In the most basic definition, cryptocurrency is a digital currency protected through cryptography. With this technology, cryptocurrency is almost impossible to fake, counterfeit, or double spend. Cryptocurrency also allows for total anonymity between the sender and receiver and cryptocurrency.

Cryptocurrency is appealing for many people for the reasons stated above. However, what makes it even more fascinating is that it is volatile, and history shows that it has experienced tremendous gains (and losses) in value. It is easy to make a profit in cryptocurrency, as long as you know what you are doing.

A brief history of cryptocurrency


Bitcoin digital currency, litecoin, ripple, dash ,and zcash in form of newton cradle

Cryptocurrency started its life with Bitcoin, the very first cryptocurrency. Invented by Satoshi Nakamoto, Bitcoin piloted blockchain technology. The first purchase of goods using Bitcoin was back in 2010, where Laszlo Hanyecz purchased a couple of pizzas by paying 10,000 BTC. This event is known to Bitcoin enthusiasts as Bitcoin Pizza Day.

By 2013, Bitcoin was able to get level with the US Dollar in terms of value. This is also the year where different cryptocurrencies, also known as altcoins, emerged. This is a pivotal moment in cryptocurrency, paving the way for competition and better features and developments.

How does cryptocurrency work?


Now that you know what a cryptocurrency is, we will now move on to how it works. Cryptocurrencies such as Bitcoin runs on a public ledger powered by the blockchain, which will be explained below.

1. Decentralized ledger


All cryptocurrencies have a decentralized ledger in which every single transaction is available to the public. With this, there is total transparency on the records. This public record system effectively eliminates the risk of double-spending and dramatically reduces the possibility of scams and fraud.

The ledger is a directory of records in a data source that no one can modify unless they satisfy special conditions to do so. No one controls the ledger of cryptocurrency. It is powered by a blockchain, and it is decentralized. This means that the ledger can sustain itself without having a regulating or controlling body.

2. Blockchain & Cryptocurrency


Bitcoin Blockchain background

As stated above, the blockchain powers the decentralized ledger that cryptocurrencies depend upon. Cryptocurrencies will not be able to operate without the blockchain. It is not possible to understand what cryptocurrency is without discussing blockchain first, so be sure to read carefully.

3. The role of blockchain in validating transactions


To accurately describe the part of blockchain in cryptocurrencies, let’s make an analogy. As an example, you purchased Bitcoin through a crypto exchange. Now you want to use the money to pay for a transaction. After making the transaction, it will be unconfirmed first. This means that the payment is still unofficial, and it will not be confirmed. Your purchase will be confirmed by going through a validation process. After that, your transaction will be recorded on the decentralized ledger.

4. The role of mining in cryptocurrency



Data center room

People mining cryptocurrency on their computers are the ones who verify the transactions, which are then added to the decentralized ledger. Mining requires robust computer systems to resolve complicated mathematical problems. Once the mathematical problem is solved, the transactions within a block are verified and stored in the ledger. This procedure is known as the “proof-of-work system.” Anyone can contribute to cryptocurrency mining. Even just an office computer or a mobile phone will do. However, if you are not using powerful and dedicated hardware for mining, you will just likely lose to miners that have better computers.

After a block was verified and stored in the ledger, the miner who solved the complex mathematical problem with their computer will get cryptocurrency as a reward. The rewarded cryptocurrency differs. As an example, when Bitcoin was first released, it awards 50 BTC for every mined block. However, that amount halves at set times, and nowadays, the Bitcoin reward is just 12.5 BTC for every mined block.

What can you do with cryptocurrency?


With all talks about how great and profitable cryptocurrency is, let’s talk about its practical applications when it comes to payment, and as an investment.

1. Use cryptocurrency to pay for goods and services


A man holds  golden bitcoin and wallet in hands

You can use cryptocurrency to pay for products and services. Most of the establishments accepting cryptocurrency as payments are online-based. However, there are still physical locations that accept crypto. Some of those include banks, electronics stores, and restaurants.

Even though some companies initially supported accepting cryptos as payment, but later receded their support due to cryptocurrencies’ volatility. There are still a lot of establishments that accept cryptocurrency for payment. The list also grows, with many banks, restaurants, shops, and service providers adopting the integration of cryptocurrency into their payment methods.

2. Use cryptocurrency as an investment device


Aside from being a currency that you can use to pay and receive payment for goods and services, cryptocurrency can also be an investment device. The significant increases in cryptocurrency values are an excellent reason to start treating it as an investment.

3. Invest in cryptocurrencies passively


Binance mobile app running on smartphone

You can invest passively in cryptocurrency. This means you will purchase a few cryptocurrencies and keep it so that you will earn money when the particular cryptocurrency you bought increased in value. 

As an example, the price of one Bitcoin in July–September 2016 is USD $600 to $630. Then, within just a few months, the rate increased to USD $750 to $920 in January 2017. Bitcoin prices rose as high as USD $19,783.06 on December 17, 2017. 

Having that said, there are also decreases in value to Bitcoin, similar to the stock market. As such, when investing in Bitcoin, you should purchase when its value is low. 

With this in mind, there is a better way to earn profits on cryptocurrency. That is by trading in one of the many crypto exchanges.

4. Participate in active trading of cryptocurrency


Before you can trade, you will need to sign up for a cryptocurrency exchange. A cryptocurrency exchange is similar to a stock market exchange, and it is the platform in which the trading of cryptocurrency takes place. Active trading means that you will buy and sell cryptocurrency to make a profit. It’s more time consuming compared to the first method mentioned above. However, this way of investing in cryptocurrency will also generate more money. If you want to take cryptocurrency seriously, you should consider active trading.

What is so revolutionary about crypto


In this section, we will discuss some of the reasons why the cryptocurrency is considered innovative.



Bitcoin laptop chart

Unlike other financial assets in which volatility is bad, in cryptocurrency, it is not necessarily bad. A lot of people benefited from the volatility of cryptocurrencies, especially with Bitcoin.

Stock market and cryptocurrency are related when it comes to real-life events usually have massive outcomes.

As an example, although Libra, a cryptocurrency proposed by Facebook was not launched, it still had a massive effect on the prices of Bitcoin. Smaller events such as the president of the United States tweeting about it can increase the rate of cryptocurrencies.

These small events usually only have a little effect. Other actual factors have a more significant impact, and they will be discussed below.

1. The cryptocurrency market is still immature


Soybean growth in farm with blue sky background

Bitcoin and cryptocurrencies existed for ten years at this point in time. Even though that is a long time from our perspective, ten years is a brief period for a financial market. In other words, the cryptocurrency market is just in its beginnings, even after ten years. Cryptocurrency has not reached its entire potential when it comes to proper use and the technology surrounding it. At the initial phases of any kind of market, the opinion of the public is the turning point of price changes.

This is why cryptocurrencies experience tremendous gains or losses whenever there are news or speculation about it. It reflects the sentiments of people involved in cryptocurrency. If people are excited about a positive development in cryptocurrencies, such as when Facebook announced their cryptocurrency, the prices will increase. The opposite is also exact. When there is depressing news about cryptocurrencies, such as a country imposing restrictions, cryptocurrency prices tend to decrease.

2. Type of crypto investors


Even though many individuals refer to themselves as active traders of cryptocurrencies such as Bitcoin, the crypto industry is primarily filled with retail investors. There are very few institutional funds in circulation as a result of these retail investors.

The majority of retail investors treats the cryptocurrency market as a one-time investment. This is the reason why there are so few hedge funds and pension funds available in the crypto market. When there are a lot of active traders in a fair, it will get more liquid and thus, more stable. The rise of cryptocurrency exchanges is poised to solve this problem, with the most popular exchanges having a lot of transactions every day.

3. Insufficient laws and regulation


The final variable that we listed should not come as a shock to a person that is updated about the current status cryptocurrency market. Bitcoin and other cryptocurrency are mostly unregulated. Right up until a couple of years or so, there are zero safety measures or regulating laws that concern cryptocurrency.

Because of this, many investors had been somewhat hesitant to penetrate the cryptocurrency market. The lack of protection turns off a lot of investors, especially that are scared of losing their hard-earned money. Only people who have a lot of self-confidence and people who already experienced gaining a profit from cryptocurrency trusts investing in it. This contributes to the tendency of cryptocurrencies to have abrupt and massive changes in price.

This has changed in Singapore though, as the Singaporean government has imposed some legislation regarding cryptocurrencies such as Bitcoin. This will be discussed in more detail later in this article.

Will cryptocurrency stay volatile?


It cannot be assumed that the volatility of the cryptocurrency market will stay the way it is today. In the end, technological advancements will help make financial transactions faster and risk-free, which will help increase the popularity and stability of cryptocurrencies.

Besides, new regulatory measures around the world will provide confidence to new investors that are hesitant in investing in cryptocurrency. More and more countries are introducing further organizational measures for cryptocurrency, such as Singapore. More regulations from the government will help in making cryptocurrency more stable, and will also cause the market to get bigger as investors gain confidence.

Cryptocurrencies such as Bitcoin are predicted to be still volatile shortly. This might be a problem for people. However, it is a blessing in disguise for people who can adequately control their investments. Cryptocurrency is accessible for people who can take advantage of the volatility of the market to make a profit. 

Bitcoin’s unpredictability should not be a significant issue if you consider it when coming up with an investment method. As stated above, volatility provides new opportunities to earn, and even inexperienced investors and traders can take advantage of it with the help of a mentor, reading materials on the internet, and a bit of luck.

The future of cryptocurrencies


In this section, we are going to discuss the future of cryptocurrencies in different countries around the world, but more particularly in Singapore.

1. The legalization of cryptocurrency


Golden bitcoin coin with judge wood hammer

There are some countries and cities that banned cryptocurrencies altogether. Cryptocurrencies and crypto exchanges such as Bitcoin are legal within the United States, Japan, Canada, United Kingdom, and the majority of developed countries as of February 2020. Things are different in emerging markets, though. 

In China, transactions involving cryptocurrencies such as trading, buying and selling are greatly restricted, although it is still legal to own cryptocurrency. 

This means that exchanges cannot operate in China. Meanwhile, India has restricted banks from using cryptocurrency. This led to confusion about India’s position on cryptocurrencies such as Bitcoin.

Generally speaking, you must take a look at Bitcoin regulations imposed by the country that you are located in. Even in places where Bitcoin is lawful, there are still some laws and regulations that restrict cryptocurrencies in one way or another. Taxation regulations are the section in which many people are prone to experience difficulty. For taxation functions, Bitcoins and other cryptocurrencies are generally regarded as an asset instead of a currency. Cryptocurrencies such as Bitcoin and other altcoins are usually not viewed as a legal tender by most governments.

2. Is cryptocurrency legal in Singapore?


Cryptocurrency is legal in Singapore. The city-state did not impose sanctions or restrictions against cryptocurrency as some neighbouring countries did. Additionally, cryptocurrency exchanges are also licensed, without requiring exchanges to register. As such you can participate in cryptocurrency trade in Singapore through any cryptocurrency exchanges.

The Monetary Authority of Singapore (MAS) is also lenient when it comes to cryptocurrency regulations, implementing prevailing laws and regulations as long as it is allowed. The MAS released a statement that warns the public regarding the risks of trading in cryptocurrency back in January 2018. Additionally, MAS FinTech chief Sopnendu Mohanty pointed out that additional legal actions will be required to ensure that cryptocurrencies keep their growth. 

The Fintech chief is also concerned about the potential use of cryptocurrency for illegal activities, such as funding terrorists, money laundering, and other related activities.

Tharman Shanmugaratnam, the Deputy Prime Minister of Singapore also mentioned back in January 2018 that cryptocurrencies fall under Singapore’s Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) regulations, which also covers fiat currencies.

3. The future of cryptocurrency in Singapore


MAS is continuously on the lookout for cryptocurrencies and cryptocurrency exchanges operating in Singapore. Along with possible extra AML/CFT regulations, it was also announced that MAS is also doing work on stricter cryptocurrency rules, mainly to protect crypto investors. With these developments, we can safely say that the future of cryptocurrency in Singapore is somewhat secure, although we can expect stricter and more stringent regulations to come.



As pointed out in this article many times, cryptocurrency has a lot of uses. It can be used to pay, and it can be used to accept payment. It is also a perfect investment machine, guaranteed to make you money as long as you spend time analyzing the market and trading cryptocurrencies diligently. Cryptocurrency has a very bright future in Singapore, and as such, you should not be scared of.

If you want to take out a loan to invest in cryptocurrency, or you just want to use it to pay for your shopping and services, check out Raffles Credit, a licensed money lender in Singapore. They provide personal loans with competitive interest rates, flexible loan tenure, and a quick application process. Visit their website by clicking on this link, or contact them via telephone at 6235 1788.