The rise of cryptocurrencies like Bitcoin continues to generate global discussion and debate. Known for extreme price volatility, these digital assets attract both cautious investors and bold pioneers. Tesla CEO Elon Musk, a well-known supporter of cryptocurrency, frequently influences market trends through his Twitter activity. In March 2021, Musk announced that Tesla would accept Bitcoin as payment for vehicles—a decision later reversed due to environmental concerns related to Bitcoin mining. Nevertheless, his involvement underscores growing corporate interest in virtual currencies.
Bitcoin’s value has seen dramatic shifts, from a major surge early in the year to a mid-year slump, followed by a strong recovery post-pandemic. In a landmark move, El Salvador adopted Bitcoin as legal tender in September, drawing worldwide attention to the future of digital finance.
Understanding Cryptocurrency and Virtual Currency
“Rising interest in cryptocurrencies has reignited central banks’ digital currency ambitions.” — CNBC, November 12, 2021
The word cryptocurrency combines “crypto,” meaning secret or encrypted, with “currency,” which comes from the Latin roots cur- or curr-, indicating flow or movement. This makes sense, as money is meant to circulate. Related terms include current (as in current affairs), cursor (which moves on your screen), and concur (to happen at the same time).
Virtual currency refers to digital money that isn’t physical. The term virtual means “almost” or “simulated,” and is commonly used in terms like virtual reality (VR). Recently, Facebook rebranded as Meta, signaling a deepened focus on the metaverse—a shared virtual space.
In the context of standardized tests like the TOEIC, virtual can also mean “in effect” or “nearly.” For example:
After several bad investments, the company was virtually bankrupt.
Cold Wallets vs. Hot Wallets: Storing and Transacting Securely
Bitcoin mining requires significant computational power and energy. Miners use high-speed computers to solve complex algorithms, a process that demands substantial electricity. For years, regions like Sichuan, Inner Mongolia, and Xinjiang in China hosted nearly half the world’s Bitcoin mining operations. However, citing energy waste and environmental concerns, the Chinese government banned cryptocurrency mining in 2021, leading many miners to relocate abroad.
Security remains a major concern for cryptocurrency users. Many people use hot wallets—online wallets that allow quick and convenient transactions via the internet. However, these are vulnerable to hacking. Alternatively, cold wallets are offline storage devices (like USB drives) that offer stronger protection against cyber theft.
It’s important to note that cryptocurrencies aren’t actually stored in wallets. Instead, wallets hold private keys that provide access to transaction records on the blockchain.
The verb transact means to conduct business or make an exchange, and its noun form, transaction, is commonly used in banking and commerce. For example:
Most banks in Taiwan charge a small fee for each domestic transaction.
Following Elon Musk’s lead, Apple CEO Tim Cook has also expressed personal investment in cryptocurrencies. Sportswear giant Nike has filed trademarks for virtual products, signaling that digital currencies may soon become mainstream.
Frequently Asked Questions
What is a cryptocurrency?
A cryptocurrency is a digital or virtual form of money that uses cryptography for security. It operates on a technology called blockchain, which is a decentralized ledger managed by a network of computers.
Why did Tesla stop accepting Bitcoin?
Tesla suspended Bitcoin payments due to concerns about the environmental impact of Bitcoin mining, which consumes large amounts of electricity, often generated from fossil fuels.
What is the difference between a hot wallet and a cold wallet?
A hot wallet is connected to the internet and allows easy access for frequent transactions. A cold wallet is offline and used for secure long-term storage. Cold wallets are generally considered safer from hacking.
Is Bitcoin legal?
Bitcoin is legal in many countries, but regulations vary. Some nations, like El Salvador, have embraced it as legal tender, while others have restrictions or bans in place.
How do I start investing in cryptocurrency?
You can buy cryptocurrencies through online exchanges using traditional money. It’s important to research thoroughly, understand the risks, and 👉 explore secure trading platforms before investing.
Can cryptocurrency be converted to cash?
Yes, most cryptocurrencies can be sold on exchanges for traditional currency, which can then be withdrawn to a bank account.
This article introduces key terms and concepts around cryptocurrency, helping you discuss the topic confidently in English. Whether you're interested in investment, technology, or global trends, understanding crypto vocabulary is becoming increasingly essential.