Cryptocurrency exchange rates
Cryptocurrency investment
A cryptocurrency is a digital asset that uses cryptographic encryption to guarantee its ownership and ensure the integrity of transactions, and control the creation of additional units, i.e. prevent someone from making copies as we would do, for example, with a photo. These coins do not exist in physical form: they are stored in a digital wallet.
Cryptocurrencies have several characteristics that differentiate them from traditional systems: they are not regulated or controlled by any institution and do not require intermediaries in transactions. A decentralized database, blockchain or shared accounting record, is used to control these transactions.
Regarding the operation of these digital currencies, it is very important to remember that once the transaction is made with cryptocurrencies, that is, when the digital asset is bought or sold, it is not possible to cancel the operation because the blockchain is a registry that does not allow deleting data. To "reverse" a transaction it is necessary to execute the opposite one.
What are the types of cryptocurrencies?
In addition to Bitcoin and Ethereum, there are other popular cryptocurrencies such as Axie Infinity (AXS), Filecoin (FIL) and Uniswap (UNIUSD), however, their value and popularity tend to fluctuate.
How are cryptocurrencies classified?
Cryptocurrencies can also be divided into four categories according to their specific characteristics. They would be privacy coins, stablecoins, exchange tokens and central bank digital currencies or CBDCs.
How is the value of a cryptocurrency determined?
How is the value of a cryptocurrency determined? The value of cryptocurrencies varies according to supply, demand and user commitment. This value is formed in the absence of effective mechanisms to prevent its manipulation, such as those present in regulated securities markets.
How to get cryptocurrencies
The international monetary system may be on the verge of major changes as a result of a combination of economic, geopolitical and technological forces. But it is debatable whether these forces will topple the U.S. dollar from its pedestal as the dominant international currency, a position it has held for much of the post-World War II period. The interaction of these forces will have far-reaching ramifications for the evolution of the world order because financial power is an essential element of symbolic power.
The dollar dominates every aspect of global finance. Virtually 60% of the foreign exchange reserves of the world's central banks, essentially their rainy day funds, are invested in dollarized assets. Virtually all commodity contracts, including contracts for oil, are priced and settled in dollars. The dollar is used to denominate and settle a large part of international financial transactions (see chart).
Have you heard about bitcoin mining before in English
The European Central Bank was one of the first bodies to define virtual currencies as "a type of unregulated, digital money, which is issued and generally controlled by its developers, and which is used and accepted among members of a given virtual community" (October 2012 Report).
There is no unanimity on the definition, as it is disputed whether it is a means of payment or a means of exchange. The nuance is important because if it is considered one or the other, prior authorization may or may not be required to operate for those entities whose activity is the issuance of virtual currencies.
Therefore, cryptocurrency exchange companies or platforms are not regulated in our legal system, nor are they supervised in any way, nor are they covered by deposit guarantee systems such as the Deposit Guarantee FundOpen in new window created by Royal Decree-Law 16/2011, of October 14.
The cryptocurrency business
Bitcoin has once again lost the $20,000 area after a weekend marked by falls. Central banking has made it clear at the Jackson Hole conclave that interest rates are going to continue to rise markedly and for a relatively long time, stifling the expectations of risk assets, which had seen a glimmer of light in the face of the improvement of some inflation indicators.
Since last Thursday, bitcoin has lost more than 9%, going from trading above $21,800 to fall this Monday below $20,000. The rest of the cryptocurrencies have suffered even greater drops. For example, Ethereum, the second largest cryptocurrency by market capitalization, has fallen nearly 15% since last Thursday, despite its epic comeback in previous weeks.
Central banking wants to put out the inflation fire and end the 'irrationality' of some asset market prices. Higher interest rates, together with lower liquidity, generate lower growth expectations at all levels, which affects to a greater extent those assets whose expected (future) growth was higher, i.e. those assets whose price reflected future growth to a greater extent than the present. A good example is cryptocurrencies. Now investors are questioning the price of these assets, generating strong selling pressure.