Interesting Facts About Cryptocurrency Worth Knowing
The digital asset market continues to experience high volatility. The value of the cryptocurrency market exceeded $1 trillion for the first time in its 12-year history.
According to the cryptocurrency analysis service, the value of one of the most popular cryptocurrencies – bitcoin (BTC) – reached an all-time high of over $39,000 on January 7. Over the year, bitcoin has risen several times: back in March, its price was $5,000. Bitcoin’s market capitalization broke the $700,000 mark for the first time, and the total market capitalization of all cryptocurrencies now exceeds the combined value of such payment systems as Mastercard and Visa, according to Independent calculations. According to Konstantin Anisimov, -executive director of the CEX.IO cryptocurrency exchange, the digital currency will become increasingly attractive to institutional and private investors. The expert suggests that the value of BTC will continue to rise in the near future and reach $50,000 by the end of the first quarter of 2021.
Other cryptocurrencies, including Ethereum, Litecoin and Bitcoin Cash, have also risen in value over the past few months. In particular, Ethereum, the so-called ether, the second most capitalized cryptocurrency, has risen more than 600 percent in a year. It is now worth more than $1,200. Ethereum is an open platform with a built-in programming language that allows developers to create their own blockchain applications.
WETH cryptocurrency also runs on the Ethereum platform. WETH is needed to exchange ETH tokens compliant with the ERC-20 standard through decentralized platforms such as Radar Relay. Since Ethereum-based decentralized platforms exchange tokens between- users based on smart contracts, tokens belonging to all exchange participants must meet the same standard. Only in this case token exchange will occur correctly and without losses.
The exception in the growing digital currency market was Ripple: its value more than halved in the last month. This is due to the fact that the U.S. Securities and Exchange Commission (SEC) accused the company of violating the Securities Act passed in 1933. The SEC alleges that Ripple raised more than $1.3 billion by selling unregistered securities under the guise of digital assets.
The first federal cryptocurrency bank appeared in the U.S.
U.S. startup Anchorage, which offers digital currency storage services, became the first federal cryptocurrency bank in U.S. history. The company was licensed by the Office of the Comptroller of the Currency (OCC), which is part of the Treasury Department. Anchorage President Diogo Monica said the company is a national bank, but unlike other financial institutions, it works with cryptocurrency assets. He added that once Anchorage is authorized by the OCC, it will be subject to federal laws rather than individual state laws, which will make its operations much easier.
In September 2020, U.S. cryptocurrency exchange Kraken also received a banking license. The company’s customers can now use digital assets to pay bills and investments, as well as receive their salaries in them. Currently, the company serves customers in the state of Wyoming. However, it hopes to become a “bridge” between- the cryptocurrency market and the traditional economic system and to scale its operations worldwide. In 2018, Russian banks also declared their willingness to work with crypto-assets, but they are hindered by the lack of legislative regulation.
Mining harms the -environment, but more and more “green” cryptocurrencies are appearing in the world
In 2019, scientists from the Technical University of Munich calculated that the blockchain network serving bitcoin consumes 45.8 TWh of electricity annually. As a result, 22 to 22.9 Mt of CO2 is emitted into the atmosphere each year. This is comparable to the carbon footprint of countries like Jordan or Sri Lanka. The researchers noted that the amount of electricity consumed by cryptocurrency is constantly growing, which is due, among other things, to the development of technology.
Initially, miners used ordinary personal computers with a processing power of 0.01 GH/s (gigahertz per second, the number of combinations that the equipment can process per unit time) and energy efficiency of 9 thousand J/GH (joules per gigahertz, the unit of energy per unit of computation). They have now switched to dedicated IC-based systems with up to 44 thousand GHz and 0.05 J/GH efficiencies. The researchers also found that 68 percent of the capacity is concentrated in Asian countries, 17 percent in European countries and another 15 percent in North American countries. They noted that the carbon footprint of cryptocurrency mining needs to be controlled. This is especially important for countries where' electricity production is associated with a lot of emissions. To make the process of cryptocurrency mining more -environmentally friendly, according to scientists, it is possible, among other things, by transferring mining farms to renewable energy sources.
More and more cryptocurrencies are appearing in the world right now that are designed to improve the -environmental situation. For example, the American company KWHCoin has created a digital currency of the same name, which can be obtained in exchange for electricity from renewable sources. The platform is based on blockchain technology and allows to simplify the process of buying and selling clean energy. A similar cryptocurrency, SolarCoin, aims to develop solar energy. Energy producers register their installation and open a wallet that acts as a bank account. For every MWh of energy produced, they receive one Solarcoin, which is now worth $0.016. Another “green” cryptocurrency is EverGreenCoin: anyone who buys tokens supports renewable energy, water conservation, health and land use projects around the world.
Cryptocurrency has no official status in most countries of the world
The legal status of cryptocurrencies varies from country to country. For example, in Japan, bitcoin was recognized as a means of payment back in 2017. This currency can be paid for in some stores, including online venues, beauty salons, cafes and restaurants.
In Switzerland, a “Blockchain Law” is being developed to facilitate the development of decentralized financing. In particular, companies will be able to issue digital analogues of stocks and other tradable assets.