Category: Cryptocurrency

Judging by the 50% drop in Bitcoin prices in just a few days in early March 2020, it’s pretty clear that cryptocurrency is by no means immune to the global dip which the coronavirus has created. It’s not just Bitcoin that’s feeling the squeeze: all cryptocurrencies saw a drop in price over the past month. Although at first sight, this news is alarming, in many ways it’s reflective of the more general bear market that COVID-19 has indirectly created. As a growing number of governments forcibly shut non-essential businesses and tell workers to stay at home, it’s inevitable that markets will suffer.

Some cryptocurrencies still showing an overall rise

Whilst the short-term picture isn’t the best, over the past twelve months, several cryptocurrencies have experienced an overall price rise. These include Bitcoin and Ethereum. In addition, the alternating pattern of bear and bull is fairly typical of the trading path which most cryptos take over time. It’s unlikely that the current buyers market will continue indefinitely – as various countries come out on the other side of the pandemic, it’s highly likely that economies will begin to rally. This, in turn, will strengthen markets and asset prices should follow suit.

Will COVID-19 see the end of cryptocurrency?

Despite the initial dip in prices, the average prices for several cryptos are beginning to slowly creep back up again. Whether this trend will continue, and whether it will be sustained across all cryptos, remains to be seen. Of concern is the amount of time it will take for economies to recover from the damage which COVID-19 has caused – not least because of the complex interrelationship between the markets and the economy is further complicated by traders’ subjective views on the virus’ progress. Whilst it’s unlikely COVID-19 spells the end of cryptocurrencies, it’s highly likely to create a depressed market for some time to come.

Like virtually every other asset in the market, Bitcoin has taken a knock as a result of the coronavirus pandemic. With prices tumbling by a dramatic 50% in the first week of March, recovery has still not been forthcoming. Although the scale of the drop is significant, a prolonged bear market is likely to be the inevitable result of the economic turbulence which COVID-19 is creating. Although Bitcoin’s digital nature means it’s not directly vulnerable to the problems the virus is creating, it’s inevitable its position will remain volatile whilst so many national economies are being put in sudden and substantial decline.

Historically, there is cause for optimism

As governments across the globe implement increasing restrictions on movement and trade, it could well be the case that Bitcoin continues to see prices which are lower than in the recent past for some time to come. However, longer-term analysis of Bitcoin prices shows that the cryptocurrency tends to go through cyclical bull and bear periods, coming out of each, only to move to the next over time. For investors, this could indicate that hanging on to stock at this point is a good move, as recovery will be on the way in the next few months. It’s also a good time to buy, although the purchase would be a longer-term investment in order to stand the best chance of optimising a profit.

What do the experts say?

Opinion on the immediate future of Bitcoin is varied! Whilst some commentators (including Gov.capital, Longforecast and Digtialcoinprice) are predicting modest price rises in the next month (although far below late February prices), Cryptorating and Cryptoground have less optimistic forecasts. With so many uncertainties regarding the progress of COVID-19 in the next few months, the watchwords have to be caution and conservative trading.

Bitcoin was the original cryptocurrency blockchain, which created the entire industry we are talking about. Litecoin was created to improve on Bitcoin. These improvements were rather minor and did not deviate too much from what Bitcoin already offered. Ethereum includes the Ethereum Virtual Machine, which processes complex smart contracts. In a lot of ways, it does everything Bitcoin does and more.

Bitcoin

Bitcoin is a decentralized cryptocurrency where you can transact on a peer-to-peer network without the need of a middleman. The main innovation behind Bitcoin relies on the fact that it is a decentralized money system with the Bitcoin being the currency. But Bitcoin is also the software and protocol that allows users to issue a digital currency and operate transactions in a secure and anonymous way.

Ethereum

Ethereum is a decentralized platform that runs smart contracts. It is a public blockchain platform with its own cryptocurrency called, Ether, and featuring smart contract functionality. The Ethereum Virtual Machine allows people to execute peer-to-peer contracts using Ether.

Ethereum is like a global and shared computer on which anyone can build decentralized cryptocurrency like Bitcoin. However, Ethereum is much more than a platform hosting new cryptocurrencies, it is a Turing-complete platform, which simply means that each full node on the network runs a Virtual Machine called the ”Ethereum VM” that enables the nodes to execute programs written in a Turing- complete language.

Litecoin

Litecoin and Bitcoin are based on the same technology. Litecoin value is pegged to that of Bitcoin. However, Litecoin’s protocol is different from Bitcoin’s protocol, Bitcoin uses the SHA-256 algorithm while Litecoin uses Scrypt. Bitcoin has a total supply of 21,000,000 coins while Litecoin has a total supply of 84,000,000 coins. Litecoin confirm transactions faster than Bitcoin as it aims at processing a block every 2.5 minutes rather than Bitcoin’s 10 minutes.

Bitcoin and Cryptocurrency: You’ve probably heard of them, but what do they mean?

We’ve summarised a brief history of Bitcoin and Cryptocurrency to help answer your questions.

We’re all pretty familiar with how to make a payment. You select the good that you want to buy, hand over the money or pay by card for the price that the product is valued at, and you walk away having made a purchase. Well, when it comes to cryptocurrency, this basic process is the same.

The main difference is that cryptocurrency is a digital asset, used as an alternative to traditional money, to make an exchange. However, unlike banks and traditional digital currency, cryptocurrencies are controlled by a decentralized network of users. This means that it isn’t subject to national governments or central banking authorities. Cryptocurrency works through distributed ledger technology such as a blockchain, which will serve as a public financial transaction database.

What is BitCoin?

Bitcoin is the most common type of cryptocurrency. It is widely considered to be the first decentralized cryptocurrency, emerging in 2009. Since then, there have been over 6000 variants of it realised.

Just like normal money, Bitcoin has a relative value. Whole Bitcoins can be split into smaller units. The smallest unit is a satoshi and this can’t be broken into smaller units.

BitCoin is extremely versatile and can be used to make purchases, exchanged to settle debts and it can also be swapped for other currencies.

How do you purchase with Bitcoin?

First things first, you must open a Bitcoin wallet and then buy some Bitcoin. These can be bought from Bitcoin merchants or via an exchange.

To make a payment via Bitcoin, that webshop must accept BitCoin payments. If so, simply choose, the ‘pay with Bitcoin’ option at checkout. Congratulations, you’ve now successfully paid with cryptocurrency.

Have you heard the term blockchain and ever wondered just what it means? You will often hear blockchain raised in conversations surrounding cryptocurrencies, like Bitcoin, as well as the banking and investment sector. However, it is also being utilised in industries such as e-commerce, energy, trade and supply chains, property and the media.

In a nutshell, the blockchain is essentially a computerised record of exchanges or transactions. These are copied and disseminated throughout an entire system of computer frameworks. Each ‘block’ in the ‘chain’ contains various exchanges, and each time another exchange happens on the blockchain, a record of that exchange is added to each member’s record. This is what makes information recorded in a blockchain so hard to falsify or change.

A blockchain can be programmed so that all records are individually encrypted and the identity of participants is either anonymous or pseudonymous. All network participants have a copy of the records for complete transparency and any validated records are irreversible and cannot be changed. A transaction timestamp is recorded on a block in real-time which means that it cannot be backdated, and all network participants agree to the validity of each record.

Each block contains data, a hash of the block and hash of the previous block. The data that is stored depends on the type of the blockchain. The bitcoin blockchain, for example, stores the details of a transaction such as the sender, receiver and amount of cash. The hash can be equated to a fingerprint; it identifies a block and all of its contents and is always unique to every block just like a fingerprint. Changing something inside the block therefore changes the hash. The hash of the previous block creates a chain of blocks making it very secure and hard to tamper with. The hash of the previous block must match up with the current hash of the block before it, making it a chain of blocks. This is where we get the term ‘blockchain’.