Cryptocurrencies in no hurry!!!
September 27, 2018 6:15 am,
Cryptocurrencies have crashed many times, but are in no hurry to gain back the lost ground. The reason lies due to some problems with the technology. Bitcoin has more than half its value in 2018 and late 2017.
In a recent study, the researchers have stated that market manipulation might have behind the Bitcoin steep increase in value in 2017. The New York’s General office has found quite a substantial risk that consumers who have invested in the virtual currencies could lose access either temporarily or permanently if there were any problems in the exchange. It was also uncovered that many of these exchanges have itself invested and traded in their own market, thereby creating a conflict of interest where they were trading against their own customers.
Cryptocurrencies like bitcoin were not made as a way to get rich, but to provide an electronic payment system that was more secure and resistant to fraud than credit cards and eliminated the need for trusted intermediaries like financial institutions. These virtual currencies are not controlled by a central authority like government or even a governing non-profit organization but instead were supposed to give the holder reliability of gold, without the inconvenience of having transfer a physical item to make a transaction.
Large industries have a reason to have hold and invest in these digital currencies for transactions with other multinational industries but for individual citizens to hold a virtual currency it is highly less secure and much more risky, much more vulnerable to sudden drop in values and more dependent on intermediary institution than fiat currency like the US dollar.
In this world of digital currency there are two kinds of intermediary institutions:
- First category is the exchange where users buy, sell and store their virtual currency. These include the Coinbase, which includes the platform which was reported to be investing in its own market and is now bankrupt.
- The second includes people and companies who create and sell their own currency using initial coin offerings. The 2 founders of Centra were arrested and charged with conspiracy to commit security fraud.
In engineering terms, it is not a bug, but a feature. The virtual currency, peer to peer lending and anonymity are all parts of engineering.