E-money today is hard to surprise anyone. Webmoney, Yandex.Money, PayPal and other services are used to pay for goods and services via the Internet. Not so long ago a new type of digital currency appeared - cryptocurrency. The very first was Bitcoin. Cryptographic services are engaged in its emission. Scope - computer networks. In more detail about what cryptocurrency is, how it is used, read further in this article.
History
For the first time, the term “cryptocurrency” began to be applied to the Bitcoin payment system, which Satoshi Nikamoto created in 2009. He and a group of programmers developed a system of virtual money that can be used on the Internet without commissions, intermediaries. Virtual currency is created through mathematical algorithms, acts only on the network, but around the world. Its most important advantage is decentralization. No institution in the world controls the release of cryptocurrency. The same fact imposes restrictions on the maximum volume of characters in circulation. In theory, the national unit of any country should be provided with internal resources. But cryptocurrency refers to fiat money, that is, its circulation is not secured by state reserves.
The idea of conducting transactions that are not controlled by the state, looked very tempting, and especially for representatives of the shadow business. Later, participants in the financial market saw the benefit of using cryptocurrency. For them, virtual money, and then forks (copies) became tools with tremendous profitability and income. The Chinese cryptocurrency exchange, Bitstamp, BTC, MtGox and four dozen other markets offer everyone to trade in digital money.
Benefits
Until 2013, almost all cryptocurrencies operated on Bitcoin code. Then platforms began to appear that supported not only exchange trading, but also purchases in stores, instant messengers, etc. By default, cryptocurrencies do not provide for refunds, forced freezing or blocking of accounts. But participants in transactions can voluntarily block access to their funds.
The most popular cryptocurrencies
Bitcoin (BTC) is considered to be electronic gold. According to the founders, by 2040, 21 million bitcoins will be issued. The "mined" to date, 12 million has already been distributed among all participants. All transactions are irreversible, it is almost impossible to trace the path of movement of funds. All operations are performed directly between the participants, that is, without a common server.
Litecoin (LTC) is the best, from a technical point of view, analog of Bitcoin. It is emitted at a speed of up to 25 pieces per minute. The exchange rate between participants is 4 times less.
Pircoin (PPC) - copy (fork), which is not limited in issue. The course is adjusted by annual 1% inflation. The income from the use of currency is distributed not only among the owners of the site, but also between the owners. Thanks to this approach, the capitalization of the currency in the first 6 months after the appearance amounted to $ 135 million.
The Chinese exchange gives everyone the opportunity to buy and sell less popular cryptocurrencies. Namecoin (NMC) is most often used by website owners to pay for a domain name in the .bit zone. Quarkcoin (QRK) is distinguished from all others by a high degree of protection. All operations go through nine stages of encryption with six different types of codes. Also in circulation is Feathercoin (an advanced copy of LTC), protoaction, worldcoin and megakoin. Each of them has its own characteristics, but in general they copy bitcoin in one way or another.
The Chinese currency exchange allows participants to conduct two types of trading. On some, virtual money is exchanged, on others, digital currencies are exchanged for world currencies.
Stock market
In June 2015, the Chinese stock exchange experienced the largest drop in 10 years. Shanghai Composite's main stock index fell 12.1% in just one week. The situation is also exacerbated by a decline in industrial sector growth, a crisis in the construction sector. For a long time, the market developed, moving the country's economy forward. Rising stock prices allowed the state and banks to replenish the treasury. A significant role in this was played by advertising in state media with a call to invest in stocks. The Chinese Stock Exchange in 2014 showed an average daily turnover of 200 billion yuan. By April 2015, it was already 1 trillion. As a result of the rapid growth, Chinese stocks were greatly overvalued.
Bubble burst
On July 7, 2015, 173 companies halted stock trading due to a sharp price collapse. The main problem is margin trading. Investors used debts to buy securities. Shares of companies listed on China lost a total of $ 3 trillion. In just a month, stock market growth declined from 122% to 36%. The last time such a picture was observed in 1992.
Desperate measures
Investors who bought shares yesterday were now selling them. Prices are falling, people are going bankrupt. The situation is aggravated by the fact that new market participants are ordinary consumers who really do not know anything about stocks. Thanks to active advertising in the media, the process of investing has become fashionable among the population. As you know, a lack of knowledge is the main cause of fear. This is primarily true of the stock market.
The state, represented by the People’s Bank and the Central Bank Regulatory Commission, has taken measures to stabilize the situation in the country. Initially, a ban was placed on the initial public offering. The bank began to buy securities with high capitalization. Then China Securities Finance Corp. was funded, where investors can now apply for new loans to buy shares. Theoretically, these measures should improve the market situation, but not for long.
China Commodity Exchange
China is a leader in gold mining and the world's largest importer. Since 2009, the country's government has been hiding national precious metal reserves. For a long time, gold was mined in alluvial deposits until they were recognized as harmful to the environment. Initially, only the state had the right to trade in precious metals. The Chinese exchange did not open access to the purchase of gold to jewelry companies only in 1982. For a long time, this metal was treated as a symbol of wealth. Therefore, when the Chinese gold exchange in Shanghai was founded in 2002, banks, factories, enterprises and individuals began to buy precious metal. In 2014, a free trade zone was created , investors got access to world markets. A product that goes on sale in the PRC first passes a check for compliance with mass and purity standards.
Since 1919, the price of gold has been formed according to the London Gold Fix standards. Twice a day, it was installed by representatives of four large banks in the world. Since March 2015, six financial institutions will participate in the new ICE auction (in the future this figure will increase).
Shanghai Metal Exchange
SHFE (English abbreviation) was founded in 1999, after combining the food, commodity and metal exchanges into one structure. It is under the control of the regulatory committee. SHFE trades futures for rebar, zinc, rubber, lead, fuel oil, aluminum, and copper.
Today, the Chinese metal exchange is one of the main pricing platforms. The value of the contracts on it is attractive to all parties to the transaction. It is managed by the SHFE CEO, who reports to 17 departments. The main supervisory authority is the council to which the committees report on:
- information technology;
- metals;
- gold and steel;
- trade;
- compliance;
- qualifications of participants;
- arbitration;
- finance;
- industry and energy.
A powerful electronic system with two-way satellite communications has been created specifically for bidding. It quickly accepts orders and processes data online.
The China Rare Earth Exchange is open from 9 a.m. to 11.30 a.m. After a two-hour break, trading results are summed up. All transactions are conducted electronically. Banks are responsible for daily clearing. All 200 exchange participants are divided into two groups. The first half are brokers, the second are proprietary members. Each order is processed by the SHFE participant.
Increased security
The panic that formed on the market this summer led to serious financial losses. To prevent such a situation from happening in the future, a crisis prevention mechanism was introduced. Its essence lies in the fact that the futures and two stock exchanges will suspend trading for 30 minutes if the index changes by 5% during the day. If fluctuations exceed 7%, trading will be closed until the next business day.
New platform
Bohai Commodity Exchange in 2013 was the first to receive permission to conduct multinational trading in RMB. It began to function back in 2009 with the sale of oil and coking coal. Today, 70 positions are traded on the exchange, including metals and raw materials.
In 2013, China announced a development strategy aimed at establishing relationships with the countries of Eurasia. It includes two areas: the economic belt and the sea route. The goal of the program is to open access to international trade for local investors. As part of this project, the Chinese electronic platform Bohai will launch the platform by the end of 2015. It will open to investors access to trade with the countries of the sea route.