Investors continue to sincerely believe that cryptocurrency is the most reliable tool, technology of the future, which can replace not only money, but also methods of data transfer. The beginning of this week for cryptocurrency was more than optimistic: +70 billion dollars. US capitalization (+ 25%), all cryptocurrencies TOP-20, without exception, over the weekend in positive territory, among the TOP-100, only 17 coins showed a decline. True, by the evening of Thursday 30.11, capitalization fell from 345 billion to 297 billion dollars. United States, in just 24 hours, only 17 cryptocurrencies showed an increase. The bubble of cryptocurrency is not yet blown away, but the amplitude of the waves is becoming more and more, indicating an impending storm.
Cryptocurrency vulnerability or why this tool is not reliable
Cryptocurrency is a new tool, that’s why it is so popular. Investors are fed up with classic tools, newcomers who have forgotten about MMM like fast, easy money making. The philosophy of cryptocurrency is built on the transparency of the system, on its reliability and the impossibility of forging a chain. But it is also built on anonymity.
1. ETH and ETS
The Ethereum network was created as a decentralized system in which you can create thousands of applications (projects) by analogy with the PTS. One of the first projects was the DAO crowdfunding platform, which allowed participants to identify the best projects and distribute investments by voting. The project was launched in May 2016, but on June 17 it was hacked due to an error in the code. There were two ways for the developers of Ethereum and the creators of DAO: to save investors and roll back transactions on the blockchain, or accept losses, thereby burying their reputation in the very first steps.
Ethereum developers chose the first path, thereby violating the main cryptocurrency philosophy. Those who disagree with it retained the source code, having broken off as a result of hard forks on Ethereum Classic (ETC). Both projects are still working successfully. But the conclusions are made:
- The blockchain can be changed at the request of interested parties and there is already a precedent. What will be the following precedent: the withdrawal of cryptocurrency by a court decision or something else – nobody knows;
- cryptocurrencies are vulnerable. We hear much less often that Visa or bank payment systems have been hacked, but we constantly hear about wallets and exchanges hacking, where millions disappear in one go. Cryptocurrency anonymity leaves hackers unpunished;
- there is no guarantee that developers and exchanges themselves are not to blame for hacking and theft. After all, this market is not regulated. A bubble of cryptocurrency can burst at any moment, as soon as someone needs it.
We have already talked about uncontrolled emissions in this article as an example of the cryptocurrency Tether. Despite the fact that some of the projects already appear with an emission limitation, the problem of a cryptocurrency bubble does not solve this. Traders do not have insider information; blockchain manipulation opens up scope for fraud. Do you still trust cryptocurrency?
3. ICOs that will never be implemented
Bitcoin makes up only 55% of the capitalization of all cryptocurrencies. Top 10 have a total of 85% capitalization. There is always hope that there will be a new project that will “shoot”. A beautiful view of White Paper creates demand. But who is responsible for the fact that the project will remain only a project? The first class action lawsuit on the Tezos project in November has already been filed. Who is next? Bubble cryptovalate deflates. When – just a matter of time.