Cryptocurrency has evolved from a niche digital experiment into a global financial phenomenon. With increasing adoption and technological innovation, more people are exploring how to buy, trade, and use digital assets. Whether you're interested in investing, sending money across borders, or exploring new digital economies like NFTs and decentralized apps, choosing the right platform is crucial.
This guide breaks down the fundamentals of cryptocurrency, explains key technologies like blockchain, and helps you understand how to get started safely and efficiently—especially if you're new to the space.
Understanding the Basics of Cryptocurrency
Before diving into exchanges, it’s important to understand what cryptocurrency really is—and how it differs from other digital payment methods.
Cryptocurrency vs. Digital Payment Systems
A common misconception is that cryptocurrency is the same as digital wallets like Suica or Rakuten Edy. While both exist in digital form, they operate very differently.
Digital payment systems are centralized: a company issues and controls the value, which remains stable and isn’t meant to be invested in. You can’t transfer these balances directly between individuals outside the system, and they generally can’t be converted back into cash.
Cryptocurrencies like Bitcoin and Ethereum, on the other hand, are decentralized. There’s no single authority controlling them. Their value fluctuates based on market demand, and they can be sent peer-to-peer without intermediaries. They’re also fully convertible into fiat currency and can be used for investment, international transfers, or purchasing goods and services.
👉 Discover how to start trading crypto with low fees and high security today.
The Technology Behind Cryptocurrency: Blockchain Explained
At the heart of every cryptocurrency lies blockchain technology—a revolutionary system for recording transactions.
Think of a blockchain as a digital ledger that stores transaction data in blocks, each linked to the previous one using cryptography. This creates an unbreakable chain of records that is nearly impossible to alter.
Because this ledger is distributed across thousands of computers worldwide, there’s no need for a central authority like a bank. Every participant in the network holds a copy of the ledger, ensuring transparency and resistance to fraud or system failure.
This technology is also known as distributed ledger technology (DLT) and is being explored beyond finance—in areas like supply chain management, voting systems, and intellectual property protection.
Blockchain enables trustless transactions: two parties can exchange value without needing to know or trust each other, thanks to cryptographic verification and consensus mechanisms.
What Is Bitcoin? The Pioneer of Digital Currency
Launched in 2009 by an anonymous figure known as Satoshi Nakamoto, Bitcoin was the first successful implementation of blockchain technology. It introduced a new kind of money—one not controlled by governments or banks.
Key features of Bitcoin include:
- A fixed supply cap of 21 million coins, designed to prevent inflation.
- Operation on a peer-to-peer network, allowing direct transfers between users.
- Global accessibility—anyone with internet access can send or receive Bitcoin.
- High market dominance, maintaining the largest market capitalization among all cryptocurrencies (approximately $280 billion as of 2025).
Bitcoin is often referred to as "digital gold" due to its scarcity and store-of-value properties. While originally envisioned as a payment method, it has primarily become a long-term investment asset.
Its success paved the way for thousands of alternative cryptocurrencies (altcoins), each offering unique functionalities—from faster transactions to smart contract capabilities.
Practical Uses of Cryptocurrency Beyond Investment
While many people buy crypto for investment purposes, its utility extends far beyond price speculation.
Fast and Low-Cost International Transfers
Traditional cross-border bank transfers can take days and involve high fees. Cryptocurrencies enable near-instantaneous global transfers at a fraction of the cost, making them ideal for remittances or international business payments.
Merchant Payments
Since Japan’s 2017 Payment Services Act amendment recognized cryptocurrency as legal tender for payments, major retailers like Bic Camera now accept digital currencies. For merchants, crypto payments reduce processing fees—often to just 20% of credit card transaction costs—and offer immediate settlement.
For consumers, it means greater flexibility when shopping online globally, without worrying about foreign exchange fees.
Access to Financial Services in Underserved Regions
In developing countries where banking infrastructure is limited, cryptocurrency provides a powerful alternative. As long as someone has internet access, they can store value, send money, and participate in the global economy—bypassing traditional financial gateways entirely.
Emerging Applications: NFTs and Decentralized Platforms
One of the most exciting developments in crypto is the rise of NFTs (Non-Fungible Tokens).
NFTs represent ownership of unique digital items—such as artwork, music, virtual real estate in metaverse platforms, or in-game assets. These tokens are typically built on blockchains like Ethereum and require cryptocurrency for purchase and trading.
When you buy an NFT, the transaction is automatically recorded on the blockchain, proving authenticity and ownership. This opens up new possibilities for creators to monetize digital content and for collectors to invest in digital scarcity.
Similarly, decentralized applications (DApps) run on blockchain networks and use cryptocurrencies for functionality—like paying gas fees, accessing services, or earning rewards through participation.
👉 Explore platforms where you can trade NFTs and participate in decentralized finance ecosystems.
Types of Cryptocurrencies: From Currency to Utility
Not all cryptocurrencies serve the same purpose. Here are the main categories:
1. Payment-Focused Cryptocurrencies
Designed primarily for transferring value—Bitcoin and Litecoin fall into this group.
2. Platform Cryptocurrencies
These support decentralized applications and smart contracts. Ethereum is the most prominent example, enabling developers to build DApps and issue new tokens.
3. Utility Tokens
Used within specific platforms to access services or features—like paying for cloud storage or subscription benefits.
4. Meme Coins
Inspired by internet culture and humor (e.g., Dogecoin), these tokens often gain traction through community enthusiasm rather than technical utility—but some have evolved into active ecosystems.
How to Choose a Cryptocurrency Exchange
Selecting a reliable exchange is one of the most important steps for beginners. Consider these four key criteria:
1. Trading Volume
Higher trading volume means better liquidity—your orders are filled faster at desired prices.
2. Security & Company Reputation
Ensure the exchange uses strong security measures like cold storage, two-factor authentication (2FA), and has a proven track record of protecting user funds.
3. Low Transaction Fees
Compare fee structures across platforms. Even small differences can impact long-term returns.
4. Number of Supported Altcoins
If you plan to explore beyond Bitcoin, choose an exchange with a wide selection of altcoins.
Best Bank for Crypto Transactions: Sumitomo Mitsui Trust SBI Net Bank
For Japanese users, Sumitomo Mitsui Trust SBI Net Bank stands out as the most crypto-friendly bank.
It partners with major domestic exchanges including:
- bitFlyer
- Coincheck
- GMO Coin
- bitbank
- BITPOINT
- Zaif
- SBI VC Trade
Advantages include:
- 24/7 JPY deposits, even on weekends and holidays
- Funds reflected within ~10 minutes
- Free deposit fees when transferring to supported exchanges
By opening an account with both SBI Net Bank and your chosen exchange, you streamline your ability to move funds quickly and efficiently—a major advantage in volatile markets.
Frequently Asked Questions (FAQ)
Q: Is cryptocurrency legal in Japan?
A: Yes. Japan recognizes cryptocurrency as legal property and regulates exchanges under the Payment Services Act. Trading is legal and taxed accordingly.
Q: Can I lose money investing in crypto?
A: Absolutely. Prices are highly volatile. Only invest what you can afford to lose, and consider diversifying your portfolio.
Q: Do I need a bank account to buy crypto?
A: In Japan, most regulated exchanges require JPY deposits via bank transfer. Having a compatible bank like SBI Net Bank makes onboarding much smoother.
Q: How do I keep my crypto safe?
A: Use exchanges with strong security practices. For long-term holdings, consider transferring assets to a private wallet (hardware or software) under your control.
Q: Are there taxes on crypto gains?
A: Yes. Profits from crypto trading are considered miscellaneous income and subject to taxation in Japan.
👉 Start your secure crypto journey with a trusted global exchange platform.
Final Thoughts
Cryptocurrency is reshaping how we think about money, ownership, and financial access. From Bitcoin’s disruptive entry to today’s vibrant ecosystem of DeFi, NFTs, and smart contracts, the space continues to evolve rapidly.
For beginners, starting with a reputable exchange, understanding core concepts like blockchain, and pairing your account with a convenient bank like SBI Net Bank can set you on a solid path forward.
Stay informed, prioritize security, and explore opportunities wisely—the future of finance is digital.