have likely been among the most frequently seen in headlines and on social media in recent years. The truth is that investors in this field experience losses far more frequently than gains, with many of those who suffer losses often losing nearly 100% of their invested capital.
So, is Bitcoin specifically, and the cryptocurrency market in general, really as daunting as it seems? Let’s explore this in the article below!
First, let’s look at what Blockchain and Cryptocurrency are.
1. WHAT ARE BLOCKCHAIN AND CRYPTOCURRENCY?
1.1. What is Blockchain?
Blockchain is a chain of blocks technology that enables secure data transmission based on a highly complex encryption system. Like an accounting ledger in a company where every transaction is monitored and recorded, Blockchain records all transmitted information on blocks. Each block contains information about its creation time and links to the previous block to form chains, along with a timestamp and transaction data.
All data is recorded in these blocks, which are stored across the internet on peer-to-peer networked computers. Transactions must be verified by the network-connected computers, making it impossible to alter or interfere with transaction data. This security makes Blockchain highly valued for its safety and reliability in transactions.
Figure 1 – An illustration of Blockchain as linked data blocks
Blockchain has applications across various industries: media, telecommunications, financial services, insurance, healthcare, and more.
Advantages of Blockchain:
- High security
- Data cannot be lost or altered
- Ensures transparency
- Data is transmitted quickly
1.2. What is Cryptocurrency?
One application of Blockchain is Cryptocurrency, also known as digital or encrypted currency. Bitcoin (BTC) is the first cryptocurrency based on Blockchain.
To track the amount of Bitcoin each person holds and the transactions involved, a ledger is required, which, in this case, is the Blockchain. It acts as a digital file that records all Bitcoin transactions.
This ledger file is not stored on a central server, like a bank or data center. Instead, it’s distributed globally through a network of peer-to-peer computers that store data and perform computations. Each computer represents a “node” on the Blockchain network, with each node holding a copy of the ledger.
Bitcoin is considered the first cryptocurrency on the Blockchain platform. However, as time passed, Blockchain limitations became apparent, leading to the development of more advanced Blockchain generations, such as Ethereum (ETH) and Cardano (ADA). Therefore, the cryptocurrency market is expected to grow significantly, with more advanced Blockchain platforms emerging in the future.
2. The Present Reality and Future Potential of the Cryptocurrency Market
The most visible truths you can easily see (the surface):
- High risk and significant losses, with the potential to lose everything
- Scams: numerous fraudulent projects emerge to “trap” investors, raise capital, and then disappear
- No clear legal framework in Vietnam or most other countries.
The underlying truths, known only to those who have been in the market for a while (beneath the surface):
- The market is still young, so risk coexists with opportunity. With a market cap of only around 1000 – 2000 billion USD, market manipulation will continue. However, it holds strong growth potential in the future.
- A technological race is underway, with successive generations of cryptocurrency platforms offering significant improvements. Ethereum, for instance, introduced the concept of Smart Contracts, followed by other advanced platforms like Binance Smart Chain, Solana, and more.
- It is gradually attracting interest and investment from major organizations.
If you only look at the surface of the market—seeing only news about losses, scams, and high risks—then the cryptocurrency market indeed seems frightening. However, from a technological perspective and considering the benefits cryptocurrency can offer, this is a market with immense potential for the future.
Many people have lost money in this market, but some have achieved great success. It ultimately depends on how you approach the market. How well do you control your greed? Are you managing your investment capital effectively? Are you taking your investments seriously by equipping yourself with the right knowledge, skills, and mindset?
In its early stages, the market inevitably has many downsides and risks. However, opportunities and potential also abound. If you are not committed to seriously learning about cryptocurrency, then it may be wise to stay out of the market. But if you dedicate substantial time to understanding it, you may truly see and believe in the market’s future potential.
Conclusion
In conclusion, while the world of Blockchain and Cryptocurrency may seem intimidating at first glance, it is important to recognize the immense potential these technologies hold for the future. The risks and challenges are real, and many people have faced losses along the way, but with the right knowledge, discipline, and approach, the rewards can be significant. As the market matures and new, advanced Blockchain platforms emerge, the opportunities for growth and innovation are bound to expand.
If you are willing to invest time in learning, understanding, and developing the right strategies, the Cryptocurrency market could offer exciting possibilities. But, as with any investment, it’s essential to be prepared, cautious, and committed to ongoing education to navigate the ups and downs. The future of Cryptocurrency holds promise, and those who approach it with a responsible mindset and proper preparation may find themselves on the path to success.
So, is Cryptocurrency as scary as it seems? It doesn’t have to be, as long as you take the time to learn and manage your investments wisely.
