Movement of cryptocurrencies in the market

Movement of cryptocurrencies in the market

Previous blockchain blogpost

The blockchain is the system behind cryptocurrencies. A basic grasp of how it works will prove to be sufficient for now. But in the future, this knowledge would hardly be enough. The question is how to start, and the answer is first to have an understanding of the fundamentals of blockchain. With the growth of the industry, it is possible to reach mass adoption. Even if it fails, Blockchain is here to stay and is a big game changer.

According to the white paper that launched cryptocurrency in 2009 under a pseudonym, it is a digital payment maintained by a network of computers on the Internet that uses cryptography to authenticate transactions. Cryptocurrency has seen a spike in all of its metrics such as search traffic, the number of press pieces, amount of sales and, most importantly, prices. The search traffic levels have tripled since 2017, and the keyword is near all-time highs for traffic. A glance at Google Trends for Ether, Bitcoin, and cryptocurrency indicates that there is a high correlation between price and traffic and all areas have had steady growth in traffic. Therefore, it is highly recommended always to keep an eye on the number of transactions and search traffic, because these metrics tell an underlying story about them.

Cryptocurrency networks will reach a large enough size at a certain point to run efficiently and be too big to failMoney market displacement

Cryptocurrency networks will reach a large enough size at a certain point to run efficiently and be too big to fail. The fervent believers of cryptocurrency say it could displace traditional money and even banks, but it is only worth the price someone is willing to pay for it, making it prey to significant changes in sentiments. Perhaps a look into the ownership of all cryptocurrencies and their dynamics might give a clue of that.

Ownership of cryptocurrencies

Bitcoin has the least ownership concentration among the cryptocurrencies. The top 100 Bitcoin holders control only 17.3% of the total supply, whereas, with Ether, the top 100 investors control 40% of all the issued currency. With coins such as Gnosis, Storj, and Qtum, large owners control 90%, and they are all part of the teams managing these projects. Industry watchers estimate that perhaps about 1,000 users hold 40% of Bitcoin. Since the viability of cryptocurrencies rests on their network size, Bitcoin is worth four times that of American Airlines and twice as much as Uber. People who hold large amounts of Bitcoin are known as whales in the industry. The whales stuck by Bitcoin through the pioneering days when it was derided and have known one another for years.

Trade of cryptocurrency

One of the paradoxes of cryptocurrency is that each new development appears to bring both promise and peril. The whales will not sell their holdings because they believe in its long-term potential. But as times change and prices go up, such linear thinking and calculation might change. Therefore investors worry about whales because if they sell just a portion of the holding, that can send the prices plummeting.

For example, Bloomberg noted that when someone moved Bitcoins worth about $159 million to an online exchange, Bitcoin traders started mulling over whether it meant the owner was selling the digital currency. At current prices, if each sells about half of their holdings, they can potentially prop up or tank the market. Moreover, many of the trading rules in this emerging industry are murky because regulators have been too slow to catch up. For now, Bitcoin and many currencies enjoy free trade while a few others have severe restrictions in place.

Unrestricted currency trade

There is no restriction against a deal in which a team agrees to purchase Bitcoin. If this transaction increases the price, they may cash out within hours. Such a sale is permitted because Bitcoin is not a security but a digital currency. At least some kind of fact sharing is legal, according to securities lawyers who monitor the cryptocurrency scenario. What’s more, many of the large owners can coordinate or preview their moves to a select few. Discussions of trading with one another among big traders of some cryptocurrencies are not illegal either.

Tracking biggest investors

Some hedge fund managers in the cryptocurrency industry do monitor trading activity of the most prominent investors. When they see movement, they call the likely sellers and get information on motivations behind their trading plans and sales. Some funds end up buying the holdings directly instead of going into the open market. And when they do that, the currency’s price does not get affected in any drastic way. This kind of gathering intelligence is legal, and the trading based on that is allowed.

Ordinary small investors

The downside is that it puts small buyers of digital currencies at a disadvantage. Ordinary investors do not have the standing required to get the whales to take their calls. They are also disadvantaged if they hold smaller digital tokens and currencies. They can only monitor addresses with vast holdings and begin heated discussions of market moves on online forums. But at the end of the day, ultimately they are in the dark on the plans and motives of large investors.

Restricted currency trade

According to the Securities and Exchange Commission of America, depending on how investors expect to make money and how they are structured, some digital currencies may count as securities. If traders of these currencies prop up the price and go online to spread gossips, that might count as fraud. A digital currency exchange named Bittrex once had to warn its users that it would terminate their accounts if they banded together into groups with the intention of manipulating prices.

The value of cryptocurrency has shot up nearly twelvefold since it’s beginning and its sale is in full swing now

The value of cryptocurrency has shot up twelvefold since it’s beginning

Entrance of investors

The value of cryptocurrency has shot up nearly twelvefold since it’s beginning and its sale is in full swing now. Hence the stock market and investors are bullish about cryptocurrency, even though it has had a shaky start. The recent increase in its price is difficult to explain because it has no intrinsic value. Some argue that this is no different than what is happening in more established markets. 

Bubbles

Bubbles

Bubble or reality

Currently, Bitcoin has a market capitalization of approximately $100 billion. With all of this attention to cryptocurrencies, many are wondering whether this is a bubble. It can be hard if not impossible to determine if a bubble exists in the crypto industry and when it might burst. However, the widespread and general belief is that it is not going to crash very soon. The only way to ensure that they avoid a burst is to transition into mass adoption. The current business environment does indicate mass adoption as the likely result.

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A war is over the future of Bitcoin, the first digital currency, and is already showing strain. Two of the biggest among the competitors of Bitcoin is Darkcoin and Ethereum. Many of the currencies younger then Bitcoin can be used for much more versatile purposes. Hence Bitcoin faces a threat from more nimble competitors. Digital currencies will drive new company model innovation at unprecedented levels. This revolution could be either a bubble or the onset of a financial realignment.

Mechanism of blockchain technology behind cryptocurrencies

Mechanism of blockchain technology behind cryptocurrencies

Previous blockchain blogpost:

In the real estate blockchain enables to store authentic online documents, draw digital smart contracts, and keeps the identities of the parties anonymous. While all sounds great, for everything to work seamlessly, it still needs a lot of things. As traders and investors have bid up Bitcoin’s price higher and higher, the Securities and Exchange Commission has suspended trading of some firms. Investors need to be cautious and not chase small companies that are trying to ride the wave.

These days Bitcoin, the most famous and the most substantial cryptocurrency, is always in the news. The technique called Blockchain, which is a database at its heart, serves as its public ledger. The blockchain technology sits on different devices and servers around the world. The blockchain is the operational system behind not only Bitcoin but also other cryptocurrencies. For example, Ethereum, the second-most famous cryptocurrency after Bitcoin, runs on a unique protocol using blockchain. Ethereum not only does currency but also allows programs and platforms to run on top. Firms such as ConsenSys has partnered with Microsoft to work on Ethereum applications. As the organizations that utilize it increases, blockchain technology will be ubiquitous.

Company applications abound

Blockchain

Blockchain

The potential applications of blockchain in any field or industry abound because it is ideal for currency. To cash in on this trend, startups in this realm have swollen dramatically in just a few months. Some firms have even boosted their assets and sales by professing links to the blockchain. Banks across the globe are making inquiries as to how to start their blockchains. There will be many marketing companies that would operate entirely on this technology and sell products through blockchain.

Fundamentals of blockchain

Blockchain

Blockchain

There may not be a need for every company in the world to focus on such bleeding edge technologies as blockchain. However, those who are appealing to younger and early adopters should be learning about blockchain. A basic grasp of how important it is and how it works will prove to be sufficient for now. In the future, this knowledge would hardly be enough, as the technology will be recording all digital information. The bigger question is how to start, and the answer is first to have a better understanding of the fundamentals of the blockchain.

Mechanism of transactions

The term transaction could be misleading as people think of it as exchanging currency between users. But in this context, it means a piece of information recorded by a miner to the blockchain. Miners are users with equipment and software to verify transactions or to build them into blocks.

Type of transactions

Most transactions are financial right now, for example, a Bitcoin tip to a musician from a fan. However, it could also include data, or a song upload, or a message that can be digitized. Other non-financial transactions and smart contracts such as keeping track of music license payouts, recording marriages, or issuing birth certificatescan also run on the blockchain.

Ten minutes transactions

All the recent operations in the past ten minutes are written to a new block and, like a chain, linked back to the old one. It is close to impossible to change anything because of the transaction’s duplicate nature. Also, it is a secure system as they are time stamped, encrypted, and verified by multiple users.

Hash links blocks

The mathematical procedure of assigning a value to complex data is known as a hash. A simple instance and a practical one would be numbering a list of names or places. Hashing is the process that links blocks together, and a faster miner completes more hashes per second. The system incentivizes these actions, which means whoever finishes the task first is entitled to a prize.

Inevitable mass adoption

While public awareness is a bit harder to track, cryptocurrency has quickly gone from a niche term to a common financial phrase. Every day, new press items inform people about how they can partake in this invention. An advantage of the daily media coverage is public awareness and education about what blockchain is, how they should evaluate cryptocurrency and what it can do. Only education and outreach can train people to look for possibilities in the industry because this is a new frontier in which many people find weaknesses.

Blockchain

Blockchain

As people become more comfortable and familiar with the crypto industry, their odds of participating increase. The good news is that the general understanding is rising rapidly, and there has been a shift in society in the recent past. With the growth of the industry, it is possible to establish the model for cryptocurrency and to reach the milestone of mass adoption. Some poignant trends and entrepreneurial practices are already pointing in this direction.

Launch new cryptocurrencies

There have been some initial coin offerings, which launch new cryptocurrencies. They have also ushered in a trendy wave of features and structures for the networks. These new offerings are more consumer-friendly than all other earlier adaptations. Whether this transition is for more specific functionality network or merely trying to set it up for optimal user experience, it is necessary for mass-market. For now, the coin offering market is surging and is the next significant chapter that is being embraced even by traditional investors.

Decentralised gaming ecosystem

The Game Protocol is a promising and upcoming initial coin offering for a decentralized gaming ecosystem. It is a platform for developers to create and advertise games on the blockchain. It will also provide developers with the necessary tools to distribute their work while allowing game creators to raise funds to implement them. This process eliminates the biases within other fundraising platforms and centralized marketplaces.

Digital blockchain purse

An upcoming initial coin offering is the Divi Project that is aiming to build an intuitive smart wallet and is also tackling the issue of gender-divide prevalent within the crypto industry. Sadly, women currently make up only 5-7% of the total cryptosystem users in the world. Divi is changing this by creating an ecosystem that is appealing to women. Their innovations would allow the average person who has no familiarity with code or technology to enter this space confidently.

Interconnected blockchain applications

Bitcoin may be the money of the Internet, but its successors will build interconnected blockchains running countless applications. Building bonds between blockchains would enable users to flow smoothly from Dash to Bitcoin to Zcash to Ethereum, strengthening the entire ecosystem.It is a revolutionary concept because it provides a system of data transmission and independent verification that does not rely on financial institutions or government. Even if it eventually fails, Blockchain, the technology behind it, is here to stay and could very well change the Internet.

Coming up next:

Cryptocurrency is a digital payment. A network of computers that uses cryptography to authenticate transactions maintains it. Depending on how investors expect to make money and how they are structured, some cryptocurrencies may count as securities. If traders of these currencies prop up the price and go online to spread gossips, that might count as fraud. It can be hard to determine if a bubble exists. The only way to ensure that they avoid a burst is mass adoption.

Creation of value through blockchain technology

Creation of value through blockchain technology

Previous blockchain blogpost:

We are experiencing a significant shift in the real estate industry, as more and more people are engaging in property transactions using Bitcoin. Many industry experts are excited about the potential for digital money and the blockchain technology when it comes to real estate. But although digital currency transaction is the future, industry insiders say that we are not quite there as yet. Digital money analysts are less convinced that the property market would more widely adopt the cryptocurrency.

Creation of value through blockchain technology

The blockchain is the culmination of all the platforms such as Napster, Skype, and BitTorrent that operate on peer-to-peer networks. It is the infrastructure of the digital currency and is described as an open, shared, and distributed ledger. A process known as cryptography creates digital currencies and additional units of them. It also verifies the transfer of assets and secures the cryptocurrency transactions in the blockchain.

Global peer network

The blockchain is a network that verifies every transaction, which then becomes a new block of data. Blocks are nothing but lists of linked records that keep growing continuously. When this data gets added to the blockchain, the recorded value is available to all the users of the network. This revolutionary technology is maintained simultaneously across millions of computers without any central data storage. In short, blockchain is a spreadsheet that can record verifiable transactions efficiently and permanently.

Value exchange network

Fans and advocates of the technology hail it as an efficient global network of value exchange. A very high level of security within the blockchain technology leaves no room for failure. Part of the efficiency is because of its ability to generate value for the community of keepers. In the real estate industry blockchain enables to store authentic online documents, draw digital smart contracts, and keeps the identities of the parties anonymous.

Authentic online documents

While accepting digital payments in real estate transactions is new, this cannot change the status quo. It can only change if the government used blockchain to store all the data of the industry there. If blockchain can facilitate moving land records to an immutable online ledger, no one could go back and manufacture records out of thin air. A huge benefit of such an initiative would be fraud prevention, which amounts to someone producing false paper documents that look authentic.

Digital smart contracts

If verified and quality data about potential buyers and properties were available on the blockchain, it is possible to draw intelligent treaties. These are legal agreements written in computer code with programmed rules to direct the flows of money. No more sit-downs between escrow agents, lawyers, and brokers to review paper documents. The system would have it all and would run smoothly and quickly, provided the data regarding properties and people in the blockchain is accurate.

Parties remain anonymous

Cryptocurrency payments offer anonymity because they are digital that in some cases require just an email address to acquire them. Blockchain could protect the buyer’s anonymity by allowing interested parties to ask questions without revealing who the person behind it was. The fact that the owners can also remain anonymous is a significant appeal to some in the luxury real estate market.

Bottlenecks of implementation

While all sounds great on paper, for everything to work seamlessly, it still needs a lot of things in place. The first challenge comes down to how to authenticate and qualify the data for the real estate sector. Moreover, there are severe logjams in the real estate industry with the manual dissemination and collection of data. Then there are questions about how to regulate or tax those purchases; how to deal with Bitcoin payments that stay in the native cryptocurrency, versus those that people convert to cash; and who has access to query and search data in the blockchain. Although blockchain and cryptocurrencies are here to stay, that will require stakeholders including real estate attorneys, escrow agents, and brokers to get involved.

Digital wealth creators

Currency

Currency

Nowadays there are smart platforms in the crypto industry that create wealth and value. The platforms allow people to lend Bitcoins and receive daily interest on the investment. But first Bitcoin has to be transferred to an account, and all transactions will have to be with Bitcoin.

Emerging crypto investment

The crypto business and the hype behind blockchain remind us clearly of the tech stock and dotcom manias of the 1990s. It sounds a bit like the early days of the Internet, which blossomed when investors were chasing the most speculative stocks that did not end well. Capital One, a software company, is a case in point that went public at $21/- a share. By the end of the year, the share price surged to $1,000/-, however, five years later it filed for bankruptcy.

Largest Bitcoin exchange

Mt. Gox

Mt. Gox

However great the promises, technology always have one mitigating factor, and that is humans. A few years ago, Mt. Gox, the Bitcoin exchange, built on the blockchain, burned and crashed. When it filed for bankruptcy, a large number of Bitcoins went missing from the accounts because of a problem with its code. Mt. Gox was not the only digital enterprise that went down. There were many others too. But that does not by any means mean that Bitcoin is a bubble waiting to be burst.

Concerns by authorities

As traders and investors have bid up Bitcoin’s price higher and higher, the Securities and Exchange Commission have suspended trading of some firms, most notably The Crypto Company. The Security Exchange Commission authorities cite concerns regarding the adequacy and accuracy of information about compensation paid and plans for insider sales. Lately, it has also taken steps to crack down on potential scams and frauds surrounding digital currencies, especially with initial coin offerings. The sale of a digital token to investors instead of stock is known as initial coin offerings. Several cryptocurrency officials are worried about the industry getting a bad name too. Hence they are willing to cooperate with Security Exchange Commission and other regulators to weed out bad actors.

Hopeful but cautious

There is a promising and emerging trend towards digital payments using blockchain

There is a promising and emerging trend towards digital payments using blockchain

There is a promising and emerging trend towards digital payments using blockchain. But investors need to be cautious and not chase small companies that are trying to ride the wave. Currently, Bitcoin’s adoption rate is about 1%, however with scarcity and demand comes value appreciation. So, as the adoption grows, there is hope that Bitcoin’s value will increase substantially. After all, many of today’s tech companies, such as Amazon, Microsoft, and Apple, survived the dotcom tragedy and are now doing better than before.

Coming up next:

The blockchain is the system behind cryptocurrencies. A basic grasp of how it works will prove to be sufficient for now. But in the future, this knowledge would hardly be enough. The question is how to start, and the answer is first to have an understanding of the fundamentals of blockchain. With the growth of the industry, it is possible to reach mass adoption. Even if it fails, Blockchain is here to stay and is a big game changer.