Posted on: August 12, 2022 Posted by: admin Comments: 0

The digital currency is in vogue and specialists say that it is a good refuge to avoid fluctuations in periods of high inflation or economic instability. However, investing in it requires knowledge and caution, because while it is highly secure, almost insurmountable, it is volatile.

During the last few weeks, the market for the most famous cryptocurrencies, such as bitcoin, has been in a tailspin. The coin, which at its peak cost more than 60,000 dollars, is already below the psychological barrier of 20,000 dollars, and there is no certainty that it will recover in the short term. This year alone it has already lost half of its value. So it remains to ask, what is the future that holds for bitcoin and is this the best time to invest? However crypto exchange transactions are showing an upward trend and even though Bitcoin is experiencing instability, many people are still optimistic about its existence and other cryptocurrencies.

A cryptocurrency is a digital means of exchange that fulfills the function of a currency, which in this case is not tangible. To secure its financial transactions, control the creation of new units and verify transfers, it uses cryptographic methods, that is, techniques that ensure that its encryption and coding are unintelligible to third parties to whom the message is not intended. In other words, they guarantee confidentiality and make hacking almost impossible.

Just as the pandemic accelerated many virtual processes, it did the same with digital currencies, which have gained ground in the last two years. Because they are global, largely secure and, as some connoisseurs say, even democratic, in the sense that they are available to anyone.

Cryptocurrencies: why they've crashed and what it could mean for their  future

Currently, cryptocurrencies, despite being a complex instrument, are very close to the new generations, who invest in them and bet that they will become the universal currency of the not too distant future.

For now, the problem is that they generate resistance, like all changes in the evolution of money. The beginning of money was exchange, barter. But it turns out it was perfect until the guy who had chickens and wanted wood ran into one who had wood, but wanted fish and not chickens. There was a very big inefficiency.

The conception of money as paper was born in the year 806, approximately, and at that time it was very rare for people. Today, cryptocurrencies are nothing more than a world currency, but since they do not have a central bank as endorsement, that generates distrust in people. But as blockchain applications expand, the Ethereum price, Bitcoin price, and the prices of other established cryptocurrencies remain in “stability.”

Now we are moving to a world with a base of digital services and goods, where there is an interaction of money between different currencies, since the world does not have an international banknote. The problem is that we will never know the true value of a cryptocurrency if we do not have the capacity to occupy it in the market. But over time, digital currencies are becoming more and more accepted and their value can be predicted with more accuracy.