Why has cryptocurrency become such a buzz in the investment worl Miami is known for its anti-corporate finances, or so it looked on June 4-5, when 12,000 people donned suits, festival outfits and whale hats to the world’s largest bitcoin conference, and crypto gurus like Jack Dorsey applauded CHAIR OF TWITTER – With those striving for wealth and freedom, the crowds revolted when El Salvador’s President Nayib Bukele announced plans to launch a legal tender for Bitcoin.

After reaching its 13th year, Bitcoin has become a sensation in the investment world. In contrast, regardless of Bukele’s enthusiasm, it remains an expensive and underused medium of exchange, and in the meantime, a handful of smaller cryptocurrencies are pouring in, accounting for 40% of the total value of all cryptocurrencies today, compared to about 70% last January . In this regard, Elon Musk – an electric car billionaire whose tweets seem to influence the cryptocurrency markets – said he favors smaller competitors for the time being.

1. Why has cryptocurrency become such a buzz in the investment worl

The newspaper ” The Economist” ( Economist ) British At Tqrerha- Many of the currencies listed on the stock exchanges are “symbolic currencies”, which can serve as tools for speculation, but, unlike “coins” – does not aspire to embrace the full function of money . The purpose of “security” tokens – such as stocks and bonds – is investment, as they represent the ownership of companies or other assets recorded in the ledger.

Meanwhile. “utility” tokens are tradable balances that can be purchased and used in exchange for services. For example, cryptocurrency exchanges sell tokens that gamblers use to pay transaction fees.

This only leads to a market capitalization of more than $100 million for about 110 of the 776 coins. and the more serious contenders fall into two categories, where “Bitcoin Copy” seeks to fix the flaws of the cryptocurrency to become a means of payment. while “Copy ether” aims to perform New Jobs.

After reaching its 13th year, Bitcoin has become a sensation in the investment world (Shutterstock)

Obstacles

One of the problems with bitcoin is its volatility. Within a few hours on May 19, for example, its value fell by 30%. To avoid such fluctuations, the so-called “stablecoins” track government-issued currencies instead. get to know me ai marketing website explanation

The newspaper added that other versions are trying to fix the problems that revolve around the privacy of bitcoin, and since all bitcoin transactions are recorded on the public database “Blockchain”; They leave a mark.

On June 7. US officials said they had recovered a ransom of $2.3 million, which had been paid in bitcoin. to the hackers who shut down Colonial Pipeline last May after discovering the virtual wallet they used.

Some coins try to hide their owner’s identity as much as possible using anonymization technology. for example, Monero tries to prevent flows from being linked to a fixed identity, tracking funds. or monitoring transaction size.

Why has cryptocurrency become such a buzz in the investment worl

Other versions still try to make payment processing cheaper and faster, and to ensure the legitimacy of transactions without relying on a central authority; Bitcoin relies on the “Proof of Work” protocol, where “miners” compete to validate transactions by solving time-consuming digital problems.

However, the way Bitcoin is designed makes it capable of handling only about 7 transactions per second; So the creator of Litecoin tweaked the algorithm so that new blocks were processed more often. In contrast, the supply of dogecoin, which was developed as a joke, remains unconditional.

2. Stable or cryptocurrency?

For every flaw that copies try to fix; Desirable attributes of bitcoin seem to be lost. For example. stablecoins require users to trust both the issuer (which must keep the fixed cash in reserve) and the government, undermining the original chaotic goals of the cryptocurrency. In February, New York authorities fined a Tether issuer $18.5 million for lying about its dollar stock.

Major exchanges have written off the ultra-private cryptocurrency Monero, fearing possible money laundering. Meanwhile, the proof-of-stake system encourages hoarding of the currency and limits liquidity, and these trade-offs may be the reason none of the copies have been able to outperform bitcoin.

according to analysts at Brave New Coin research firm; Alternative actions, such as activity on GitHub, a platform that programmers use to collaborate on projects, show that Bitcoin remains uniquely popular. get to know me currency explanation zil

Why has cryptocurrency become such a buzz in the investment worl

The newspaper pointed out that the threat instead comes from smarter “blockchain” currencies that can achieve more than just recording payments. Cryptocurrencies are valuable – the use of automated software that can move funds between wallets only after a specific event. Ether and its versions have become central to the emerging field of decentralized finance, where “smart contracts” simulate complex financial transactions such as providing loans or insurance, without the need for Trusted broker.

Over the past 12 months, the data firm Chain Analysis estimates that the emerging decentralized finance space has managed to drive 40% of Ether transactions, up 7% from the previous period, and with about $62 billion in capital deposited. In its applications, decentralized finance remains limited, but it is growing rapidly. Bitcoin, whose blockchain cannot operate with smart contracts, is ill-equipped to catch up, and the advantage and scarcity of Bitcoin likely make it attractive as a monopoly asset. Failed compensation.

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