“It was impossible and unsafe to store funds in the form of banknotes. There was a high risk of theft, we also had cases of looting. Therefore, I trusted a “stable and reliable” cryptocurrency. “Not for the sake of speculation, but just to save,” he says. The digital element Popovich chose in April was terra, a “stablecoin” whose value was supposed to be pegged to the dollar. It collapsed in May, sparking a turmoil in the cryptocurrency market whose victims are Popovich. He lost $ 10,000 (8 8,200). Q&A

How crypto works

projection What is a cryptocurrency? A cryptocurrency is a decentralized digital asset built on top of a blockchain. The first, and even larger, cryptocurrency, is bitcoin, and its blockchain is protected by miners using a proof-of-work system. But there are other cryptocurrencies. Ethereum is the second largest, and is used as a platform for the construction of other decentralized projects, such as fixed currencies, NFTs and dark. What is blockchain? The blockchain is the decentralized directory that tracks the ownership of a cryptocurrency or other digital asset. New transactions are added to the end of the blockchain and the use of cryptography contains a file of each previous transaction. There is no “official” blockchain, but the network as a whole is maintained consistently through a consensus algorithm as proof of work. What is proof of employment? Proof of work is the consent algorithm used to secure bitcoin, ethereum and many other major cryptocurrencies. He calls on the “miners”, who manage the computer nodes that make up the physical infrastructure of the blockchain network, to efficiently burn electricity to create digital lottery tickets. Every 10 minutes, one of these lottery tickets wins the prize – a cryptocurrency reward and the right to verify the next block on the blockchain. The system means that it is very expensive to attack a cryptocurrency head-on: you have to spend more electricity than any other miner combined. What is a miner? A miner is the person who executes a cryptocurrency node. They use specialized computers, called mining mines, to perform a specific mathematical function called “fragmentation.” The network treats the results of these fractions as lotteries and every 10 minutes a miner is declared the winner. For bitcoin miners, this prize is currently $ 125,000, which motivates the bitcoin network as a whole to the consumer about 130 TWh per year, around the use of electricity in Argentina. What is ethereum? The most important successor to bitcoin, ethereum is described by its proponents as a “global computer”: in addition to simple transactions, users can create “smart contracts”, small programs that run on the network. These smart contracts can be linked together to create entire “decentralized applications” that run without a single PC being responsible for them, and can also be used to create new cryptocurrencies and digital assets living on blockchain ethereum. instead of needing more miners and a new network. What is a stablecoin? A stablecoin, such as tether, USDC or UST, is a specific type of cryptocurrency that is intended to have a fixed value. They play an important role in the economy of cryptocurrencies, as they allow people to “cash out” risky bets without having to go through the hassle of converting money into conventional cash. But keeping value stable is difficult: it requires a large central bank to operate as a bank, maintain large reserves, and spend them to stabilize the currency. “Algorithmic” stablecoins, such as UST, also known as terra, have been attempted, but have an unfortunate tendency to enter a “death spiral” where a price crash leads to more insignia, pushing the price lower. What is NFT? An NFT, or non-exchangeable token, is a type of digital asset that can be traded as cryptocurrency, but is not “exchangeable” like money: one NFT is different from the other. Early NFTs looked like collectibles, such as digital soccer stickers, or used to market artwork, but their lack of functional utility led to the industry exploding and collapsing in 2021. The latest generation of NFTs is trying to focus on “utility”. membership or technological advantages for the holders.House Thank you for your response. Popovic says his losses were “catastrophic”, although donations from like-minded viewers on social media helped cover part of the deficit. He says: “I stopped sleeping normally, I lost 4 kilos, I often have headaches and anxiety.” Popovic is one of many experiencing the deep cold of this winter of encryption, more than four years after the cornerstone of the market, bitcoin, marked the first digital freeze since its inception. Cryptocurrency value chart It has since fallen sharply, but stopped frighteningly, with bitcoin falling below the $ 20,000 mark sometime this month – well below the nearly $ 69,000 mark reached last November. The fall was sharp and spectacular: a total purchase estimated at more than $ 3 trillion just six months ago is now worth less than $ 1 trillion.

Crypto boom: a new digital economy

The beginnings of the last cryptocurrency boom had all the hallmarks of being another example of the “Robinhood economy”, named after the popular American stock trading app. Bored white-collar employees stuck at home due to the pandemic lockdown, but full of disposable income, turned to day-to-day transactions as a way to spend their time. Subscribers to the r / WallStreetBets forum on the popular online chat site Reddit doubled during 2020 and then quadrupled in the first month of 2021 as a small army of retailers flooded in assets as diverse as the then-bankrupt Hertz car company troubled GameStop video game retailer and electric car maker Tesla, pushing the latter from $ 85 at the start of the pandemic to $ 1,243 by the end of 2021. Cryptocurrencies also benefited from the rise in daily trading. Bitcoin jumped from a low of $ 5,000 in March 2020 to more than $ 60,000 a year later. The currency has had this sharp rise in the past: in 2017, it had increased 20 times, to the then high of $ 19,000. But in the latest boom, ethereum, the number two cryptocurrency, had an even more impressive rise, from just $ 120 to a high of almost $ 5,000 in 2021. Bitcoin trading has exploded in the last decade. Photo: Sascha Steinbach / EPA Cryptocurrency is the name for every digital asset that works like bitcoin, the original cryptocurrency, which was invented in 2009. There is a “decentralized directory” that records who owns what, built into a “blockchain” that insures the entire network by ensuring that transactions are irreversible when they occur. Over the years, many variations have emerged, but the core – the concept of blockchain – is remarkably stable, in part due to the social impact of truly decentralized networks that are immune to government oversight or regulation. Where, 10 years ago, people were just talking about bitcoin trading, space has skyrocketed. In addition to the cryptocurrencies themselves, the sector has developed into a complex ecosystem. It includes Web3, a wider variety of applications and services built on cryptocurrencies, DeFi, an attempt to start an entire financial sector off code rather than contracts, and non-exchangeable tokens (NFTs) that use the same technology as cryptocurrencies to trade items and not money. The flood of money laundering in the world of cryptography has done more than just inflate the wealth of pre-existing shareholders’ papers. Instead, it led to a wave of interest and funding for the vast range of projects aimed at harnessing the underlying cryptocurrency technology. Blockchain businessman Vignesh Sundaresan, also known as MetaKovan, shows off the Beeple NFT he bought for $ 69 million. Photo: Roslan Rahman / AFP / Getty Images For a generation of young investors, the “decentralized financing” opportunities in the industry have been attractive. Built on top of the “programmable money” of ethereum cryptocurrency, “DeFi” [decentralised finance] The sector is an attempt to expand the replacement ethics of bitcoin to cover the entire economy. Take the relatively small segment of the encryption market known as NFT. Diagram of NFTs A product dating back to 2014, NFTs use the technology used to create cryptocurrencies, but allow developers to link unique assets to the blockchain, rather than money-like currencies. This means they can trade NFTs that represent works of art, virtual collectibles or even serve as tickets to events or club members. And like cryptocurrencies, they can be bought or sold on open stock exchanges, kept under pseudonyms and packaged or securitized in complex financial instruments. NFTs in the Bored Ape Yacht Club collection regularly sell for $ 1-3 million each. Photo: Property Of Nexo / Reuters An explosion within an explosion, individual NFTs were sold for silly sums of money in mid-2021. A coupon, representing years of work by digital artist Beeple, sold for $ 69 million. another, linked to the first tweet sent by Twitter founder Jack Dorsey, was bought for $ 2.9 million. Individual NFTs in the Bored Ape Yacht Club collection – the most consistently desired examples of NFT “profile photos” designed for use as a prepackaged electronic ID – regularly sell for between $ 1 million and $ 3 million each. But by early 2022, the NFT bubble seemed to have burst. The “bottom” prices for large NFT collections had plummeted and, while many large NFT acquisitions remained in private collection, those that were re-launched went bad: Dorsey’s tweet was …