Basics of Bitcoin that are completely understandable even for total beginners (Episode 1)

Serialized Column：Starting from Zero: Cryptocurrency Trading：Episode 1

Bitcoin is a representative of what is called virtual currencies or crypto currencies.

You can think of it as money itself. It is money, but since it exists as a sequence on computers and networks, it is referred to as a "virtual" or "cryptographic" currency. It is not tangible like yen or dollars.

Bitcoin Units

The unit is BTC (Bitcoin). It is counted as 1 BTC or 500 BTC.
Sometimes it is also displayed as 1 XBT. In the international standard ISO 4217, the first two letters designate the country, and the last letter designates the currency of that country. If you see USD or JPY, an FX trader would understand immediately.

When it is not a country’s currency, the rule is to start with X. The same as gold (XAU) and silver (XAG). Bitcoin is not managed by a central authority, so according to ISO, XBT would be the official code, but BTC is more commonly used.

Advantages of Bitcoin

Unlike currencies controlled by governments or central banks or run by some company, Bitcoin differs greatly from dollars and yen.

Its advantages include fast direct peer-to-peer transfers without going through banks, and very low fees, so even small amounts can be settled or transferred with anyone anywhere in the world.

Of course, you can also use it to purchase goods or pay for services.

Different from Electronic Money

When I told a friend, they asked, “Isn’t it the same as electronic money?”, but it is different.
For example, electronic money charges you top up funds to use conveniently, but Bitcoin is the currency itself.

Many Types

In addition to Bitcoin, there are many groups classified as altcoins or Bitcoin 2.0. Here are some representative ones.

Ethereum
As of April 2016, Ethereum is the second-largest by market capitalization after Bitcoin. It is not a transaction ledger but a type that describes contract information called "smart contracts," with potential applications in areas like escrow, trust, derivatives, stocks, and bonds. Using Ethereum as a platform, various project teams around the world are developing in diverse domains.

NEM (XEM)
NEM stands for New Economy Movement, aiming to create a new economic zone based on principles of financial freedom, decentralization, equality, and solidarity. The issued cryptocurrency unit is "XEM," with a total supply of 8,999,999,999 XEM, distributed fairly among about 1,600 investors, so there is no mining.

NEM is the first cryptocurrency designed to prevent reward concentration among large mining groups by using a mining system funded by substantial capital.

Japan’s exchange Zaif operated by Tech Bureau developed the private blockchain "mijin," based on NEM technology. In December 2015, Nomura Research Institute and SBI Net Bank announced adopting mijin for their blockchain proof-of-concept, drawing attention.