Cryptocurrencies and Market Trend

Cryptocurrencies and Market Trend

Cryptocurrencies and Market Trend

Introduction

In recent times, there has been the talk of cryptocurrencies all over the internet, and every second more people join the cryptocurrency trend, and that is due to the fact that digital assets have proven to be more flexible when used, than fiat currencies. Furthermore, the cost of using cryptocurrencies as an alternative mode of payment is relatively lower than using fiat currencies, also transactions are faster and more efficient. Many businesses and people have begun to adopt the use of cryptocurrencies for various purposes, despite it’s not being a mainstream system yet. However, there are indications that in the near future, governments will have systems in place to regulate the operations of cryptocurrencies, and thus provide potential investors with investment securities in case things go awry in the future.

Market Research

There are various types of cryptocurrencies, each having its own function and value in the crypto market. The price of a cryptocurrency in the market is dependent on various factors, including supply, demand, volume, etc. Here is an overview of some cryptocurrencies and their current values on the cryptocurrency market.

  • Ethereum

    • Price: $484.66
    • Market Cap: $48.75 Billion
    • Supply: 100.58 Million
    • Volume: $1.47 Billion
  • Bitcoin Cash

    • Price: $749.50
    • Market cap: $12.91 Billion
    • Supply: 17.23 Million
    • Volume: $320.62 Million
  • Litecoin

    • Price: $82.26
    • Market Cap: $7.69 Billion
    • Supply: 57.33 Million
    • Volume: $574.58 Million
  • Monero

    • Price: $136.92
    • Market Cap: $2.22 Billion
    • Supply: 16.21 Million
    • Volume: $31.43 Million
  • Dash

    • Price: $237.97
    • Market Cap: $1.95 Billion
    • Supply: 8.18 Million
    • Volume: $213.53 Million
  • ZCash

    • Price: $170.76
    • Market Cap: $736.87 Million
    • Supply: 4.32 Million
    • Volume: $36.18 Million
  • Aeternity

    • Price: $2.05
    • Market Cap: $478.58 Million
    • Supply: 233.02 Million
    • Volume: $7.31 Million
  • Bytom

    • Price: $0.364221
    • Market Cap: $365.13 Million
    • Supply: 1.00 Billion
    • Volume: $60.97 Million

These are just a few of the cryptocurrencies, and it is clear that their value differs. Furthermore, the prices of the cryptocurrencies are not fixed, as they fluctuate based on the increase in demand for the digital assets.

Strength and Weaknesses

Every system comes with its strength and weaknesses, so does cryptocurrencies, and knowledge about its strength and weakness will help make better decisions when investing in digital assets.

Cryptocurrencies and Market Trend

  • Strengths

    • Decentralized: No 3rd parties involved, and transactions happen on a peer-to-peer basis without any type of interference from 3rd
    • Quick Payments: Payments happen within seconds because it bypasses all the usual procedures that a traditional bank would normally go through.
    • Zero or Near Zero Fees: As opposed to the traditional banking system that charges exorbitant fees for transactions, Cryptocurrencies attract very low fees, and zero fees in some cases.
    • Security: Being cryptographic translates to having a military-grade security system to prevent unauthorized access and theft. Furthermore, creators of cryptocurrencies add other security protocols to ensure total security.
    • Easy to Use: There are many unbanked people, and that is because banks have made it very difficult for the people to use banks because there are too many processes involved.
    • Cross-Border Transactions and International Trades: It is no news how bank transactions across borders usually take days to clear, the case is however different with cryptocurrencies, as cross-border transactions and transfers can get confirmed in seconds. This is a good way to encourage international trade, as it is effective and very easy
    • Identity Theft: Identity thieves are always on the prowl all over the internet looking for identities to steal via their credit card information provided by individuals online. Cryptocurrency users need not worry about their identities as it is not necessary for crypto-based transactions.
  • Weaknesses

    • Highly Volatile: Cryptocurrencies because they are not regulated can be very volatile, and this has contributed to preventing many people and businesses from investing in cryptocurrencies, as there is an uncertainty about its future.
    • Irreversible Payments: If payments are made in error to a wrong crypto address, then the person loses the money, as payments and transactions made on the blockchain technology cannot be reversed.
    • Scaling: This has been a prevailing flaw for cryptocurrencies, and the contributing factors are the speed and number of processes that can go on at a time.
    • Difficult to Understand: This is a new technology, and there are only a handful of professionals in it, the problem, however, is that there are intricacies about it that make it difficult for people to understand, and as such discouraged people and investors from investing in it.

Cryptocurrencies can cause a paradigm shift in businesses and the financial industry if adopted fully, however, for full adoption, crypto developers need to deal with the weaknesses of the system and convert them to strength.

Technical Overview

  • Cryptographic Hash Algorithms

A cryptographic hash algorithm or function is an algorithm whose responsibility it is to convert a specific value to another value that cannot be reversed. Cryptocurrencies are made using different hash algorithms and some of them include:

  • SHA-256
    • This is a 256 bits hash algorithm that was constructed by Merkle-Damgard.
  • CryptoNight
    • An algorithm that is a function of the Proof of Work (PoW) consensus protocol and can function on ordinary CPUs.
  • X11
    • This is a hashing algorithm developed by Evan Duffield and uses the Proof of Work (PoW).
  • Equihash
    • A Proof of Work (PoW) algorithm that requires the use of lots of computer memory for its functionality.
  • Cuckoo Cycle
    • A graph-theoretic algorithm based on the Proof of Work (PoW) system with low memory usage, and instant verification.
  • SM2
    • This is an algorithm for digital signatures, and functions as a protocol for exchanging crypto keys.
  • SM3
    • This is a function that was created by Xiaoyun Wang and others and is used as an integral part of the authentication service system. The Chinese Commercial Cryptography Administration Office published it. Its construction is Merkle-Damgard and it is 512 bit for a 256-bit hash.
  • Different FPGA/ASIC Implementations and Production Costs

Field Programmable Gate Array (FPGA) is an integrated circuit that is custom built and specifically created for the mining of cryptocurrencies. The FPGA enhances the miner’s performance, and this contributes to making the FPGA much better than GPUs and CPUs. On the other hand, the Application Specific Integrated Circuit (ASIC) was created primarily as a cryptocurrency miner and has the ability to mine different cryptos including bitcoins at very high speeds while consuming very little power.

These systems have been implemented in different ways, with different results, some of which include:

FPGA

  • Bitcoin Dominator X5000

Hash rate (Mhash/Sec): 100

Efficiency (Mhash/Joule): 14.7

Efficiency (Mhash/second/dollar): 0.22

Power (Watts): 6.8

Price: $440

  • Bitforce SHA 256 Single

Hash rate (Mhash/Sec): 832

Efficiency (Mhash/Joule): 10.4

Efficiency (Mhash/second/dollar): 1.38

Power (Watts): 80

Price: $599

  • Butterfly labs Mini Rig

Hash rate (Mhash/Sec): 25,200

Efficiency (Mhash/Joule): 20.16

Efficiency (Mhash/second/dollar): 1.64

Power (Watts): 1,250

Price: $15,295

ASIC

  • AntMiner S1

Hash rate (Mhash/Sec): 180,000

Efficiency (Mhash/Joule): 500

Efficiency (Mhash/second/dollar): 800

Power (Watts): 360

Price: $299

  • ASICMiner BE Blade

Hash rate (Mhash/Sec): 63,000

Efficiency (Mhash/Joule): 1,000

Efficiency (Mhash/second/dollar): 1658

Power (Watts): 63

Price: $350

  • Avalon Batch 1

Hash rate (Mhash/Sec): 66,300

Efficiency (Mhash/Joule): 107

Efficiency (Mhash/second/dollar): 52.34

Power (Watts): $620

Price: $1299

From the list of miners mentioned above, it is clear that production rates and costs favor ASIC miners more than the FPGA miners.

Conclusions

The cryptocurrency market is beginning to get very competitive, as more people and businesses are getting aware about the advantages of using cryptocurrencies, and every day more people invest in cryptocurrencies. At the moment, Bitcoin still leads the list of the most valuable cryptocurrency, and many want to be Bitcoin owners, it was a good move by early investors who had some foresight and invested in it when the value was still a single value, as over the years it has made a lot of early investors, millionaires. Bitcoin is a very good coin to invest in, as it is very valuable, and the value keeps increasing exponentially.

For people looking to invest in cryptocurrencies as a long-term investment, some cryptocurrencies that are good for such type of investments include Bitcoin, Ethereum, Ripple, Monero, Dash, Litecoin, NEO, ZCASH, Ethereum Classic, and Steem among others.

When the mining of cryptocurrencies was introduced, it was a very tasking process, and the miners could only mine one type of cryptocurrency at the time, but over time, with the inputs of developers and engineers, systems were produced that had the ability to mine multiple cryptocurrencies. At the moment, there are different miners with the abilities to simultaneously mine different types of cryptocurrencies simultaneously without going through the hassles of changing hardware. It is possible to create a single miner capable of mining different types of cryptocurrencies, and all that may be needed could be a change of firmware, however, this will be dependent on the type of miner and its capabilities.

When investing in cryptocurrency mining hardware, it is very important to check the profitability based on the cost of the miner, the hash rate, the power consumed, and the hash per power, as this helps you know the type of mining technology to go for, and in light of this, the ASIC miners have proven to be more economical and efficient over the FPGA miners, hence, you have more people opting for the ASIC miners, and mining hardware manufacturers have capitalized on this and are producing more efficient and affordable ASIC miners to enhance productivity and profitability.

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