Today we have to talk about the falling of bitcoin and cryptocurrency prices because crypto is taking a massive beating right now. The overall crypto market is going down. Over the past 24 hours, bitcoin and other cryptocurrencies being down. One of the main catalysts for this is Elon musk stating that tesla will stop accepting bitcoin for car purchases.
Tesla accepting bitcoin per purchase legitimized cryptocurrency and legitimized bitcoin. You know Elon cut that out now. He said that he's looking for a cryptocurrency that uses less than one percent of bitcoin's energy. The second reason is that on Wednesday Bitcoin fell as much as 29% after China warned of risks associated with digital currencies. The third reason is the Turkish government has banned bitcoin and other cryptocurrencies in the country. All these reasons affect the crypto market, bitcoin, and other cryptocurrencies.
How does Bitcoin work?
Bitcoin is a digital currency that is not bound by any bank or government and users can spend money anonymously. Bitcoins are created by users who "mine" them by lending computing power to verify other users' transactions and receive Bitcoins in exchange. Many businesses are taking Bitcoin as payment, and some financial institutions allow it in their clients' portfolios, but overall conventional acceptance is still limited.
Bitcoins have to be stored in a digital wallet, exchanges, or offline hard drives using specialized software. There are about 18.7 million Bitcoins in circulation and only 21 million will ever exist, According to Coinbase.
Role of Elon Musk here.?
The fairly big role here. Elon announced in February that Tesla had invested $1.5 billion in Bitcoin. In March, Tesla began accepting Bitcoin as payment. Those decisions run up Bitcoin's price, and Musk also promoted Dogecoin.
However, last week Tesla would stop accepting Bitcoin because of the potential environmental damage from Bitcoin mining. Elon's statement sent Bitcoin falling and most cryptocurrencies' values going down. In response fellow billionaire Mark Cuban said that gold mining is much more damaging to the environment than the mining of Bitcoin.
A study by Munich and the Massachusetts Institute of Technology found that the Bitcoin network generates an amount of CO2 similar to a large Western city or an entire developing country. But a study from the University of Cambridge estimated that on average, 39% of "proof-of-work" crypto mining was powered by renewable energy, primarily hydroelectric energy.
Companies are using Bitcoin
Square and Twitter CEOs have been big supporters of Bitcoin. Overstock.com also accepts Bitcoin, and in February, BNY Mellon, a bank in the U.S., said it would include digital currencies and Mastercard said it would start supporting "select cryptocurrencies" on its network.
Bitcoin has more than 300,000 transactions that typically occur on an average day, according to the Bitcoin wallet site blockchain.info. Still, Bitcoin's popularity is little if compared with cash and credit cards.
Regulators aren't very worried about a possible crash in digital currencies. The European Central Bank said Wednesday that the risk of cryptocurrencies affecting the financial system's stability looks "limited at present." Earlier this month, the Federal Reserve survey found roughly one in five cited cryptocurrencies as a potential shock to the system over the next 12 to 18 months.
Washington officials have been talking about regulating digital currencies more. Gary Gensler, Chairman of the Securities and Exchange Commission said that cryptocurrency markets would benefit from more oversight to protect investors.
Gensler said neither the SEC nor the Commodity Futures Trading Commission, which he used to head, has a "regulatory framework" for trading on cryptocurrency exchanges yet, House's financial services committee earlier this month,. He also said he thought Congress would ultimately have to address it because "there's really no protection against fraud or manipulation."
How Bitcoin Launched.?
Bitcoin was launched in 2009 by a mystery person Satoshi Nakamoto. Bitcoin was then adopted by some. In 2016, An Australian entrepreneur claimed to be the founder of Bitcoin, but he did not "have the courage" to publish proof that he is. No one has claimed the inventing credit for the currency since.