The Characteristics of Cryptocurrencies
Updated: Mar 24
Very fast transactions assure the investors of the high quality of transactions without long procrastinations, without large deviations of the prices it offers. It's a real privilege of cryptocurrencies to be able to complete a trade in a matter of seconds or minutes on certain occasions. This feature gives the user confidence that the sales order will not be on a knife-edge in a high demand environment. The strategic investor benefits significantly from the short trading time as when the price reaches the level he wants he will be able to sell quickly with subtle advanced or decreased variations in price, or no changes at all. In case the demand is high, it can be seen both from the price and from the other factors that are carefully analyzed on a site of similar interest. He just needs to think seriously about whether to keep the cryptocurrencies or sell them. In short, if he believes that their price will rise more or if the high demand is the hot sun before the abrupt summer storm.
Complete anonymity of cryptocurrency users has created a security grid as to where money ends up buying and selling cryptocurrencies. It is indeed something pioneering in this area. The oldest transactions in a similar way were electronic currencies. But again, although the anonymity was significant, it wasn't as much as it is today. Complete anonymity plays an important role in their rapid development. Many prefer them as a means of investing quickly, while preserving the anonymity of investors or as a means of anonymous transactions. The former helps significantly the citizens not to be targeted in case of high profitability by the social environment who most likely won't have suspected anything from such closed-personal transactions of cryptocurrencies. The second part, anonymous transactions, is believed to have been used recently to fund various terrorist organizations in the Middle East. Fast and anonymous transactions can be used for cheaper transfers of ordinary citizens' money and as an investment field for aspiring investors or, unfortunately, for alien interests of paramilitary groups.
Not a few e-coins literally disappeared from the online market a few years ago. Investors' interest was exhausted and public opinion considered them rather indifferent to the investment game, after a fairly successful course. Nothing predisposed investors to an impending disappearance of these coins their astonishing progress at first. The incredible course of cryptocurrencies with big profits and big variations may also follow the unexpected course of e-currencies of 2000. E-gold is the most successful example of e-currency to date. Despite the collapse of e-gold, it has historically been a successful currency as an idea. The unclear legal framework of cryptocurrencies makes their course uncertain as to their legitimacy and therefore their future. No one can predict whether the interest in the future will be great, as well as their popularity. Surely the easy way of buying and selling will delay any bad or happy development. The future for now remains uncertain.
Any legislation on cryptocurrencies cannot, of course, be considered permanent. Cryptocurrencies are a new field of investment with an undeniably high risk. These controversial currencies are a battleground for economists around the world. If it's proven at some point that they can harm the world economy then they will be banned by many countries immediately. The legislative gap is certainly large. Can the holder receive a title deed of the respective cryptocurrency or can someone prove that the cryptocurrencies were stolen by a hacker when there is anonymity in transfers and holders or when the hacker has masterfully covered his internet tracks? How can the holder react to a possible ban or disappearance of cryptocurrency? We understand that cryptocurrency ownership is a peculiar legal situation. The paradox in this case is the people's trust in them, despite the serious disadvantage.
It's an undeniable fact that hacking is the greatest threat of 21st century internet businesses. Cryptocurrencies' hacking is easier by nature. Fortunately, cryptocurrency companies have very strong security systems in place to prevent this from happening. But the problem remains as the development of hacking techniques is constantly improving with unpredictable consequences. If hackers can at some point break the security systems of companies, there will be a global financial problem, as incredibly large amounts of billions of dollars are traded on a daily basis.
Fickleness is a powerful feature of cryptocurrencies. Some have higher inconstancy whether it is a rise or fall in prices. There are few cryptocurrencies with a relatively small variation in their prices. But everything is subject after a reasonable period of time to expected increases or decreases, i.e. within a range of prices. Public opinion is never changed at the same time by all members of society. The large increases in the total capital of cryptocurrencies in a short period of time are due not to a large number of people but to targeted investment moves of a few people. I am not saying that they are in agreement with each other, but the only explanation is this: Someone decides to invest-risk a lot of money in a cryptocurrency, so the price will go up and when he decides to sell at a higher price he will have a bigger profit and the cryptocurrency will be sold higher than expected . For example, in the past an investor could have 5,000 bitcoins with low value and when the price of one bitcoin reached $ 20,000 he sold them. So it certainly made a bigger profit and the 5,000 bitcoin transaction in a few minutes would be more than the expected number of cryptocurrencies sold by one cryptocurrency holder. In addition, it's a common practice when someone buys cryptocurrencies to sell them all and not a few or not to keep them for a long time, such as shares.
Of course, every person's cast of mind is different. What does happen, I truly wonder, not to each individual, but to a group of people who invest a lot of dollars in the online cryptocurrency industry? An absolute mess, if we don't take our own measures. A man from South Africa does not have the same goals and ethos as one from the US, and an American does not have the same goals as one from Vietnam. Everyone, however, has something in mind to achieve with the profit. American wants a house for $ 300,000, the South African wants a car for $ 10,000 and the Vietnamese wants a house for $ 7,000. Everyone has goals, but they are far from each other in terms of the value of the product. In the global game of cryptocurrencies involving people from all walks of life (eg rich, poor, petit bourgeois, etc.) you can't know where to stop. They may intend to sell at 300% increase or up to 5,000%. You also may not know it because it isn't known who and where buys cryptocurrencies, as long as there is anonymity. The game of cryptocurrencies presupposes the preparation of the next investment move based on the public opinion and perception of people from countries that invest a lot of money in them to know if the purchase of such cryptocurrencies is considered obsolete or an opportunity and respectively in terms of sale. The saying, when everyone sees something as an opportunity is not, applies to this investment sector.
Many factors contribute to the reduction of interest and bring doubts to market. We see that a variety of crises affect investments in the stock market of each country. In a global stock market the changes would be obvious and sometimes imperceptible. In a few cases they would be hidden and capable of creating a major problem for the economy and investment. The investment area of cryptocurrencies is like a global stock market. Political crises, economic crises, and unreliability can create a major crisis in cryptocurrencies. In fact, these crises may be kept hidden by increased investment in another part of the world. But no one knows what use the new owners will make and what their purposes are. It will definitely be different. But how much? A misuse for the time being will make the situation worse with a time delay. A bad use is their very short possession, since normally the price would have to fall, due to the crisis, the new investor would keep it or increase it. After a few days it sells the cryptocurrencies and the price is fragmented unexpectedly and even lower than expected, because the price has just increased and no one had realized the hidden crisis that affected it significantly.
Another fact is that many have resented big price fluctuations lately. Some people began to philosophize, some gave up the speculative game and some began to organize small or large investment plans for future investments. The latter create an organization chart of how they will react to each good and bad scenario. Conditions are changing in a way that no one expected and no one knows how to react to them. It will be difficult to predict prices, as many will change tactics before buying and selling. Therefore, many old investors will leave for a while, until they make sure their plan is creditworthy. The current situation isn't reminiscent of anything at the moment, when the total capital was 750 billion - 800 billion dollars. When will such moments come, again?
The ban on trading cryptocurrencies in Korea under conditions has caused confusion. This, unfortunately, came after a large investment by Korean and Japanese citizens. Confidence from the broad capital increase has grown rapidly. Everyone was expecting an increase in capital and prices. The unexpected was the huge and very short growth of cryptocurrencies. It all ended with the bans, which were made to prevent criminal acts using anonymity. Today the market is trying to adapt to the new data. Prices are not easily stabilized within reasonable limits for volatile cryptocurrencies. I don't think we have seen the maximum possible fall in prices. Confusion remains.