What is Bitcoin?

What is Bitcoin?

Bitcoin is a digital currency used on the internet. It is a system designed to allow people to send and receive money directly without central institutions like banks or governments.

Why was Bitcoin created?

Traditional currency systems must go through banks and governments. Accounts can be frozen, transfers can be blocked, or assets can be restricted depending on the country's situation.

Bitcoin was created to solve these problems.

• Usable without permission from specific institutions
• No one can arbitrarily print more money
• Works with the same rules anywhere in the world

How does Bitcoin work?

Bitcoin stores all transaction records in a single ledger. This ledger is stored and verified simultaneously by numerous computers around the world.

• Transaction records are public to everyone
• Once recorded, content cannot be changed
• To manipulate, someone would have to deceive all computers in the world simultaneously

That's why Bitcoin has a structure that is almost impossible to counterfeit.

Who manages Bitcoin?

Bitcoin has no manager. Instead, people participating in the network monitor each other to ensure rules are followed.

There are people who verify and record transactions, and this process is called mining.

Why is Bitcoin scarce?

Bitcoin is designed to exist only up to 21 million coins. No more will ever be created.

Additionally, approximately every 4 years, the amount of newly created Bitcoin is halved. This structure is called the halving.

What is Bitcoin used for?

Currently, Bitcoin is mainly used as a long-term holding asset rather than a payment method.

• Asset against inflation
• Long-term value storage
• Benchmark asset of the cryptocurrency market

Bitcoin vs Stock vs Gold at a glance

Category	Bitcoin	Stock	Gold
Asset nature	Digital scarce asset	Company equity	Physical asset
Issuer	None (decentralized)	Company	Natural mining
Supply	Fixed (21 million)	Unlimited	Limited
Value source	Scarcity, network	Company performance, growth	Scarcity, historical trust
Volatility	Very high	Medium	Low
Long-term tendency	High risk·high return	Medium risk·medium return	Low risk·preservation
Inflation hedge	Strong	Varies by company	Strong
Storage method	Wallet (digital)	Securities account	Physical·vault·ETF
Trading hours	24 hours	Market hours	Market hours

1. Bitcoin

A digital asset that operates without central institutions. The total supply is fixed, making scarcity clear. Price volatility is very high, but it is recognized as an inflation hedge in the long term. Sensitive to technological and regulatory changes.

2. Stock

An asset representing partial ownership of a company. Company performance and growth determine prices. Cash flows such as dividends and share buybacks may exist. Affected by economic and industry cycles.

3. Gold

A representative safe asset used for thousands of years. High trust as a physical-based asset. Price volatility is low, but it is difficult to expect large returns. Plays a role in preserving value in crisis situations.

Bitcoin (BTC), Why Look at It Now

– Easy Investment Logic for Beginner Investors

1. One-Line Conclusion

Current Bitcoin is "a risky asset that people have lost the most interest in, while being an asset that is structurally difficult to disappear". Therefore, it can be viewed as a period for position-taking investment rather than short-term speculation.

2. What is the Current Market Sentiment?

Everyone is Afraid

• Cryptocurrency Fear & Greed Index: 25 – in the 'extreme fear' zone.
• Funds are also flowing out of Bitcoin ETFs.
• Trading volume is decreasing, and almost no one is talking about coins.

3. Why Bitcoin "Cannot Completely Fail"

Bitcoin is Not Just a Number

Bitcoin requires the following to be created:

• Electrical energy
• Expensive mining equipment
• Data centers and infrastructure
• Operating personnel

In other words, it is an asset that requires real costs (production costs).

That's Why "Mining Cost" is an Important Concept

• Current average mining cost is approximately $80,000~$110,000
• If the price falls much lower than this:
  • Miners suffer losses and turn off equipment.
  • Supply decreases
  • Pressure for prices to rise again emerges.

4. Is the Current Price Expensive or Cheap?

Current Bitcoin price is approximately $95,000.

Looking at various criteria:

• Lower than mining costs
• Lower than average investor purchase price
• MVRV (indicator for judging overheating) is below neutral

5. Why Is Now Important? (3 Reasons)

① Political·Economic Environment

• The United States is approaching the 2026 midterm elections.
• Before elections, there is usually:
  • Economic stimulus
  • Pressure to lower interest rates
  • Inducement of asset price stability or increase

This is because asset prices must rise for voters to feel the economy is improving.

② Gold → Bitcoin Sequence

• Recently, funds first moved to gold.
• If risk appetite revives afterward:
  • Funds often move in the order: gold → stocks → Bitcoin.

The fact that Bitcoin has not yet risen can be viewed as room to move later than assets that have already risen significantly.

③ Institutional Framework Expectations

• Legislation is being discussed in the United States to clearly classify Bitcoin as a "commodity".
• If passed:
  • Institutional investors can enter without legal uncertainty.
• If it fails, there will be short-term shocks, but long-term discussions are likely to continue.

6. How to View Target Price (For Beginners)

Bitcoin is difficult to calculate like stocks with "profits". Therefore, it is reasonable to approach it by range.

• Price range that can structurally hold: $80,000~$110,000
• If the market improves, based on past cases: 1.5~2x range above that

7. Realistic Strategy for Beginner Investors

Keep Allocation Small

• Within 1~5% of total assets
• Dollar-cost averaging rather than "all at once"

Time Perspective

• Rather than expecting short-term surges, focus on structural changes over 6 months or more

Loss Management is Key

• Bitcoin has very high volatility.
• More important than "how much can I make" is "how much can I afford in the worst case".

8. Risks You Must Know

• If interest rates surge again
• If regulatory discussions drift for a long time
• If major exchange accidents or stablecoin problems occur

9. Summary

Bitcoin investment is not a game of guessing "will it rise right now?".

• Can this price structurally hold?
• When people are most afraid, have all the bad news already been reflected?
• Is it an asset with low probability of disappearing long-term?

It is an asset approached through answers to these questions.

Common beginner mistakes

1. Entering based only on price

Buying Bitcoin without understanding its structure and purpose, only looking at the price. Often buying on momentum due to surge news and community sentiment. When prices fall, they don't understand why and repeatedly panic sell.

2. Investing all assets or excessive allocation

Investing a large amount all at once. Using living expenses and emergency funds for investment. Unable to withstand psychologically when prices fall.

3. Keeping it on the exchange

Leaving Bitcoin in exchange wallets for long periods. Not considering risks of hacking, exchange bankruptcy, or withdrawal restrictions.

4. Relying on others' opinions

Trading based on YouTube, community, or friend recommendations. Unable to explain why they bought. When losses occur, confusion increases due to lack of judgment basis.