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Writer: Eveline Stella Budiman | Illustrator: Ariyani Nuraini | Editor: Athaya Hardono | Photographer: Andrew Arield Darwin

Let's face it — it is now almost impossible for us to scroll through our Instagram stories without at least seeing someone making a post on their recent stock market trades. A lot of people are hooked on crypto nowadays. Your friends are doing it, your parents are doing it, your neighbors are doing it, and maybe even you have your own crypto wallet stashed within your smartphone. While the number of people jumping on the crypto bandwagon keeps on growing, some of us here may not even know what cryptocurrency really IS. Worry not! In this article, we are going to learn more about the crypto-hype through the eyes of our fellow APM and APS friends: Reinardus Darren (APS) and Yasha Athalladhira Irawan (APM).

Based on what you know, what is cryptocurrency?

  • Darren: "As far as I know, it is a digital currency that we can use to buy stuff — just like how it is with money."

  • Yasha: "To my understanding, a cryptocurrency is a form of digital payment that can be traded for profit."

Yes, our friends here got it all right! Much like money, cryptocurrency can be used to purchase goods and services — though they do not exist in physical form. Not only can it be used to buy things, but crypto can also be traded as a commodity. Each cryptocurrency works through a technology called blockchain, which is a decentralized technology that is spread across many computers that manage and record transactions.

How many cryptocurrencies do you know of?

  • Darren: "I honestly don't know much about the types of cryptocurrency, but I do know of Bitcoin and a little bit of Dogecoin as I read some of Elon Musk's tweets!"

  • Yasha: "I know for a fact that there are many types of cryptocurrencies out there, but I am only familiar with two: Bitcoin and Dogecoin. These two are the most popular ones, I think. Whenever people mention the word 'crypto' on social media, it automatically opens discussions/threads related to the two coins.

While it is impossible for us to list down each and every single type of cryptocurrency that the world has come to know of, we know for sure that Bitcoin is indeed the most popular cryptocurrency out there. But what about Dogecoin? Dogecoin is considered as an Alternative Cryptocurrency Coins (Altcoin). The term 'Altcoin' itself actually means 'Alternative to Bitcoin'. While these coins share similar characteristics with the famous Bitcoin, they distinguish themselves by offering cheaper and faster transactions.

How do you think people buy cryptocurrencies?

  • Darren: "Through a digital wallet ...?"

  • Yasha: "I think the mechanism is similar to buying stocks/bonds where you need to have a digital wallet in order to make a transaction.

To buy cryptocurrencies, you will need an online 'wallet' where you can store all of your currencies. You will need to create an account on an exchange, and then you can do occasional top-ups via bank transfer into your 'wallet' to buy your desired cryptocurrencies.

Do you think cryptocurrency is legal?

  • Darren: "From what I know, any activity that is related to crypto is still heavily regulated in Indonesia."

  • Yasha: "I know for a fact that in Indonesia, cryptocurrency cannot be used as a means of payment. Nevertheless, I think it has been considered as a legal payment method in most developed countries."

These statements are very true! Countries like the USA and Japan have officially considered Bitcoin and other cryptocurrencies as a valid form of payment method, while in some other emerging markets, the legality of cryptocurrency still varies dramatically. Let's take Indonesia as an example. Taken as a whole, any activity in regards to cryptocurrency in Indonesia is heavily regulated by Indonesia's Commodity Futures Trading Regulatory Agency (Badan Pengawas Perdagangan Berjangka Komoditi — "BAPPEBTI"). While cryptocurrency is legally recognized as a trading commodity, the country still bans the use of cryptocurrencies, including bitcoin, as a means of payment. In all, the legal status of cryptocurrency still varies within countries.

Do you think cryptocurrency is a good investment?

  • Darren: "Honestly, I still prefer to invest in conventional stocks rather than crypto, as investing in cryptocurrencies is way too risky for my liking."

  • Yasha: "Yes, and no. If you are an aggressive investor looking for a high risk - high return, then yes, you should definitely go for it. But if you just want to hop on the trend and don’t really know a lot about the field, then don’t! Cryptocurrency is very volatile, so I think it is better to kick-off your investment portfolio with an easier product first, such as mutual funds."

We have to agree on the part where Darren and Yasha said that investing or trading in cryptocurrencies is risky. While it is very possible for you to become filthy rich by investing in cryptocurrencies, it is also very much possible for you to lose all of your money. Yes, investing in stocks also has its own set of risks, but bear in mind that cryptocurrencies are still incredibly volatile. Throughout its history, the value of cryptocurrencies have been driven primarily by traders' speculative interest. To add to that, unlike stock exchanges, cryptocurrencies do not have governments or regulatory bodies governing their activities. This further makes it an incredibly risky investment should the market suddenly decide that it is no longer valuable. Crypto is also a relatively new phenomenon, so while it could be the next big thing, it could just as easily flop. For that reason, make sure that you have a high tolerance for risk before you dive into the world of cryptocurrencies and DO. YOUR. RESEARCH!

Why do you think cryptocurrency is so popular nowadays?

  • Darren: "I have witnessed a couple of my friends (and lots of Indonesian influencers) jumping on to the crypto trend during the pandemic. Since people are forced to stay indoors most of the time nowadays, they resort to learning something new — it can be something as trivial as painting, cooking, and in this case, trading cryptocurrency. Also, I think trading crypto enables people to generate profit even when they are in the safe confines of their homes."

  • Yasha: "Lots of my friends and relatives told me that trading crypto generates more profit rather than investing in stocks. My cousin, for example, has already profited Rp. 40 million out of his Bitcoin investment. They said investing in crypto is apparently way easier too because you don’t need to calculate EPS, PBV, and all that — crypto is all about speculation! Furthermore, I think it is really popular because lots of people see crypto as ‘the currency of the future’ now more than ever."

Are you interested in investing in crypto?

  • Darren: "For now, no, not really. I need to learn more about the field and gather up enough courage to actually start investing in crypto."

  • Yasha: "I am, but not in the near future. I haven’t really grasped the idea of cryptocurrency just yet. I am a study-the-product-first kind of person, rather than study-while-doing because I don’t want to put my money into something that I don’t really understand. Maybe once Indonesia legalizes crypto as a medium of exchange, and once I quite get the hang of investing and trading, I will then consider it."

There is so much more to the world of cryptocurrency than the things we have covered in this article. If you are interested in trading or investing in crypto, do your research, make sure that you understand all the risks you will be facing, and only invest the money you can afford to lose!


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