01 logo

Bitcoin

by cdenis17 3 months ago in cryptocurrency
Report Story

Bitcoin recorded the largest quarterly loss in more than a decade.

A cryptocurrency, crypto-currency, or crypto is a digital currency designed to work as a medium of exchange through a computer network that is not reliant on any central authority, such as a government or bank, to uphold or maintain it.

Individual coin ownership records are stored in a digital ledger, which is a computerized database using strong cryptography to secure transaction records, to control the creation of additional coins, and to verify the transfer of coin ownership.

Despite their name, cryptocurrencies are not considered to be currencies in the traditional sense and while varying treatments have been applied to them, including classification as commodities, securities, as well as currencies, cryptocurrencies are generally viewed as a distinct asset class in practice.

Some crypto schemes use validators to maintain the cryptocurrency. In a proof-of-stake model, owners put up their tokens as collateral. In return, they get authority over the token in proportion to the amount they stake. Generally, these token stakers get additional ownership in the token over time via network fees, newly minted tokens or other such reward mechanisms.

Cryptocurrency does not exist in physical form (like paper money) and is typically not issued by a central authority. Cryptocurrencies typically use decentralized control as opposed to a central bank digital currency (CBDC).

When a cryptocurrency is minted or created prior to issuance or issued by a single issuer, it is generally considered centralized. When implemented with decentralized control, each cryptocurrency works through distributed ledger technology, typically a blockchain, that serves as a public financial transaction database.

Traditional asset classes like currencies, commodities, and stocks, as well as macroeconomic factors, have modest exposures to cryptocurrency returns.

The first decentralized cryptocurrency was Bitcoin, which first released as open-source software in 2009. As of March 2022 there were more than 9,000 other cryptocurrencies in the marketplace, of which more than 70 had a market capitalization exceeding $1 billion.

According to Jan Lansky, a cryptocurrency is a system that meets six conditions:

The system does not require a central authority; its state is maintained through distributed consensus.

The system keeps an overview of cryptocurrency units and their ownership.

The system defines whether new cryptocurrency units can be created. If new cryptocurrency units can be created, the system defines the circumstances of their origin and how to determine the ownership of these new units.

Ownership of cryptocurrency units can be proved exclusively cryptographically.

The system allows transactions to be performed in which ownership of the cryptographic units is changed. A transaction statement can only be issued by an entity proving the current ownership of these units.

If two different instructions for changing the ownership of the same cryptographic units are simultaneously entered, the system performs at most one of them.

In March 2018, the word cryptocurrency was added to the Merriam-Webster Dictionary.

Bitcoin recorded the largest loss in more than a decade in the second quarter of this year, at about 58%, according to data provided by CryptoCompare.

Bitcoin fell from $ 45,524 per unit at the beginning of the second quarter to about $ 18,000 per unit on Thursday, according to CoinDesk data. This is the worst quarterly performance of bitcoin since the third quarter of 2011, when it lost 68.1% of its value.

In June, bitcoin fell 39.8%, recording the weakest monthly evolution since 2010, when cryptocurrency became available on platforms, according to Coin Metrics.

Meanwhile, ether fell 69.3% in the second quarter, the weakest quarterly performance since the currency was created in 2015.

Cryptocurrency prices fell sharply amid high inflation, which prompted central banks to raise interest rates, leading to sales of risky assets such as stocks and digital currencies.

The collapse in prices has exposed the problems of several crypto companies and projects, especially those that offer loans.

In May, the stable currency terraUSD collapsed, along with the sister currency moon.

In June, cryptocurrency company Celsius blocked customer withdrawals due to extreme market conditions.

The CoinFlex cryptocurrency trading platform stopped customer withdrawals last week, also due to extreme conditions.

The liquidity crisis has led to the liquidation of the hedging fund for cryptocurrencies Three Arrows Capital.

cryptocurrency

About the author

cdenis17

Reader insights

Be the first to share your insights about this piece.

How does it work?

Add your insights

Comments

There are no comments for this story

Be the first to respond and start the conversation.

Sign in to comment

    Find us on social media

    Miscellaneous links

    • Explore
    • Contact
    • Privacy Policy
    • Terms of Use
    • Support

    © 2022 Creatd, Inc. All Rights Reserved.