The cryptocurrency market can be confusing because it is tied so symbiotically to human emotion. Since then, it has fallen back down to earth, but memecoins like Dogecoin symbolize how much speculation and volatility exist in the cryptocurrency space. It even reached a market cap of $88 billion in May 2021. Dogecoinĭogecoin is a memecoin, meaning it is an asset inspired by a meme or internet joke, in this case, a shiba inu dog named Kabosu who went viral after her owner posted a photo of her on her personal blog in 2010.īut that hasn’t stopped dogecoin from actively trading for real money. However, it remains the biggest stablecoin in the space. That, combined with the emergence of rival stablecoins, has seen its market share dip in the last couple of years. Tether has been dogged by concerns over whether its tokens are really backed one-to-one with full reserves. ![]() One tether token will always trade for $1. Tether is a stablecoin, meaning its value is pegged to a fiat currency - in this case, the U.S. It was inspired by bitcoin, with Lee describing it as “the Silver to Bitcoin’s Gold.” With bitcoin viewed as more likely to be used as a store of value, the thesis behind litecoin was an offshoot of bitcoin that was more suitable for payments. Litecoin is another older cryptocurrency, launched in 2011 by former Google engineer Charlie Lee. A good way to view it is as a playground for developers.ĭecentralized finance and non-fungible tokens are two of the most famous areas of development on ethereum, although both have seen massive outflows throughout this crypto winter. Other cryptocurrencies and decentralized applications can be launched on top of ethereum. It is attempting to become the base layer of a new decentralized system. EthereumĮthereum is the second-biggest cryptocurrency, but it is vastly different from bitcoin. Bitcoin’s price also took a massive hit last year following the implosion of stablecoin terraUSD in May 2022, with BTC prices tumbling below the $30,000 threshold. Bitcoin hit an all-time high above $68,700 in November 2021 before a precipitous fall throughout 2022. Right now, it remains incredibly volatile. Some liken bitcoin to a digital form of gold and hope it can one day be a store of value where citizens can park their wealth outside the control of third parties like governments and central banks. But that comes at the cost of a mammoth energy consumption bill, something detractors criticize concerning climate change. ![]() It runs on a proof-of-work blockchain, meaning it theoretically is more decentralized than other cryptos. The coin that kicked it all off, bitcoin has a first-mover advantage and operates differently from most cryptocurrencies. Some experts even argue all cryptocurrencies are nothing more than speculative toys programmed to eventually hit zero.īelow are some of the most well-known coins in the space. Of the thousands of cryptocurrencies in existence, the vast majority aren’t worth much. The back end of this technology is very technical and beyond the scope of this piece. In the case of bitcoin, the blockchain is maintained by a group of volunteers, known as miners, who solve complex mathematical puzzles with powerful computers. ![]() “This decentralization is ensured by strong cryptographic mechanisms that enable trustless interactions between network participants,” Wendler adds.Īs crypto has evolved over the past decade or so, different forms of blockchain technology have been developed in conjunction with different cryptocurrencies. “A blockchain is a decentralized database where data is sectioned into blocks, which are connected with one another into a linear sequence through cryptographic techniques,” says Till Wendler, founder of Web3 company peaq. It lives on the internet in plain sight for all to see, with every transaction in the history of bitcoin recorded on it. This database is updated in real time and records every transaction using that cryptocurrency.įor example, the bitcoin blockchain can be seen here. Whenever you hear the term blockchain, you can visualize a public ledger or database. What is a blockchain?īlockchain is the technology on which cryptocurrencies run. The sector has attracted mass speculation, with the market cap of all coins rising as high as $3 trillion during the 2021 bull market before collapsing during the 2022 “crypto winter.” Today, the total market is worth a mere fraction, at around $1 trillion, with most of the market dominated by ethereum and bitcoin. In the years since, thousands of cryptocurrencies have launched. Bitcoin was launched in 2009 and was seen as a technological breakthrough in the area of digital cash.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |