Probably everyone has already heard the word cryptocurrency, and everyone was wondering what it is and why it is so popular. Let’s finally figure out these issues and discuss the latest news and pitfalls.
Table of Contents
What is cryptocurrency
Cryptocurrency is a decentralized digital payment system that does not involve middle controllers in transactions. In this system, everyone is equal, and participants can send and receive payments from anywhere. It exists only in digital form. Furthermore, Cryptography is used in cryptocurrency transactions, which provides high reliability to users. The ability not to depend on 3d parties and to send payments worldwide with high protection has become the reason for the high demand for blockchain development services in the financial business industry.
History of creation
The history of the crypt returns us to 1990 when eСash was first used in the Digi cash system by David Charm and Stephan Brands. Soon in 1998, the platform went bankrupt, but the сypherpunks liked the concept of cash, and it began to improve. Then this concept went through various improvements, but a developer with the nickname Satoshi Nakamoto made the most crucial contribution. It was he who laid the foundation for the first Bitcoin crypt.
Cryptocurrency today
Today, many countries such as the USA, Italy, Greece, and France have strict control over the use of cash when shopping. Scandinavian countries such as Sweden and Norway have announced that they will completely abandon cash payments shortly. All this increases the relevance of cryptocurrency as never before. However, the popularity of the crypt is already high. According to coingecko.com, the volume of capitalization in the cryptocurrency market is comparable to the volume of the market capitalization of Microsoft. While this payment system is still limited in payments, and you can not buy everything yet. However, there is something to spend the crypt on a private plane, fast food, furniture, and a car.
The capture of the Empire
Recently, the whole world was struck by the information about the collapse of Terra / Luna. This meant the disappearance of $ 60 million with the hopes of families who lost everything in a few hours. This is a case with a similar scenario but an even more unpredictable ending. What is happening in the world of cryptocurrencies that crumbs follow each other? We are talking about one of the emperors of the crypto empire. For 30 years, he sat in power but was overthrown. We are talking about FTX’s open market cryptocurrency exchange with native cryptocurrency FTT. FTT became the cause of all the problems. Why? Users could enjoy additional privileges like tax reductions. The fact that FTT turned out to be illiquid is an asset that is difficult to sell in case of unavailability. So FTX drove itself into a corner because it turned out that it couldn’t make payments with an illiquid token. Once a partner and then a rival, Binance, purchases FTT for $ 2 billion. Is he the savior angel? Of course not! Binance, referring to liquidity, sells FTT and gives the token owner a sign that it is not worth holding this token. So quickly, sold In lose their value, and FTX is left without its fortune. The company is about to collapse, and that’s where Binance “saves” the situation and buys FTX for pennies. As a result, the new emperor Binance sits on the throne, completely absorbing the former emperor.
Decentralization and Monopoly
The cryptocurrency system is essentially decentralized, but now the exchange is entirely owned by Binance. That is, centralization still exists, namely monopolization. This situation will undermine the credibility of users. It will not allow them to enjoy this payment system’s advantages. It once again shows the need for regulation in this matter. Let’s get the details straight. Decentralization should be preserved when it comes to the control of banks and the preservation of client anonymity. However, regulation is needed concerning the monopoly because the emperor may want to keep strict rules for himself shortly.
Additional risks
Cryptocurrencies also have several tangible drawbacks. It is not easy to hack user accounts, but it is possible. There have been cases of theft of several million dollars. Also, the rate of cryptocurrencies fluctuates too much. Even one tweet from Elon Musk can raise the price of one of them by as much as 20 percent. The absolute lack of legal protection, every man for himself here.
Conclusion
It’s so difficult to draw any conclusions about cryptocurrency. A payment system with pronounced minuses and pluses, which is more important, everyone will decide for themselves. However, the latest trends of collapse in this system are not encouraging.
