Why Did Ethereum Face a Record Fall And What Should Investors Do?

In 2015, after the launch of the Ethereum blockchain, the cryptocurrency industry was transformed beyond recognition. In this article, we will talk about why Ethereum is such a unique product, how to mine it, and we will definitely  touch upon the urgent topic of the rapid fall of its price.

Content:
(please, click the topic to scroll down to it)

  1. Features of the second most popular cryptocurrency
  2. More about the Ethereum mining
  3. Why has the Ethereum price recently dropped so much?
  4. Conclusion

1. Features of the second most popular cryptocurrency

Ethereum project is not just a digital coin, it is also a full-fledged platform based on which you can create your own decentralized applications. Another feature of the project is the support of smart contracts, which can potentially be implemented in any sphere of life. Thanks to Ethereum, a number of new decentralized projects began to appear on the market, that, in turn, accelerated the development of the entire cryptocurrency industry.

Ethereum is much more innovative than Bitcoin, it is often called cryptocurrency 2.0. Some of the largest banks in the world are already starting to work with the Ethereum platform, as they see the capacity of it, for example, Sberbank of Russia. Ethereum is almost the main popularizer of the blockchain technology for various types of business. It is also worth noting that transactions in the Ethereum network take an average of 20-30 seconds, whereas in the industry leader (BTC) this rate is approximately 10 minutes.

2. More about the Ethereum mining

The Ethereum blockchain works on the PoW algorithm, so the coin can be mined by the usual way for most users, by installing computing equipment or by using the services of data centers. Despite the fact that the coin is very popular, the complexity of its network is not too great yet, in order to start mining it at home.

  • The block size of the Ethereum varies from 20 to 30KBytes;
  • The average time between blocks is 14.4 seconds;
  • Reward for the new block is 3ETH;
  • The complexity of the network is 3129P.

The coin can be mined either independently or by joining a mining pool. It should be said that the second option is much more profitable and useful unless you have hundreds of thousands of dollars of initial investments. Another option for the mining of the Ethereum is cloud mining. It certainly eliminates many worries associated with servicing the farm, but results in profit which is much lower.

3. Why has the Ethereum price recently dropped so much?

Due to the great popularity and unlimited emission of the Ethereum tokens, the project has an inflation rate of about 10% per year. Vitalik Buterin, on behalf of the entire development team, said about the sharding of the network and the transition to Proof-of-Stake (Casper) protocols, which will reduce inflation by almost 20 times.

According to the graph of CoinMarketCap, the Ethereum price has grown from $8.33 to $1 378 over the past year, which gives 16 500% of rise. Unfortunately, this year we see a reverse picture of what is happening. At the time of writing, the rate of the second most popular coin fell to a psychological mark of $200 per coin. There are a number of reasons for such a precipitous fall, which we will discuss further:

  • General correction of the market. All 2018 the bears rules on the market, so all the coins lost from 60% to 90% of their peak values.
  • Forced sale of the Ethereum. The ICO market is developing rapidly over the past years. New blockchain startups, which created their products on the Ethereum blockchain, collected investments in ETH. After a successful ICO, developers need to cash out some of these investments in order to develop their project. Mass sale of an asset entails a decrease in its value.
  • Competitors. The market is beginning to appear quite promising projects, which, potentially, can solve all the problems of their older brother, such as EOS, NEO, Tezos, Cardano, etc. Of course, they are still far from the brainchild of Vitalik Buterin, but this is a very fast-moving industry, where changes occur at the speed of light.

4. Conclusion

Ethereum is an innovative locomotive of the cryptocurrency industry. Almost anyone can create smart contracts and their own decentralized projects with its help. The coin certainly has a certain number of problems that hinder its further development. The development team is actively engaged in their solution.

The coin rate has fallen dramatically, but this is not a reason to panic and sell off your coins. Fundamentally, nothing has changed, the project is still one of the most innovative in the market, so with a high degree of probability, it will have a bright future. And the temporary fluctuations of the exchange rate can be nothing more than market manipulation of the bears.

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SEC Regulations and SEC Vision Are Two Completely Different Things: What Does It Mean for Ethereum?

sec and eth

The Securities and Exchanges Commission is the most influential organization in the US when it comes for crypto. If the SEC officially disapproves a project, this project is doomed. Crypto exchanges, crypto companies, ICO startups all comply with the mighty SEC.

However, it is important to distinguish when the SEC comes out with an official statement and when the SEC representatives declare their thoughts and opinions on a particular issue.

This is what the report published by Jay Clayton on the official website of the SEC is about:

Statements issued by SEC staff frequently include a disclaimer underscoring the important distinction between the Commission’s rules and regulations, on the one hand, and staff views on the other.”

This leads us to another thought. So far the crypto community was sure the SEC did not consider Ethereum a security on the official level. However, now it turns out that it was just the point of view of the abovementioned Jay Clayton.

Thus, Ethereum might still be a security after all. Hopefully, it will boost its exchange rate a little, since it hasn’t been particularly high these couple of weeks.

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Bitcoin Price Prognosis: How the Capitalization of the World’s First Cryptocurrency Will Change Over Time

bitcoin capitalization

We often hear different economic terms to be used in relation to cryptocurrencies – volatility, capitalization, price, value, etc. Today we are going to talk about Bitcoin‘s market capitalization and will see whether this digital gold really constitutes any significant part of world’s assets.

Contents:
(please, click the topic to scroll down to it)

  1. What is market capitalization?
  2. Bitcoin capitalization
  3. Prognosis
  4. Conclusion

1. What is market capitalization?

Market capitalization is quite a broad term. However, the first association that comes to mind is,of course, stock market. There is no single opinion on cryptocurrency but cryptocurrency can be called a financial tool that resembles both, money and shares. There is market capitalization of valuable securities, joint-stock companies and the whole market. Respectively,It is the price of a share, all shares issued by a joint-stock company and aggregated cost of all shares that circulate on the stock market. Back to the cryptocurrency, in simple terms market capitalization is an index of a total cost of all the coins. Market capitalization level depends on the cryptocurrency rate and they jump up and down together.

2. Bitcoin capitalization

Bitcoin is the first cryptocurrency in the world that was created in 2009. Today  more than 17 million coins circulate in the world and the maximum possible volume of mined BTC is restricted to 21 millions. Such a size of Bitсoin emission is layed down in the cryptocurrency code and cannot be changed. One of the important functions of this model is inflation prevention.  Only the fifth part of all the cryptocurrency reserve is to be mined and it will be done many years later. Considering the fact that every 210,000 mined block (one time in four years in average) slows down bitcoin mining two times when every new cycle begins. This formula allows to calculate that mining of 99% of all BTC will take 28 years and  mining of the last 1% will take more than 100 years!

However, back to the topic of the first cryptocurrency capitalization. In  2016-2017 Bitcoin became a synonym to bumper profit and goodwill. Digital currency was growing so fast that its holders didn’t have enough time to celebrate every new pick that the BTC rate reached day by day. Many people raised good money at Bitcoin and some people made even decadently big money,considering the fact that it wasn’t necessary to make efforts to gain the profit. The same way, cryptocurrency is associated with easy money, fast profit and other attractive things. At the same time there are more and more opinions about the significant impact that cryptocurrency has on world’s economy. Some are concerned that further development of uncontrolled decentralized financial systems are dangerous, while others think cryptocurrencies can create a really free economy of the future where everyone is their own central bank. However is cryptocurrency and Bitcoin in particular really a big issue for the world’s economy? In other words, is the digital gold really a big part of world’s capital? Well, figures from the CoinMarketCap can help figure it out.

So, today (mid-September, 2018) the total cryptocurrency market capitalization exceeds $190 billion which is by the way 4 times less than in late December, 2017 – early January, 2018. Back then the total cost of all coins circulating on cryptocurrency exchanges was almost $800 billion. It may seem really a lot, but in fact even back then the whole cryptocurrency market was worth less than just a single company – Apple. August 2nd, 2018 the total cost of all stocks of this company exceeded $1 trillion. Given that the stock market capitalization currently amounts to more than $65.5 trillion, cryptocurrency market capitalization looks rather small.

So what place does bitcoin have in the cryptocurrency market capitalization?

As a number of altcoins appeared and started developing, bitcoin dominance gradually decreased. In 2013 it exceeded 92%, and decreased almost by 10% until 2016. In summer 2017 bitcoin dominance was hardly 40% and Ethereum was snapping on its heels. Today BTC dominates, having 57% and the index started increasing since May, 2018.

Anyway, back in 2012 bitcoin market capitalization was only $0.06 billion while in December, 2017 it exceeded $336 billion. Today it is a bit higher than  $100 million and one BTC costs around $6.4 thousand.

3. Prognosis

As we already mentioned, the level of bitcoin market capitalization depends on the cost of every particular BTC. Today the cryptocurrency market seems to be starting to recover gradually from the rapid decline in the first half of 2018. At the same time, some experts believe that what we could observe in spring, 2018 was not really a collapse but just a correction of the rate after an unnaturally large increase in the end of 2017, when BTC was traded at $20,000 per a coin. In February, 2018, Jesse Powell, CEO and founder of a large U.S.-based cryptocurrency exchange called Kraken, told CNBC that capitalization of the cryptocurrency market could reach $1 trillion in 2018. So he basically expects it not only to recover lost ground but also increase its economic power. Moreover, it still remains an open question whether institutional investors finally “jump” into the cryptocurrency market, which will positively affect its capitalization. In July 2018, in a talk about bitcoin Maxim Balashevich, founder of an analytical company Santiment, told Forbes that “about a month ago we were just at the bottom of the 4th wave, and today we are in the 5th wave that should lead us to something between $25,000 and $50,000”.

4. Conclusion

So, can we expect a huge increase of bitcoin and cryptocurrency market capitalization in the longer term? Hard to tell. Anyway, today BTC`s capitalization is tiny as compared to the capitalization of stock market and it will probably take a long time for digital currencies to reach the level of huge public companies capitalization, even if they once again start increasing in value lightning fast.

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Do Not Sell Ethereum: Top Original Clothes Prints in Support of Cryptocurrency

Due to the latest changes in the cryptocurrency market and the news that Ethereum is dying, Vitalik Buterin is trying hard to support cryptocurrency. The Coin Shark editorial board also decided not to stay away and cheer the fans of ETH, as well as all holders of other coins. We present a selection of original things and accessories that we found on the web.

1. The Holy Vitalik

Vitalik Buterin, no doubt, has achieved incredible success in the field of cryptocurrency. Therefore, we completely agree with this image of Ethereum’s founder.


Source: https://www.redbubble.com

2. Almost Nike: JUST HODL IT

The famous slogan of the world-famous sportswear and footwear manufacturer Nike, suits the situation on the crypto market perfectly: just hodl ETH.

Source: https://www.redbubble.com

3. Do not let ETH go
It is sad to watch those selling cryptocurrency, and then, in the future, not only it restores its positions, but also grows in price. A girl with a balloon symbolizes a lost dream or, in this case, an Ethereum coin.


Source: https://www.redbubble.com

4. Time to buy Ethereum

These watches always show the right time. It’s time to buy cryptocurrency.


Source: https://www.cryptoclothe.com

5. Keep calm and hodl ETH

As you know, hodler is the slang name of an investor who buys cryptocurrencies and does not sell them, regardless of the situation on the market. This is what the well-known print reminds us of.

Source: https://www.cryptoclothe.com

Besides the images of Ethereum, various accessories, clothing and decorative objects are also produced in support of both Bitcoin and other digital coins.


Source: https://allthingsdecentral.com

 


Source: https://www.redbubble.com

 


Source: https://www.redbubble.com

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Hyperinflation in Venezuela and Petro Cryptocurrency

crisis in venexuela and petro cryptocurrency

By the year 2014 premises of a complex political and economic crisis have formed in the Latin-American state of Venezuela and just a few years later the country’s economy came to pieces. The number of those pieces is quite big and the evidence of that is the fact that Venezuela of 2016-2018 is often compared to Germany in 1921-1923, which is one of the most notorious examples of hyperinflation in the modern history. So, according to IMF, inflation in Venezuela can reach the index of 1.000.000%. However, as it often happens, millions of people stand behind percents, indexes and economic terms and these people are not happy about free subway, cut working hours and millions in their pockets.  

Today The Coin Shark will tell about economy in Venezuela, severe economic crisis and about efforts to overcome it, including the issue of a state cryptocurrency called Petro.  

Contents:
(please, click the topic to scroll down to it)

  1. How did it start?
  2. What is the situation today?
  3. What does it have to do with cryptocurrency?
  4. What is Petro?
  5. Will the cryptocurrency help Venezuela’s economy?

1. How did it start?

In 2013 president of Venezuela Hugo Rafael Chavez died, he ruled the country since 1999. The winner of the next elections was Chavez’s comrade-in-arms and present president Nicolas Maduro Moros. Economic problems in Venezuela deepend significantly in 2014 already. It is an open secret that the Latin-American state is a major oil exporter and the country’s economy directly depends on the market price on the black stuff. So, for example, in 1973-1974, when the oil prices on the international market grew significantly, Venezuela’s export income increased 400%. It gave the government an opportunity to implement plans on agriculture, energetics and heavy industry development. In the connection to the slip in prices on oil in 2014-2016 the effect was inversely related to the previous one – economic crisis deepened, GDP started falling, national currency continued to cheapen and people started experiencing food shortages.

Source: Bloomberg.com

The deep crisis started from energy sector and then spread across the whole economy. Back to the peak of the energy crisis state employees worked only two days per week for the country to save up electricity. In summer, 2018, citizens of the capital city Caracas started using the subway for free, as the state company that printed tickets had no money to buy imported materials.

2. What is the situation today?

This is just one of the examples of how the government tries to save currency resources. In the interview to the Deutsche Welle a venezuelan economist Pablo Rafael Gonzalez mentioned that strict currency control implemented by the government fixed all the prices at the once conducted evaluation.  
He believes that it has lead to the failure that we can observe now – 1 dollar costs 2,5 million bolivars. It is 17 times higher than the official exchange rate. A Venezuelan’s salary is 5,5 million bolivars. A kilogram of meat costs 10 million. Minimum price for bread on the country’s biggest island (Isla Margarita) is 1 million 400 thousand bolivars, according to the expert.

May, 2018 the country held presidential elections resulted in the expected victory of the current President Maduro. Leaders of G7, as well as some Latin America countries did not recognize the elections. In Venezuela it also boosted political crisis and resulted in new clashes between protesters and the government. The active protest movement started back in 2014, and as the result, supporters of the ruling party lost parliamentary elections in 2015. The situation is still extreme and some media has already started headlining their articles like Venezuela is on the verge of civil war. Indeed, these conditions do not allow to talk about possible economic upturn. According to IMF, Venezuela’s economy has reduced by 50% within five years of the crisis, which is the world’s most significant economic downfall in the last 60 years.

3. What does it have to do with cryptocurrency?

August 20th, 2018 Venezuela’s government carried out huge denomination of the national currency – it chopped as many as five “zeros” from bolivar. At the same time, bolivar was to be pegged against the state cryptocurrency called Petro.

Maduro assured that Petro “will help the country increase its monetary sovereignty” and overcome economic blockade, first of all the U.S. sanctions. According to Maduro, the cryptocurrency could help process transactions to find new budget sources. Maduro announced the plan to issue cryptocurrency in December, 2017.

March, 2018, Maduro announced that Petro’s pre-sale attracted more than  $5 billion, reported a local media. The was not much enthusiasm about the issue of this cryptocurrency in the world, news agencies headlined it as scam and Donald Trump issued an order prohibiting American citizens to purchase or use Petro.

4. What is Petro?

The idea of a strong currency backed by raw materials belonged to former president Hugo Chaves, reports Al Jazeera, as referred to the white paper published by the government. Since the national currency is pegged against Petro, it aims to overcome sanctions adopted by the U.S. The country allocated 5 billion barrels of oil to back its cryptocurrency. On May 23rd, Maduro announced that all citizens and companies could purchase Petro in exchange for yuan, rouble, Turkish lira and euro, as well as for Bitcoin, Ethereum, NEM.

A part of the cryptocurrency community is rather sceptical about Petro and says that this is a fake cryptocurrency controlled by the government and subject to corruption. Wired writes that Venezuela’s financial system – the currency backed by the cryptocurrency that is backed by oil – is actually scam on top of another scam.

5. Will the cryptocurrency help Venezuela’s economy?

The government claims that investments attracted through Petro, would help the country pay a part of its debt. Foreign trade minister Jose Vielma Mora claimed some Brazilian companies agreed to export foodstuff to Venezuela using Petro, though there were no official comments from Brazilia. It is clear that given deep systemic economic problems in Venezuela (including problems related to economic undermanagement), severe political and social crisis, the issue of the state cryptocurrency will hardly change the situation for better. At the same time, the real economic effect of the recently launched cryptocurrency is probably still to be determined.

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Cryptocurrency Prices for the 8th of September: ETH Is Falling Drastically

crypto prices

Bitcoin, Ethereum, Ripple, Bitcoin Cash, EOS, Litecoin, Cardano, Stellar, IOTA, Dash, Monero: Cryptocurrency prices today, September 8

According to the online platform Coin360, Bitcоin (BTC) added 0.67% over the past 24 hours. The price at the time of writing is $6518 per coin.

Cryptocurrencies remain in the green zone for the most part:

Bitcoin Cash lost 0.80% in the past 24 hours and costs $506 per coin;

Ripple added 0.87% and has a price of $0.29;

EOS grew by 1.55%, and its price is $5.16;

Litecoin increased by 1.51%, and its value is $57;

Cardano lost 0.40% and is worth $0.085;

Stellar became more expensive by 1.65% and costs $0.21;

IOTA added 2.78%, and its value is $0.59;

Dash gained 11.01, and its price is $196;

Monero grew by 0.46% and is worth $114.5.

Ethereum lost another 1.98% in the past 24 hours. The cost of the coin is $219.

The total market capitalization is $205 billion. Bitcoin accounts for 54.8% of the total volume. It is $112.5 billion in monetary terms.

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Vitalik Buterin Introduced an Updated Version of Ethereum

eth buterin

The world’s #2 digital coin has been going through some tough time recently. Yesterday its price reached one of the lowest marks in the history – around 225 USD. Given the circumstances, there had to be some measures taken to make things better.

And it happened. Vitalik Buterin posted a message on his Twitter:

According to the official Ethereum 2.0 article, the “new” Ethereum is going to integrate three main concepts:

  1. Sharding
  2. PoS (proof-of-stake)
  3. eWASM

The developers and researchers are working hard to make the whole thing work properly and, hopefully, they will succeed and bring new life into Ethereum:

There are many smart talented people working on making Ethereum awesome.”

We remind you:

Vitalik Buterin Reacted to the Statement that Ethereum Would Soon Collapse

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