Bitcoin
Bitcoin
Bitcoin is the largest and world’s first digital currency launched back in 2009 by the entity, Satoshi Nakamoto. Being a digital currency, a defining feature of Bitcoin is that it functions without a central bank or single administrator. Rather, Bitcoin instead can be sent by peer-to-peer (P2P) networking, which is itself absent of any intermediaries.Instead of being a physical currency, Bitcoins represent pieces of digital code that can be sent and received across a kind of distributed ledger network called a blockchain. As Bitcoins are not issued or backed by any governments or central banks, it is considered to be legal tender. Transactions on the Bitcoin network are confirmed by a network of computers (or nodes) that solve a series of complex equations. This process is called Bitcoin mining. In exchange for Bitcoin mining, computers receive rewards in the form of new Bitcoins. Over time, mining grows increasingly difficult, leading subsequent rewards to become smaller and smaller. Given the structure of code, there will only ever be 21 million Bitcoins in existence. However, as of 2020, there were already 18.3 million Bitcoins in circulation. Bitcoin Making HistorySince its launch back in 2009, Bitcoin has remained the most popular and largest cryptocurrency in terms of market cap in the world. Its popularity has also contributed significantly to the release of thousands of other cryptocurrencies, that are now known as altcoins. At its inception, the crypto market was originally hegemonic, though presently the landscape contains countless altcoins.Bitcoin has also been controversial since its original launch. It has been heavily criticized for its use in illegal transactions and money laundering given its decentralized nature.As Bitcoin is impossible to trace, this makes the cryptocurrency an ideal target for illicit behavior. Critics also point to its high electricity consumption for mining, rampant price volatility, and thefts from exchanges. Bitcoin has been seen by some as a speculative bubble given its lack of oversight.
Bitcoin is the largest and world’s first digital currency launched back in 2009 by the entity, Satoshi Nakamoto. Being a digital currency, a defining feature of Bitcoin is that it functions without a central bank or single administrator. Rather, Bitcoin instead can be sent by peer-to-peer (P2P) networking, which is itself absent of any intermediaries.Instead of being a physical currency, Bitcoins represent pieces of digital code that can be sent and received across a kind of distributed ledger network called a blockchain. As Bitcoins are not issued or backed by any governments or central banks, it is considered to be legal tender. Transactions on the Bitcoin network are confirmed by a network of computers (or nodes) that solve a series of complex equations. This process is called Bitcoin mining. In exchange for Bitcoin mining, computers receive rewards in the form of new Bitcoins. Over time, mining grows increasingly difficult, leading subsequent rewards to become smaller and smaller. Given the structure of code, there will only ever be 21 million Bitcoins in existence. However, as of 2020, there were already 18.3 million Bitcoins in circulation. Bitcoin Making HistorySince its launch back in 2009, Bitcoin has remained the most popular and largest cryptocurrency in terms of market cap in the world. Its popularity has also contributed significantly to the release of thousands of other cryptocurrencies, that are now known as altcoins. At its inception, the crypto market was originally hegemonic, though presently the landscape contains countless altcoins.Bitcoin has also been controversial since its original launch. It has been heavily criticized for its use in illegal transactions and money laundering given its decentralized nature.As Bitcoin is impossible to trace, this makes the cryptocurrency an ideal target for illicit behavior. Critics also point to its high electricity consumption for mining, rampant price volatility, and thefts from exchanges. Bitcoin has been seen by some as a speculative bubble given its lack of oversight.
Read this Term Ethereum
Ethereum
Ethereum is a decentralized, open source, blockchain-based distributed computing platform and operating system. A defining feature of Ethereum is its smart contract functionality, making it extremely popular.Ethereum dates back to 2014 and has since grown in popularity to stand as the second largest cryptocurrency by market cap.As a decentralized cryptocurrency network and software platform, Ethereum represents the most important and widely circulated altcoin. Of note, Ethereum also facilitates the use of Distributed Applications, or dapps. Ethereum possesses its own unique programming language, known as Turing Complete, which is used to build the dapps. Dapps in turn can be run on a peer-to-peer (P2P) network of virtual machines. These can be just about anything and are optimized to run on Smart Contracts, which are pieces of code that can execute a predetermined set of actions once a certain set of criteria are met. The Ethereum network’s native currency is called Ether, or ETH. ETH tokens can be used to pay for things inside of dapps or to receive payouts from smart contracts. They can also be traded off of the Ethereum network inside of cryptocurrency exchanges or OTC trading platforms. The Rise of EthereumEthereum dates back to 2013 when crypto researcher and programmer Vitalik Buterin proposed its utility. Its early development was subsequently funded by an online crowdsale, which took place in 2014.Ethereum ultimately went in July 2015 with 72 million coins minted. This accounted for roughly 65 percent of its total circulating supply at the time of writing.Like other cryptocurrencies, Ethereum has had a complicated past, resulting in splits and some controversy.For example, back in 2016, an exploited vulnerability in The DAO project's smart contract software caused the theft of $50 million worth of Ether.This led Ethereum to split into two separate blockchains. A newer and separate version became known as Ethereum (ETH), while the original chain continued to be known as Ethereum Classic (ETC).
Ethereum is a decentralized, open source, blockchain-based distributed computing platform and operating system. A defining feature of Ethereum is its smart contract functionality, making it extremely popular.Ethereum dates back to 2014 and has since grown in popularity to stand as the second largest cryptocurrency by market cap.As a decentralized cryptocurrency network and software platform, Ethereum represents the most important and widely circulated altcoin. Of note, Ethereum also facilitates the use of Distributed Applications, or dapps. Ethereum possesses its own unique programming language, known as Turing Complete, which is used to build the dapps. Dapps in turn can be run on a peer-to-peer (P2P) network of virtual machines. These can be just about anything and are optimized to run on Smart Contracts, which are pieces of code that can execute a predetermined set of actions once a certain set of criteria are met. The Ethereum network’s native currency is called Ether, or ETH. ETH tokens can be used to pay for things inside of dapps or to receive payouts from smart contracts. They can also be traded off of the Ethereum network inside of cryptocurrency exchanges or OTC trading platforms. The Rise of EthereumEthereum dates back to 2013 when crypto researcher and programmer Vitalik Buterin proposed its utility. Its early development was subsequently funded by an online crowdsale, which took place in 2014.Ethereum ultimately went in July 2015 with 72 million coins minted. This accounted for roughly 65 percent of its total circulating supply at the time of writing.Like other cryptocurrencies, Ethereum has had a complicated past, resulting in splits and some controversy.For example, back in 2016, an exploited vulnerability in The DAO project's smart contract software caused the theft of $50 million worth of Ether.This led Ethereum to split into two separate blockchains. A newer and separate version became known as Ethereum (ETH), while the original chain continued to be known as Ethereum Classic (ETC).
Read this Term
Total cryptocurrency market capitalisation, according to CoinMarketCap, declined 2% overnight to $898bn.
The Cryptocurrency Fear and Greed Index was down 1 point to 18 by Wednesday and remains in a state of “extreme fear”.
The dynamics of bitcoin and the Dollar in the coming days could be a prologue to the crypto market behaviour in the coming weeks. On the one hand, it is tough to be bullish on cryptocurrencies in an environment of a sharply strengthening dollar and a sell-off in risk. A rising dollar and an aggressive Fed are significant current obstacles to buying cryptocurrencies.
BTC chart: FxPro analysis
On the other hand, Bitcoin is historically relatively cheap, attracting the interest of long-term buyers. However, it is still tricky for anything more than the formation of a bottom. It will probably take months before a rally, as we saw in 2020, starts.
BTC could fall another 20-40% by the end of the summer, according to Cane Island Alternative Advisors. The US economy is entering a recessionary phase, and capital will leave risky assets accordingly.
The massive fall in cryptocurrency has led to the flight of “market tourists” and margin traders. Only the most committed enthusiasts remain, according to Glassnode. Meanwhile, HODLers continue to accumulate bitcoins.
According to The Telegraph, electric car maker Tesla suffered a loss of $440 million due to the bitcoin collapse. The company invested $1.5 billion in bitcoin in early 2021.
According to Charles Erith, CEO of investment firm ByteTree, bitcoin and gold are the best insurance against economic shocks during inflation.
The European Central Bank (ECB) has demanded that EU countries comply with uniform standards when drafting national laws to regulate the cryptocurrency industry.
This article was written by FxPro ’s Senior Market Analyst Alex Kuptsikevich.
