Is Bitcoin (BTC) Better Than USD? - Global Coin Report
Connect with us

Bitcoin

Is Bitcoin (BTC) Better Than USD?

Published

on

Bitcoin

Despite all its recent progress, cryptocurrencies still do not inspire trust in a lot of people. Many view them as unsafe money, with its very nature being doubtful. However, a recent report by the Polish Academy of Sciences’ Institute of Nuclear Physics shows that situation regarding cryptocurrencies may not be as bad as it seems. In fact, the report claims that Bitcoin might even be a better currency than it looks like.

Bitcoin vs traditional money

Bitcoin, as many are already aware of, is the first cryptocurrency. It was created a decade ago and was officially launched in 2009. But, even though it has been around for around 9 years at this point, it is still largely mistrusted by a lot of investors, especially when it comes to large institutions.

However, thanks to the Cracow-based Institute of Nuclear Physics’ recent report, this common opinion might actually be wrong. The Institute has conducted a detailed statistical analysis of the BTC market and has published the results in a scientific journal called Chaos: An Interdisciplinary Journal of Nonlinear Science.

Surprisingly enough, the report portraits Bitcoin in a very positive light.

The report started by commenting on the credibility of traditional money. In the past, money that people have been using was backed by specific material commodities, such as gold. These commodities gave the money its value and served as a guarantee that the money actually has worth. This is not the case anymore, however, we still believe in the value of money due to the fact that it once had it.

Basically, this puts the traditional money in the same situation with cryptos. The difference is that cryptocurrencies never had a real-world asset to back them up. Instead, their value comes from investors’ belief in them. The same is true for traditional money these days, and both cryptos and fiat currency value are determined by what is happening to them, or rather — their markets.

What did the report find?

Throughout its short history, Bitcoin’s price has shown quite high levels of volatility. However, despite this, the price continued growing as more people learned about it and assigned it additional value. The Institute’s analysis studied these price changes in the period between 2012 and 2018. Initially, the received graphs did not show any promising results, with no real pattern being obvious.

Upon a closer inspection, however, the crookedness of the graphs was established to be a result of the first two years during which BTC’s behavior was analyzed. In short, the results were seemingly inconclusive due to attempts of the young market to shape itself. Soon enough, the rates of return — which the researchers decided to study first — fluctuated in accordance with the inversive cubic law.

Basically, this law means that the distribution is described by the inversion of the third power of the quantity that was examined.

After reaching satisfying results regarding the rates of return, researchers decided to move on to the problem of their volatility. After studying mature global markets, it soon becomes clear that the signs of returns are not exactly correlated. This is also exactly what was observed within the Bitcoin market as well.

The only real difference is that time correlations within traditional markets may be a bit more subtle. As a result, they often come in different forms of volatility clustering. However, volatility clustering is also associated with yet another feature, which is the system’s reluctance when it comes to changing trend.

This reluctance is best described with a certain parameter that is called the Hurst exponent. Basically, the Hurst exponent has values that range from 0 to 1. If a value is at 0.5, this means that the market has the same probability of going up or down. If the value is below 0.5, we can expect situations that will bring a sudden rise in value, but the probability of a later decrease gets increased as well. The same goes in the other way. However, if the value is above 0.5 then the changes are seen as persistent in nature, and every increase brings the possibility of yet another increase. Also, each drop means that another drop is more likely to come.

After studying the Bitcoin market, researchers deduced that the Hurst exponent approaches exactly 0.5. This is one of the biggest and most important characteristics of highly-reputable markets.

Another important feature that announces the market maturity is the so-called multifractal nature of the market’s characteristics. Simply put, multifractals are fractals of fractals. Basically, they are structures in which we can observe self-similarity, but only if different fractal fragments are brought to different speeds. Analysis of these multifractals revealed that certain dependencies exist on different scales.

In Bitcoin’s case, researchers found multifractality in rates of returns’ functions of fluctuations. This grew to be even more obvious during the last six months of the observation period (November 2017 – April 2018). This means that the results gained by observing Bitcoin are pretty much the same ones that can be gained from the stock, bond, oil, or even dollar markets.

Furthermore, the Institute’s Professor Stanislaw Drozdz also deduced that Bitcoin market’s most important statistical parameters indicate that BTC meets all the criteria that it needs to meet in order to be considered a mature financial market. Because of this, the professor believes that the Forex market, the largest market in the world, can soon expect a very real competition.

This also leads to some intriguing conclusions and observations. It is known that foreign exchange markets cannot mature without the help of governments or central banks. However, Bitcoin was capable of maturing entirely on its own, thanks to nothing else but its own characteristics. With that in mind, Bitcoin actually seems to be far more capable than the USD, or any other fiat currency, for that matter.

For the global insights every crypto trader must have, apply for Elite membership!

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.

Image courtesy of Pexels

Altcoins

3 Reasons Why WISE Token Could Be a Massive Winner in 2021

Published

on

WISE token

After working in proprietary trading for over a decade, I decided to transition to crypto in early 2017.  Although crypto is significantly different from traditional capital markets, I managed to successfully find a niche for successful and opportunistic trading.  While 2017 was the perfect time to get involved, the past few years have proven to be a bit more challenging as far as generating ROI.

Cryptocurrency traders have spent the past several years searching far and wide for the next big winner.  While the market as a whole hasn’t been very bull friendly, one specific area that appears to be gaining traction is decentralized finance, more commonly known as DeFi.  This area generally refers to the digital assets and financial smart contracts, protocols, and decentralized applications (DApps) built on Ethereum.  The reason why so many crypto entrepreneurs are flocking to this space is that it allows them to create traditional financial vehicles in a decentralized network, outside the meddlesome control of foreign governments.

One extremely popular DeFi project is Chainlink (LINK) which is a decentralized oracle network that provides real-world data to smart contracts on the blockchain.  Chainlink has seen its token price increase by more than 300% year-to-date.    Another impressive project in the space is Kyber Network (KNC) which has seen its token soar from $0.20 at the start of the year to more than $1.60 at present.  Kyber Network’s on-chain liquidity protocol allows decentralized tokens swaps to be…

Continue Reading

Bitcoin

The Pros And Cons Of Cryptocurrency

Published

on

cryptocurrency

Many facets of our lives are now digitized––money is no exception. 

Have you noticed that paper money is on its way to being obsolete because so many people receive direct deposit and love the simplicity of their debit card? 

Not to mention, cash carries germs, as we’ve heard lots about during the pandemic. Many businesses have turned to card only options in light of this. 

But what about cryptocurrency?

You probably heard everyone raving about it a few years ago, but the excitement’s calmed down quite a bit. That doesn’t mean that it’s not a viable option you should keep in mind. 

What’s Cryptocurrency? 

Let’s start with the basic definition of cryptocurrency so we’re all on the same page. Cryptocurrency utilizes cryptographic methods and complex coding systems to encrypt sensitive information during data transfers. This protects your funds and personal information on a whole different level. 

These transactions are virtually impenetrable due to the combination of mathematical and technological protocols created and put in place. This aspect of cryptocurrency is what makes it safer. Also, the details of transactions are kept private. No one can see who sent what, etc., because those rigorous mathematical and technological protocols protect it.

The Pros: 

Different From Traditional Banking Transactions

One thing people hate about traditional banks is the fact that they can…

Continue Reading

Bitcoin

As Global Tensions Grow, Bitcoin Price May Go Higher

Published

on

BTC Surged Again as A Safe Haven Asset During Global Tensions

  • India – China Border Conflict

After weeks of squabbling and brawling along their long-disputed border, hundreds of Indian and Chinese soldiers engaged in a deadly clash Monday in a river valley that’s part of the region of Ladakh last week. Troops had massed on both sides of the border in recent months in the northern India region of Ladakh and the southwestern Chinese region of Aksai Chin, causing global concerns of a potential escalation between the two.

  • North and South Korea Clash

Last Tuesday, North Korea destroyed the liaison office it jointly operates with South Korea in the city of Kaesong, just north of the demilitarized zone that separates the two countries. 

North Korea also said it would send troops to now-shuttered joint cooperation sites on its territory, reinstall guard posts and resume military drills at front-line areas in a violation of separate 2018 deals with South Korea. Jeong said South Korea will take “immediate, swift and corresponding” steps to any North Korean provocation.

The tensions grown in Asia and the potential “second wave” of coronavirus in the United States may add more difficulties to the global economic recovery. Thus, Bitcoin, as a safe haven asset, attracts more investors to buy and hold. 

Continue Reading

Press Release