The Bitcoin has become a major buzzword around the world. When it first became into existence in January 2009, its price was nearly at zero. In February 2010, the value of one Bitcoin became one dollar as it took parity with the US dollar. After much fluctuation, it shot up to $1,290 per unit on Mar. 2, 2017. Since then, it has been rising rapidly, reaching $6180 on Oct. 21, 2017. Over the January 2009 to October 2017 period, the price of the Bitcoin has increased by more than 6,000 times.
   In this situation many people may be tempted to invest in the Bitcoin but foreign investors cannot come to Korea for Bitcoin investment. According to Korea’s Foreign Investment Promotion Act, the means of payment for investment in Korea are confined to foreign currencies, capital goods, industrial property rights and real estate, among others.
   It is useful to distinguish among virtual currency, digital currency and cryptocurrency. Virtual currency is a type of unregulated, digital money which is issued and usually controlled by its creators and accepted among the members of a specific virtual community. Digital currency is a form of virtual currency that is electronically created and stored. Some types of digital currencies are

cryptocurrencies, but not all of them are. A cryptocurrency is a subset of digital currencies that uses cryptography for security so that it is extremely difficult to counterfeit.
   Bitcoin is a cryptocurrency—a digital asset designed to work as a medium of exchange that uses cryptography to control its creation and management, rather than relying on central authorities. Besides Bitcoin, there are other cryptocurrencies and their market capitalization shares are 20 percent for Ethereum, 7.5 percent for Ripple and 2.4 percent for Litecoin. Among these, the Bitcoin takes the lion’s share with 40 percent.
   Regarding the skyrocketing price of Bitcoins, the central authorities are concerned about an increasing probability of speculative bubbles, thereby putting a lot of ordinary investors in a deep trouble. Many commercial banks like UBS say that a sharp rise in cryptocurrency valuations will lead to a speculative bubble and cryptocurrencies are unlikely to become mainstream currency.
   By contrast, speculators are very interested in capturing high profits. There are key differences between investment and speculation. Investors expect profit from the change in the value of the asset, whereas speculators expect profit from the change in the price due to changes in demand and supply. If the speculative demand falls sharply, the price bubble bursts.
   Investors tend to keep the asset for a longer time period, whereas speculators hold assets for a short term. An investor expects a modest rate of return, whereas a speculator expects higher profits. Becoming an investor or speculator depends on the investor’s attitude toward risk. There are three types of investors—risk loving, risk averting and risk neutral. So an investor with a risk-loving attitude is likely to be a speculator.