A detailed introduction to virtual currency is a must-read for novices

Virtual currency is a digital asset encrypted using cryptography technology, with its main features including decentralization, encryption security, global circulation and relative anonymity. Virtual currency has a wide range of application scenarios, including value storage, trading media, investment and financial management, DeFi, NFT, blockchain games, smart contracts, dApps and governance voting. Participating in virtual currency requires 1) Learn basic knowledge, 2) Select a trading platform, 3) Register and verify your identity, 4) Purchase virtual currency, 5) Safely store, 6) Participate in the community. Investments need to pay attention to risks such as price fluctuations, market, technology, supervision, fraud and information asymmetry.

For newcomers who are new to the currency circle, understanding the nature, operational methods and risks of virtual currency is the key to embarking on the journey of digital assets. This article will provide you with a comprehensive introduction to virtual currency, covering what virtual currency is, what can be done, how to participate, and things to pay attention to, so that you can easily get started and avoid minefields.

Important tips: Digital asset investment is risky, so please be sure to invest with caution on the basis of fully understanding the relevant knowledge. This article is for information reference only and does not constitute any investment advice.

1. What is virtual currency?

Virtual currency, also known as cryptocurrency or digital currency, is a digital asset that uses cryptographic technology to encrypt. The main characteristics that distinguish them from traditional currencies (such as the US dollar) are:

• Decentralization: Without central banks or financial institutions, transaction records are stored on distributed ledgers (blockchain) and maintained by participants in the network. This means that transactions are more transparent and open and less likely to be tampered with.
• Encryption security: Use complex cryptography techniques to encrypt, ensuring the security of transactions, making them difficult to track and tamper with.
• Global circulation: It can be traded globally, without geographical restrictions, and has strong liquidity and international characteristics.
• Anonymity (relative): Although the transaction records are open and transparent, the user's identity information is usually anonymous, protecting the user's privacy.

Mainstream Bitcoin Exchanges in 2025:

Ouyi official website:

Binance official website:

gate.io official website:

bitget official website:

Sesame Open Door Official Website:

2. What can virtual currency do? The application scenario reveals

The application scenarios of virtual currency are constantly expanding, mainly reflected in the following aspects:

1. Store of Value: Similar to gold, virtual currencies can be used as store of value tools to resist inflation and asset depreciation.

2. Transaction medium: Virtual currency can be used as a payment method, used for online shopping, cross-border payment, etc. More and more merchants are beginning to accept payments for virtual currency.

3. Investment and financial management: Virtual currency can be used as an investment target, and investors can obtain profits by buying and selling virtual currency. However, due to the large fluctuation of virtual currency prices, investment risks are also higher.

4. DeFi (Decentralized Finance): Virtual currency is the core of DeFi applications and can be used for lending, financial management, transactions, etc. DeFi aims to build a financial system without intermediaries and provide more open and transparent financial services.

5. NFT (non-fungible token): Virtual currency can be used to purchase and trade NFTs, such as digital artworks, collectibles, etc. NFT gives digital assets unique features.

6. Blockchain games: Virtual currencies can be used in blockchain games, such as purchasing game props, participating in in-game activities, etc.

7. Smart contract: Virtual currency is used to execute smart contracts. Smart contracts are an automatic protocol that can implement various automated tasks.

8. Decentralized applications (dApps): Virtual currencies can be used as fuel for dApps to pay for the usage of dApps.

9. Governance Voting: Investors holding specific virtual currencies can participate in the governance voting of the project, such as determining the future development direction of the project.

3. How to participate in virtual currency? Getting Started Guide for Beginners

1. Learn basics:

• Understand blockchain technology: Learn the basic principles of blockchain, such as decentralization, consensus mechanism, etc.
• Be familiar with various virtual currencies: Understand the characteristics and application scenarios of mainstream virtual currencies such as Bitcoin and Ethereum.
• Learn trading knowledge: Understand trading terms, technical analysis, fundamental analysis, etc.

2. Select a trading platform:

• Choose a safe and reliable exchange: Examine the exchange's security measures, historical security records, and user fund guarantee mechanism.
• Compare transaction fees: Understand the handling fees, cash withdrawal fees, etc. of different exchanges.
• Consider user experience: Choose an exchange with a friendly operating interface and fast trading speed.
• Recommended exchanges (for reference only): Coinbase (for beginners), Binance (the largest in the world), Ouyi (OKX, strong derivatives), etc.

3. Register an account and authenticate:

• Register an account and complete identity verification (KYC) as required by the exchange.
• Identity verification usually requires providing ID photo, address proof, etc.

4. Purchase virtual currency:

• Buy the virtual currency you are interested in through the exchange.
• You can use fiat currency (such as US dollars, euros) or other virtual currencies to purchase.

5. Safe storage:

• Store your virtual currency in a safe place. Consider using a hardware device or software and be sure to back up your key.

6. Participate in the community:

• Join the virtual currency community, communicate with other investors, and obtain information and support.

4. Risk warning: Things to note when investing in virtual currency

• Price fluctuation risk: The price of virtual currency fluctuates violently and the investment risk is high.
• Market risks: Factors such as market sentiment and policy changes may affect the price of virtual currency.
• Technical risks: Blockchain technology is still in its early stages of development and there may be technical loopholes.
• Regulatory risks: There is uncertainty in government regulatory policies on virtual currencies.
• Fraud risks: There are fraudulent behaviors in the virtual currency market, so please be vigilant.
• Information asymmetry: The information in the virtual currency market is complicated, please be careful to distinguish it.

5. Summary

As an emerging digital asset, virtual currency has huge potential and risks. Mastering the basic knowledge, choosing a formal platform, and doing a good job in risk management are the key to your successful participation in digital asset trading.

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