VietnamCredit About Us Cafe€redit Contact Us
Go to cart
The situation of cryptocurrencies in Vietnam

The situation of cryptocurrencies in Vietnam

Wednesday 09, 09 2020
Choosing to invest in cryptocurrencies is often very complicated, not only for beginners but also for experienced investors who still face many obstacles.

I.  What is cryptocurrency?

Cryptocurrency is a virtual currency that uses cryptography to secure financial transactions. The first cryptocurrency that was created is Bitcoin in 2009 by Satoshi Nakamoto and it was known more widely in the next few years. Bitcoin value is just above zero from 2009 to 2011, the price increase considerably $29.60 in June, then fall back to $16 at the end of June and then continue to decrease to $5.53  at the end of 2011. In January 2013, the price increase sharply to $230 because of the public recognition of Bitcoin, and more people know more about it. But then the price decrease dramatically back to $68 in the same month. In October 2013, the price is approximately 100 dollars and reach its peak at $1147 in December then fall back to $520 n the same month. From 2014 to 2015, the value of Bitcoin fluctuates between $200 to $460. In 2016, the price ranging from $358 to $458. The fluctuated price of Bitcoin over time proves that cryptocurrencies are very unstable. After Bitcoin, there are other digital currencies that are created namely Litecoin which was released in October 2011 by Charlie Lee, and several other currencies also emerged such as Namecoin in 2011, Ripple in 2012, or Ethereum in 2015. In 2011, other than the appearance of other rival cryptocurrencies, Bitcoin was first used as a monetary transaction on black market websites like Silk Road which raised criticism for Bitcoin.

II.  Advantages & Disadvantages of cryptocurrency

1. Advantages

Firstly, cryptocurrencies have a low transaction cost compared to other payment method and the transaction process of cryptocurrencies is faster than transferring money through banks. Since there are no intermediaries, users do not have to pay fees for banks or organizations. It takes only a few seconds for the transaction to be broadcasted and the transaction will be verified in 10 minutes by miners. 
Secondly, the flexibility of cryptocurrency is high. Unlike banking transactions which takes few days for the payment get to other parties, Bitcoin is not controlled or regulated by any governments or organizations, the transactions take place between two parties and it cannot be prevented which makes payments for transactions can be quicker and cheaper than traditional transactions (Jurik, n.d). Bitcoin holders can pay any amount to anyone in the world instantly as long as other users also have a Bitcoin wallet and the transaction cannot be prevented or controlled. 
Thirdly, it is completely anonymous since users do not need to share their identity or the detail of transactions to government, banks, or corporations. All transactions are recorded and stored on blockchain but the identity of users participate in transactions is kept in secret, hid behind a Bitcoin address and Bitcoin users can create any number of addresses which are not connected to users’ name or IP address. 
One of the most prominent benefits of cryptocurrencies is decentralization. There is no authority like a government or central bank control the Bitcoin network which is distributed to every user and authority does not have the power to apply rules for Bitcoin holders. The Bitcoin network is managed only by rules and regulations that are created by the creator of Bitcoin, Satoshi Nakamoto. And since cryptocurrencies are decentralized, there is no inflation when related to cryptocurrency like Bitcoin. With other regular currencies, governments and economic institutions control the currencies and they can do whatever they want with it. Fiat currencies system relies on the central bank and they control the monetary system since they have the ability to print money which can decrease the value. However, the quantity of Bitcoin fixed and limited with only 21 million which means that after the maximum quantity reached, users will not be able to mine more bitcoins and there is no governments or corporations can affect it so Bitcoin is not affected by inflation There is no chance to use personal data for fraud since Bitcoin network does not require personal data, it uses public key and personal key instead. The public key is available to everyone like Bitcoin wallet address while the private one is only available for owners. The transaction is signed by interacting with private keys and applying a mathematical function which creates evidence that it is the owner who performs the transaction.

2. Disadvantages

Despite some advantages of cryptocurrencies such as low transaction fees, anonymity, decentralization and not being affected by inflation, there are several disadvantages of cryptocurrencies that should be considered. One of the drawbacks of cryptocurrencies namely Bitcoin is that it is very unstable and volatile. The price of digital currencies depends on some factors such as the supply of the currencies and demand for them, the competition between different cryptocurrencies like Litecoin, Etherium, Ripple which are emerged after the success of Bitcoin, and the popularity which help attract more participants help the price to increase. For instance, the Bitcoin price is proving to be strongly volatile, the price has fluctuated since its first introduction in 2009. The price was only about a dollars from 2009 to 2011 but from 2013, the price starts to increase due to public recognition and the value continue to increase and reached at nearly $20000 dollars in 2018 and then decrease in 2019.
Furthermore, security is also one of the biggest problems of cryptocurrencies since there is no authority control digital currencies so users have the responsibility to protect their accounts, all transactions cannot be reversed so users cannot recall those charges if other people gain access and spend their money. And because of the lack of security, cryptocurrencies can easily be hacked and cryptocurrency holders cannot take back once they got stolen. The cryptocurrency exchange Coinrail in South Korea had been hacked which cost Coinrail about 28 million pounds and the attack marks the vulnerable security system and weak regulation of the cryptocurrencies markets. Before that, the cryptocurrency exchange Coincheck in Japan was attacked and lost about 380 million pounds in early 2019.
Moreover, cryptocurrencies can be used for illegal activities as a result of providing anonymity to users. The anonymity of users and the transactions can be beneficial but people can use that privacy to conduct illegal activities such as drug and weapon trading. Because of the anonymity nature of the transactions and holders, Bitcoin had been used as an exchange instrument on Silk Road, an illegal black market website which mainly dealing guns, drugs, hiring hackers and contract killers and it is also a part of the deep web which cannot be used when using normal Internet technologies. Using Bitcoin to purchase illegal goods and services on this website helps buyers and sellers remain anonymous. This disadvantage of virtual currencies, particularly Bitcoin creates negative perceptions of cryptocurrencies for governments and banks.
Another disadvantage is that cryptocurrencies are not legally accepted by authorities and fully recognized by people. The distrusts in digital currencies comes from the unclear objective of its creation and many authors believe that using an electronic payment system will damage the way money emit by financial institutions like central banks. Also because of the weak regulation and because virtual currencies cannot be controlled by authorities, it is risky to invest in cryptocurrencies. Besides, it is hard to trust and invest in digital currencies because of the riskiness, especially the older generations who are used to traditional money like cards, notes. Since cryptocurrencies are new to everyone, it is required some knowledge about virtual currencies to invest, investing into digital currencies without knowledge can lead to the loss of money and expose themselves to hackers since mining cryptocurrencies required complex technologies so it is easy to understand why people reluctant to invest.
Cryptocurrencies have various advantages but also have many disadvantages, especially the security issue and the volatility in price and cryptocurrencies is a new market that is still under development so it is still unclear whether investing in virtual currencies is a right choice or not since the price is unpredictable. It depends on the knowledge of the cryptocurrencies of the users to forecast and decided to keep investing or exit the market.

III.  Top 10 cryptocurrency in Vietnam 2020

With such advantages and disadvantages, what are the criteria to evaluate the standards of a cryptocurrency worth investing? In order to choose the right coin for their crypto portfolio in 2020, investors and traders not only have to rely on data such as market cap, transaction volume but also economic, political, and social events, especially the COVID-19 pandemic are in progress.
So what are the 10 popular and heavily invested cryptocurrency units in the Vietnamese market?
Top 10 cryptocurrency in Vietnam 2020

Complied by Vietnam Credit


You may also like

Crypto vs. Cash: Why is cryptocurrency better?
Saturday 15, 02 2020

Crypto vs. Cash: Why is cryptocurrency better?

At one point, cryptocurrencies will replace fiat money. Crypto landings...
+84 981861066