How does Cryptocurrency work? Why are prices falling?

in cryptocurrency •  7 years ago 

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CRYPTOCURRENCY is the new buzzword of 2018 with currencies such as bitcoin and Ripple surging from strength to strength - albeit with falling prices today. But what is a cryptocurrency and how does it work?

The first cryptocurrency that was ever created was the bitcoin, which started in 2009 and is still the most famous digital cash.

There are now more than 1,000 available online with bitcoin prices rising to $ 20,000 in early this year.

Bitcoin prices today dropped dramatically and dropped over half of its value since the $ 20k recorded on January 18th.

While the Ripple values ​​also fell down and fell to $ 0.65, when the XRP crashed back to December prices.

What is cryptocurrency?


Cryptocurrency is best seen as digital cash - looks like using Paypal or a debit card, except instead of paying in pounds or dollars, you use a particular crypto as bitcoin or Ripple.

Cryptos only work in computers, and transactions are recorded on a digital public largebook called a blockchain - which is encrypted, why it is called a cryptocurrency.

The biggest difference between crypto currency and bank credit is that there is no intermediary as a bank.

So instead of banks and governments that issue the currency and keep records, an algorithm makes it all for you.

How does Cryptocurrency work?


Cryptocurrency technology allows users to make payments and save money on the internet without having to use their name or a bank.

Transactions can be performed between peers from "cryptocurrency wallets". These are then registered on blockchain.

It works by matching public codes that relate to user-owned private passwords - known as keys - used instead of names.

Individual devices are created through a process called mining, which involves using a complicated computer program to solve online mathematical problems or algorithms that generate coins when answered correctly.

Users can also buy the currencies from brokers and then save them and use them using cryptographic wallets.

Cryptocurrencies are known to be secure and provide a level of anonymity.

Transactions can not be fake or reversed, and there are tend to be low fees, which means that it is a more attractive way to make online purchases.

Why are crypto prices falling today?


Experts have identified a number of possible causes of the accident, which saw prices around $ 445billion down from highs less than a month ago.

The market is still on its way from revelations that cryptocurrency Tether may have been manipulated after the Bitfinex Exchange was judged by the US Commodity Futures Trading Commission.

Bitfinex was hit by the application a month ago, although the news did not reach investors until this week, which could have gotten the mass of sales.

Tether is affixed to US dollars, so $ 1 buys a Tether token, but investors fear Tether Limited does not have the reserves of USD needed to support its market price of 2,177%. Ticket, and that Tether has flooded the market without being put on dollars all.

Mati Greenspan, market analyst at eToro, told Business Insider: "The claim is - and the requirement has grown lately - that they do not have these reserves.

"They have not been incredibly transparent about where they hold them and how much they are in different places."

While a recent report also suggested bitcoin could jump up as much as 80 percent if the claims are correct.

Cryptocurrencies received another blow yesterday when the Indian Finance Minister proposed that he wanted to "eliminate" the use of digital assets for payment purposes.

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thanks for information on cryptocurrency n why does it work n falling.😊

great post man . i always enjoying your articals.. because in your artical always something new :) keep it up @tradewonk

Thanks buddy.

mention not :)

very informative post specially for those who dont know about crypto currency brother you have a good knowledge about crypto currency :)

keep smiling and keep sharing good posts like this
bitcoin will come down more but after june market will go up as i think an according to market search if i m not wrong :)

Thanks buddy

Yes cryptos are receiving a lot of blows, how will we ever get the price to skyrocket again?? Thoughts?

End of february, after the chinese new year

Why was that?

Resteemed
Thanks for sharing ...

My pleasure

Great post @tradewonk! Is Ripple not created by a bank?

No, but it’s a transaction currency build for banks, but still decentralized

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Some cryptos work well but unfortunately they are traded in bitcoin which is an electricity hog.

Go ASIC free and use Vertcoin.

So it doesn't use much power? It sounds like Vertcoin is very unique. https://www.reddit.com/r/vertcoin/comments/6tbvcm/why_is_vertcoin_asic_resistant/

True, you can use a CPU or GPU to support the Vertcoin network and also make a few bob for yourself.

Very interesting. https://vertcoin.org/

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I still remain optimistic for the future of cryptocurrency for two reasons: Steem has just entered the Binance platform. The Chinese New Year in two weeks which is also one of the causes of the decline of the cryptocurrency

Thanks @tradewonk! I'm interested in mining. Which currencies that can be mined with a desktop pc? Is it profitable?

Very good and interesting information ever follow me for more upvote and comments

Informative post ...
Resteemed ...
and upvoted..
Thanks for sharing...

Tether sounds nice as a crypto that doesn't fluctuate as much. It could be a problem if they don't have the reserves.

Thanks for shairng @tradewonk! I think it is really important to explain the markets to people who don't understand them, so thanks for doing exactly that.

There are many other factors too, such as India's latest announcement of their stance on cryptocurrencies, but you are right, the issue with Tether is also a problem and everything else you mentioned makes sense.

Thanks as always for sharing, would appreciate your support on my latest post!

This post has received gratitude of 9.22 % from @appreciator thanks to: @tradewonk.

This post has received a 26.55 % upvote from @booster thanks to: @tradewonk.

There is just a lot of fud.
Every country wants to regulate or even ban cryptocurrency.
Thats why the market is down.

We will probably go lower before we go to the moon!

Do you think cryptocurrencies will recover from the decrease?

thank you for @tradewonk

Thankyou for the post, now I am half way there about the crypto currency world

Organized post to explain cryptocurrency but i think you forgot to add some important concepts like wallets,mining etc etc related to cryptocurrency.

I really hope this isn't a indication for a bubble bursting