Cryptocurrency is a new trend in the world. Her story has only one decade. But despite this “youth”, the cryptocurrency market is now extremely developed. There are various exchanges, many developments and much more. But within the framework of the article, the greatest attention will be paid to the cryptocurrency market.
general information
The technology on which the cryptocurrency market is built has a great future in the financial system. But no one can yet predict what it will be. Undoubtedly, blockchain technology is also valuable, as well as ways to store existing savings, and their means of exchange. But here is the variety! Even a superficial review of the cryptocurrency market allows us to notice that they breed at a significant speed. So, 2017 has not yet had time to end, and almost a hundred new means of settlement have arisen in the world. Moreover, significant funds are often attracted under them. On average, for the same 2017, for each cryptocurrency, investors received a little less than ten million dollars. It’s hard
not to notice that there is a high risk of a collapse in which someone suffers. But with the prospect of a significant period of time, this situation is excellent: we will learn more now - there will be less problems later. We will also consider what cryptocurrencies are on the market and what they are.
Potential problems
No matter how new it is, we should not forget that all cryptocurrencies are financial instruments. In other words, this is an area of high risk. Although significant profits. Here you can recall the so-called Mississippi bubble, and the crises of 1929, 1980s, 2008, and many others, much smaller in size and scope. Therefore, the first financial instrument (Bitcoin), when it began to make money, aroused the desire of many to earn in this way and create numerous analogues. Anyone who enters the game at the very beginning makes good money. The later - the higher the price and the greater the risk. In this case, the cryptocurrency market is not very different from what could be observed in many similar cases with other financial instruments.
How it all began?
It all started with a group of programmers who called themselves Satoshi Nakamoto. It was they who developed the first cryptocurrency, known to us as bitcoin. Then a number of idealistic characteristics were voiced that virtual money should have for use in calculations without control, intermediaries and commissions. Therefore, it is not surprising that this idea was not initially perceived. But over time, she began to gain popularity as an idea with good prospects. And most importantly - high profitability. Over time, the shadow business began to show interest in them. And now, the profits and prospects of this direction have been understood by numerous speculators. For them, these are attractive tools with high profitability and significant revenues.
Trade
For her, the cryptocurrency market took shape. As the number of people who wanted to participate in trade grew, so did the diversity of target sites, which, by analogy with securities, were called exchanges. Interest in the currency fuels an unprecedented cent growth. Consider the case of bitcoin. So, initially it cost only five cents of the USA. And just the other day a record of 5,000 dollars was set! Using simple calculations, it can be established that over a decade its value has increased one hundred thousand times. No wonder Bitcoin is called black gold. There is little where you can get such a benefit. After the capitalization of the cryptocurrency market with real money began, the volume of trade began to grow sharply. Now we are talking about billions of dollars. Let's do a little analysis of the cryptocurrency market and evaluate what is at our services.
Bitcoin
It was with him that it all began. Bitcoin is rightly called electronic gold. It was launched in 2009. A feature of bitcoin is the complexity of its production and limited emission. Their quantitative limit is exactly 21 million pieces. It will probably be reached around 2040. Now profitability often allows you to beat off only one coin. But the cost of extracting it is steadily increasing. Bitcoin operations are transfers between individuals. They are reflected in transactions. This action is irreversible. At the moment, to follow the next path of digital money is almost impossible. This state of affairs greatly complicates external control and makes it practically impossible. You can often hear forecasts that the cryptocurrency market will fall. So far, this is quite relevant in relation to a large number of other surrogates, but not to bitcoin.
Lightcoin
It was launched in 2011. The creation was carried out under the motto of providing an alternative to silver. There is a limit of 84 million pieces. The peculiarity of this system is that they have worked quite hard on the “mining” of lightcoins. So, in this case, it is quite difficult for owners of superproductive systems to claim superprofits. Virtually all users are equal in their capabilities.
Pircoin
It is similar to its predecessors cryptocurrency. Despite the fact that it has almost identical characteristics, there is still one significant difference - there are no restrictions on emissions. To adjust the volumes and rate, inflation is laid down, which depreciates the cost of pircoin by 1 percent per year. A smart capitalization scheme is also applied here, so the cryptocurrency market forecast in this case is positive. So, sixteen months after the start of trading, the cost of pircoins supported 135 million real US dollars. Why are they so attractive? The fact is that according to the existing approach, income is distributed not only by people representing computing platforms, but also by owners.
Namecoin
This currency began its “life” in 2011. It should be noted that it stands out from other financial instruments of this kind. So, cryptocurrency is used as an alternative to an existing DNS system. It is used by network resource owners who are unhappy with ICANN's monopoly and its virtually unlimited possibilities. Namecoin works on the alternative DNS system. This currency is used to pay for the extension of the resources that are in the .bit domain zone. But this scheme is attractive not only for economic profitability. After all, its value is not contained in one value. The fact is that the data exchanged goes through cryptographic encryption. Therefore, you can be calm for them.
Quarkcoin
Started functioning in 2013. It is quite significant in popularity. Attractive to the masses for its high security. So, for the transaction is used nine consecutive encryption of six different types. Initially, the currency was mined in huge quantities. Literally in a matter of months, its number reached tens, and then hundreds of millions. Now their emission has been reduced to one million per year.
The risks
On the whole, the most interesting representatives of the cryptocurrency market were considered. Of course, this is far from all, there are still many different interesting names and projects, but if you describe them all, you need a book, not an article. Now let's talk about the risks. Do not forget that any financial instrument has them. You can often hear about the cryptocurrency market crash. Do these statements have real ground? Undoubtedly! It should be understood that cryptocurrencies are not supported by the state or certain material values. They are used solely because people consider them valuable. Faith will disappear - and they will simply turn into encrypted data cells on the servers. In reality, everything is much more complicated. A number of factors influence the state of affairs. It should be understood that upon reaching the saturation point, a collapse may occur. Even now, you can periodically read that a particular cryptocurrency market has fallen. As a rule, this most often means a temporary drop in the value of bitcoin, but you should still be careful. If you want to enter this market, it should be understood that in a system where the tools are connected, the collapse of one can contribute to the emergence of the domino effect.
Speaking of cryptocurrencies
It should be noted that they (so far) do not carry systemic risks. In the event of a collapse, the impact of cryptocurrencies on the economy will be minimal. Although it should be noted that there are quite a few failures in the work of exchanges. Of course, they did not undermine the economy, but they have already attracted attention. This negative aspect must be overcome before the cost of gaining experience becomes extremely high. In the meantime, it can be stated that even if all cryptocurrencies inexplicably collapse in one day, this will not knock the foundation out from under the feet of the financial system of the world. Why? The fact is that the capitalization of all cryptocurrencies so far does not exceed ... the state of Bill Gates. Of course, the damage will be serious, but limited. This is about the same as another hurricane in the United States. It should be noted, however, the fact that cryptocurrencies are dispersed throughout the world. So, for example, they bloomed to the greatest extent in Asia, in countries such as Japan, South Korea, and India. At the same time, as the capitalization of currencies grows, their level of conversion increases, and relations with the rest of the market expand. Gradually even regulatory decisions are made.
Conclusion
What can be expected in the future? Most likely, some platforms will collapse, some cryptocurrencies will depreciate, many people will lose their money, someone will go to jail. And although there are already certain alarming signals, numerous experiments, which continue in large numbers, will prepare the foundation for a diverse large capital market, on which anyone can work. Literally several years have passed that the world community needed to evaluate and adopt a completely new concept. Now virtual money is a huge market. Cryptocurrencies attract many people with attractive prospects and high profitability. But you should remember the pitfalls and not lose in the pursuit of wealth all that is already there.