Bitcoin loses one-fifth of its value and $ 1 billion worth of cryptocurrencies are sold

NEW YORK – Bitcoin lost one-fifth of its market value this Saturday, when a combination of profitability and macroeconomic concerns brought cryptocurrency sales to nearly $ 1 billion and more than $ 5 billion.

The currency fell 12% in the morning trade to US $ 47,495. At the end of the day, the fall was 22% to US $ 41,967.5.

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Widespread sales of cryptocurrencies led to a fall of more than 10% in Ether, the currency linked to the blockchain network Ethereum.

This Sunday, according to the special website coinmarket.com, the currency returned home with $ 49,000, causing a gap in valuation.

Based on the Coingecko cryptocurrency database, the market capitalization of the 11,392 currencies it tracks is down nearly 15% to $ 2.34 trillion, up from BRL13 trillion. That number briefly surpassed $ 3 trillion last month, with Bitcoin hitting a record $ 69,000.

Equations

The creation of new bitcoins, solved by supercomputers in milliseconds with the most complex equations, is connected through a parallel network on the Internet.

Competition

Every ten minutes, new mathematical equations are proposed to supercomputers that try to decode them. The first person to solve them gets 6.25 bitcoins

System

The answer to the equations (hash or proof of work) helps to organize the “inputs” of the ledger (blockchain), regulates the volumes of digital money transactions and gives them unique properties that prevent malicious code (malware) from cheating activity

Distribution

With all these precautionary measures, the miner ensures the continuity of the bitcoin creation process and receives the fees that users pay when they check the mine.

24 hours

Cryptocurrency mining takes place 24 hours non-stop. Therefore, due to the use of supercomputers, it consumes a very large amount of power, which requires constant power.

Huge energy cost

In the United Kingdom, the cost of virtual mining is already 113 TeraWatts / hour (TW / h) per year, according to data from the University of Cambridge. This year, Bitcoin miners are expected to spend about 130 TW / h on electricity or 0.6% of the planet’s electricity consumption.

Joint effort

Energy costs increase as miners organize themselves into groups to chase new bitcoin bits, increasing the computational power of the search and splitting the result when one of them first gets the mine.

China, or the center

According to Cambridge, the majority of bitcoin miners are now in China (65%), despite recent restrictions on the practice announced by the Beijing government. Only 39% of the world’s miners use sustainable and renewable energy resources for this process, so it is against the rules of the green economy.

The more money, the more money

In April alone, the Bitcoin mine earned $ 1.7 billion, or $ 56.7 million, a day, according to the Nasdaq Electronic Exchange website.

Fall is a week of volatility for financial markets. Global stocks and U.S. treasuries fell on Friday after data showed that U.S. job growth slowed in November.

In addition, the new corona virus variant, doubts about the spread of Ômicron, frighten investors.

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This Saturday, Bank Goldman Socks Decrease growth forecast Because of the potential impacts that could precisely change the U.S. economy in 2021 and 2022.

The sale comes next Wednesday before the testimony of executives of eight major cryptocurrency companies before the US House Financial Services Board.

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This is the first time that key players in cryptocurrency markets have testified before US lawmakers who are exploring best ways to regulate these assets.

Last week, the US Securities and Exchange Commission (SEC) rejected a second bid for an exchange-trading bitcoin fund in the view of Wisdom Tree.