CRYPTOCURRENCY is the new buzzword of 2018 with currencies such as bitcoin and Ripple surging from strength to strength - albeit with falling prices today. But what is a cryptocurrency and how does it work?
The first cryptocurrency that was ever created was the bitcoin, which started in 2009 and is still the most famous digital cash.
There are now more than 1,000 available online with bitcoin prices rising to $ 20,000 in early this year.
Bitcoin prices today dropped dramatically and dropped over half of its value since the $ 20k recorded on January 18th.
While the Ripple values also fell down and fell to $ 0.65, when the XRP crashed back to December prices.
What is cryptocurrency?
Cryptocurrency is best seen as digital cash - looks like using Paypal or a debit card, except instead of paying in pounds or dollars, you use a particular crypto as bitcoin or Ripple.
Cryptos only work in computers, and transactions are recorded on a digital public largebook called a blockchain - which is encrypted, why it is called a cryptocurrency.
The biggest difference between crypto currency and bank credit is that there is no intermediary as a bank.
So instead of banks and governments that issue the currency and keep records, an algorithm makes it all for you.
How does Cryptocurrency work?
Cryptocurrency technology allows users to make payments and save money on the internet without having to use their name or a bank.
Transactions can be performed between peers from "cryptocurrency wallets". These are then registered on blockchain.
It works by matching public codes that relate to user-owned private passwords - known as keys - used instead of names.
Individual devices are created through a process called mining, which involves using a complicated computer program to solve online mathematical problems or algorithms that generate coins when answered correctly.
Users can also buy the currencies from brokers and then save them and use them using cryptographic wallets.
Cryptocurrencies are known to be secure and provide a level of anonymity.
Transactions can not be fake or reversed, and there are tend to be low fees, which means that it is a more attractive way to make online purchases.
Why are crypto prices falling today?
Experts have identified a number of possible causes of the accident, which saw prices around $ 445billion down from highs less than a month ago.
The market is still on its way from revelations that cryptocurrency Tether may have been manipulated after the Bitfinex Exchange was judged by the US Commodity Futures Trading Commission.
Bitfinex was hit by the application a month ago, although the news did not reach investors until this week, which could have gotten the mass of sales.
Tether is affixed to US dollars, so $ 1 buys a Tether token, but investors fear Tether Limited does not have the reserves of USD needed to support its market price of 2,177%. Ticket, and that Tether has flooded the market without being put on dollars all.
Mati Greenspan, market analyst at eToro, told Business Insider: "The claim is - and the requirement has grown lately - that they do not have these reserves.
"They have not been incredibly transparent about where they hold them and how much they are in different places."
While a recent report also suggested bitcoin could jump up as much as 80 percent if the claims are correct.
Cryptocurrencies received another blow yesterday when the Indian Finance Minister proposed that he wanted to "eliminate" the use of digital assets for payment purposes.
