Cryptocurrency Bitcoin hits $1 trillion in Market Valuation
New Delhi, Feb 22: The world’s best-known cryptocurrency, Bitcoin, on Friday became the first digital currency in the world to hit the market valuation (the value of the asset that is based on the price that would be paid if it is sold) of 1 trillion USD. Bitcoin’s value rose to USD 57,460 on Sunday, which was a whopping 18% jump in its value this week. Bitcoin’s value increased by 92% since Jan 1, 2021 when its value was recorded as USD 32,149.
What is a Cryptocurrency?
A cryptocurrency is a digital currency. It does not exist in the form of cash or coins. It is a type of digital money that allows people to make payments to each other without the need of a bank. They do not have any set value. Their value depends on the amount that the people agree to pay in the market.
How is Cryptocurrency made?
Cryptocurrency is produced through a process called mining using Blockchain technology. The cryptocurrency (e.g., Bitcoin) transactions that take place need to be authenticated by people in the network. This process of checking and confirming the transaction as real is known as mining.
| Rise in Bitcoins value in INR | |
| 20th Nov 2015 | 21598 |
| 20th Nov 2016 | 50403 |
| 15th Dec 2017 | 1259035 |
| 7th Dec 2018 | 242729 |
| 28th June 2019 | 818109 |
| 18th Dec 2020 | 1757332 |
| 8th Jan 2021 | 2954023 |
| 19th Jan 2021 | 4071560 |
What is a Blockchain technology?
Blockchain is a network of computers called nodes. All of these computers store the history of transaction taking place in that network. If a transaction occurs, all the computers in the network validate the transaction and put it in the network’s history of transactions. So, instead of one computer storing all the information, the information is spread across a network. All the transactions are made secure to save them from hacking using a technique called Cryptography.
Blockchain finds its use in not just mining cryptocurrency but also in Supply Chain & Logistics Management, Secure sharing of data, Retail Management, Digital IDs, Digital Voting, etc.
Reason behind Bitcoin’s rise in Market Valuation.
- Many private companies such as PayPal, Visa,Tesla, MicroStrategy (Worldwide leader in business intelligence) are beginning to invest in Bitcoin. This has built trust in the common people towards the cryptocurrency.
- Many governments around the world are working towards creating their own digital currency. As per the Indian Lok Sabha schedule, The Cryptocurrency and Regulation of Official Digital Currency Bill’ is drafted and ready for Introduction, Consideration, and Passing.The bill intends to create framework for an official digital currency issued by the RBI and regulate all the private Cryptocurrencies.
- Unlike the real currency like INR which can be printed when needed, Bitcoin is in limited supply. There are only 21 million Bitcoins that can be mined. There are already about 18.5 million Bitcoins in circulation. When miners successfully complete a transaction, they are rewarded with Bitcoins. Currently, the reward is 6.25 Bitcoins per valid block mined. This reward is halved every four years or after 2,10,000 blocks are mined. This technique of reducing the reward by half is known as Bitcoin halving. As there is a limited number of bitcoin available in the market, the demand is rising, resulting in rising prices.
- Cryptocurrency is becoming more accessible to the public.
Cryptocurrency Facts
- It is not a legal tender like the INR or USD.
- It is decentralized which means it is not regulated by banks or other financial institutions or anygovernment. No single entity is in charge of it.
- Its value is extremely volatile which means its price can skyrocket one day and can come crashingdown the next.
- Bitcoin was invented by an anonymous entity who went by the name Satoshi Nakamoto.
- Ethereum is second most valuable Cryptocurrency after Bitcoin.
Image Credit: Artist Ryzhi-Vector
The Absolutely Bonkers Case of Dogecoin!
Dogecoin is another cryptocurrency that has attracted a lot of interest lately, but for a reason that is absolutely bonkers!
The story goes like this –
There were two things that were gaining popularity in 2013, Bitcoin and Doge meme. Doge meme is a meme based on the hypothetical thoughts of a Shiba Inu dog. IBM software engineer Billy Markus and Adobe software engineer Jackson Palmer thought it would be funny if they combine the two trending phenomena – Doge and Bitcoin and make a new cryptocurrency, Dogecoin – as a joke.
Much to their surprise it became popular as soon as it was released. Over a million people visited Dogecoin.com in the first month of its release and generated a market valuation of USD 8 million. Dogecoin is worth USD 7.2 billion today. It is the fourteenth most valuable cryptocurrency in the market.
Bitcoin mining requires a lot of computers and therefore an incredible amount of power.
In Iceland more power is consumed by the miners mining cryptocurrency than by all the households combined usage.
