Part 2: What is Bitcoin, Blockchain, and Crypto?
There are thousands of different cryptocurrencies available on the market today, but still the most recognisable and popular is Bitcoin. It is also the most valuable in terms of worth per single coin. 1 BTC is currently valued at approximately £30,000.00, whilst its nearest competitor, Ethereum, has a valuation of approximately £2000.00 for 1 ETH.
Bitcoin’s dominance is in part due to it being the first cryptocurrency and the oldest, and partly due to its rarity from the finite volume in circulation. It’s also become synonymous and interchangeable with the term crypto, thus increasing its prominence in mainstream consciousness.
Bitcoin’s dominance is also in part due to the inherent trading pairs within the crypto ecosystem. To buy one of the many thousands of different cryptocurrencies, you cannot just purchase them with fiat money (dollars and pounds). You need to purchase a base coin like Bitcoin or Ethereum first and then trade these base coins for some of the other altcoins. Conversely, if you wanted to sell your altcoins for normal money, you would have to convert them back to the base coins first. Similarly, if you wanted to swap or trade an altcoin like Litecoin for another like Polkadot you would need to use an exchange that supports that trade pair, otherwise you would need to convert your Litecoin to Bitcoin first before converting to Polkadot. Therefore, Bitcoin maintains a stronghold in the crypto world.
Big spikes in the market fluctuation of Bitcoin have a huge impact on the crypto market in general and can signal a bull or bear market. Bull markets describe the market during periods of price increases, and bear markets during periods of price decreases. The most recent bull run occurred in 2021 culminating when the Bitcoin price soared to over £50,000.00 for the first time. It then crashed in Q1 of 2022 to lows of £25,000.00 before hovering around the £30,000.00 mark. Some analysts are already suggesting that we are now in a bear market and proclaiming an altcoin season — a term to describe when the top altcoins outperform Bitcoin over a sustained period of time.
Risk Vs. Reward
Investing in crypto comes with risks, and you should always do your own research before investing. There is always a possibility of losing your investment due to the volatile fluctuations of trading prices. There’s also the real possibility that you can lose your private key or it is stolen by hackers. Without your key, you cannot retrieve your digital assets, and there is no intermediary authority to reverse fraudulent activity. Despite these (read more)…
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