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You can now buy a cup of coffee in a Swiss bar using Bitcoin's Lightning Network

We often hear different economic terms to use in relation to cryptocurrencies – volatility capitalization price, value, etc. Today we will talk about Bitcoin The market capitalization of will see if this digital gold will really constitute a significant part of the world's resources.

Contents:
(please, click on the topic to scroll down)

  1. What is market capitalization?
  2. Capitalization with Bitcoin
  3. Prognosis
  4. Conclusion

1. What is market capitalization?

Market capitalization is a fairly broad term. However, the first association that comes to mind is, of course, the stock market. There is no single opinion on cryptocurrency, but cryptocurrency can be defined as a financial instrument that resembles both money and stocks. C & # 39; is a market capitalization of precious securities, joint stock companies and the entire market. Respectively, it is the price of an action, all the shares issued by a public limited company and the aggregate cost of all the shares circulating on the stock market. Returning to the cryptocurrency, in simple terms, market capitalization is an index of the total cost of all currencies. The level of market capitalization depends on the rate of cryptocurrency and they jump up and down together.

2. Capitalization with Bitcoin

Bitcoin is the world's first cryptocurrency created in 2009. Today, more than 17 million coins circulate worldwide and the maximum possible volume of BTC extracted is limited to 21 million. Such a dimension of the Bitсoin emission is established in the cryptocurrency code and can not be changed. One of the important functions of this model is the prevention of inflation. Only the fifth part of the entire cryptocurrency reserve must be extracted and will be carried out many years later. Considering the fact that every 210,000 blocks extracted (once every four years on average) slows the bitcoin mining twice when each new cycle begins. This formula allows you to calculate that 99% mining of the entire BTC will take 28 years and mining of the last 1% will take more than 100 years!

However, let us return to the topic of the first cryptocurrency capitalization. In 2016-2017, Bitcoin has become synonymous with profit and goodwill. Digital currency was growing so fast that its owners did not have enough time to celebrate every new choice that the BTC rate reached day by day. Many people have collected good money in Bitcoin and some people have even made a lot of money decadently, considering the fact that it was not necessary to make efforts to get the profit. Likewise, cryptocurrency is associated with easy money, quick profit and other interesting things. At the same time there are more and more opinions about the significant impact that cryptocurrency has on the world economy. Some fear that the further development of decentralized and uncontrolled financial systems is dangerous, while others believe that cryptocurrencies can create a truly free future economy in which everyone is their own central bank. However, is cryptocurrency and bitcoin in particular really a big problem for the world economy? In other words, digital gold is really a big part of the world capital? Well, CoinMarketCap data can help you understand that.

So, today (mid-September 2018) the total market capitalization of cryptocurrency exceeds $ 190 billion which is still 4 times less than at the end of December 2017 – beginning January 2018. At that time the total cost of all currencies circulating in cryptocurrency trade was almost $ 800 billion. It may sound like a lot, but actually even then the whole cryptocurrency market was worth less than a single company – Apple. August 2, 2018 the total cost of all stocks of this company exceeded $ 1 trillion. Given that currently the market capitalization amounts to more than $ 65.5 trillion, the market capitalization of cryptocurrency seems rather small.

So which place does bitcoin have in the market capitalization of cryptocurrency?

[19659002] When an altcoin number appeared and started to develop, the bitcoin domain gradually decreased. In 2013 it exceeded 92% and decreased by almost 10% until 2016. In the summer of 2017 the bitcoin domain was barely 40% and Ethereum was recovering. Today BTC dominates, with 57% and the index has started to grow from May 2018.

However, in 2012 the market capitalization of bitcoins was only $ 0.06 billion while in December 2017 exceeded $ 336 billion. Today it is a little higher than $ 100 million and a BTC costs around $ 6.4 thousand.

3. Prognosis

As we have already said, the level of market capitalization of bitcoins depends on the cost of each particular BTC. Today, the cryptocurrency market seems to start to recover gradually from the rapid decline of the first half of 2018. At the same time, some experts believe that what we could observe in spring 2018 was not a real collapse but only a correction of the rate after an increase unnaturally large at the end of 2017, when BTC was trading at $ 20,000 for a currency. In February 2018, Jesse Powell, CEO and founder of a large cryptocurrency stock exchange in the United States called Kraken, told CNBC that the capitalization of the cryptocurrency market could reach $ 1 trillion in 2018. So it basically expects it not only to recover the ground lost but also increase its economic power. Furthermore, the question remains whether institutional investors "jump" into the cryptocurrency market, which will positively influence its capitalization. In a speech on bitcoin in July 2018, Maxim Balashevich, founder of an analytical society Santiment, told Forbes that "about a month ago we were at the end of the fourth wave and today we are in the fifth wave that should lead us to something between $ 25,000. and $ 50,000 ".

4. Conclusion

So, can we expect a huge increase in bitcoin and cryptocurrency market capitalization over the long term? Hard to say. However, today the capitalization of BTC is minimal compared to the capitalization of the stock market and it will probably take a long time before the digital currencies reach the level of huge capitalization of public companies, even if they once again start to increase in value quickly.

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