The value of bitcoin (BTC) in rubles (RUB) reached an all-time high on Tuesday. What does that mean?
When comparing asset prices in several currencies, price feeds tend to understate the true picture, especially when one of those currencies is produced by a country that is subject to financial sanctions for its involvement in the invasion of Ukraine (and the other is magic internet money).
A glance at USD/RUB conveys the majority of the tale. On Friday, Feb. 25, the dollar was worth 84 rubles; on Tuesday, March 1, it was worth almost 114 rubles. Many ruble-priced assets might be expected to attain all-time highs in the near future if the devaluation trend continues.
However, a "bitcoin in ruble" increase of 37% would be explained by the ruble losing 37% of its value in US dollars (USD and its stablecoin equivalents represent the most used trading pair for bitcoin, so this is an OK assumption). Accordingly, it would be difficult to explain why the price of bitcoin rose by more than 55% from 3.2 million rubles to 4.9 million rubles (55 percent). Aside from that, the price of bitcoin in US dollars is still more than half of what it was at its peak.
Is cryptocurrency beneficial in the face of Russia's invasion of Ukraine?
When Russia invaded Ukraine, Bitcoin and the S&P 500 both plummeted – it didn't behave any differently than other important US stocks.
Now, the BTC-USD real-time of Market Cap is 739.684B.
Definition of Bitcoin
Digital asset Bitcoin employs public-key cryptography to record and sign transactions on the Bitcoin blockchain without the control of a central authority — all without the need for a central bank.
An unidentified computer programmer or group of programmers using the pseudonym "Satoshi Nakamoto" established the Bitcoin network in January 2009. If you want to send money via the internet or keep it as a store of value like gold or silver, you can utilize this peer-to-peer electronic payment system powered by bitcoin (lower case "b").
Due to the fact that each bitcoin contains 100 million satoshis (Bitcoin's smallest unit), each one can be divided up to eight decimal places. There is no limit to the number of bitcoins you can buy with only one dollar.
Even though Bitcoin's price is notoriously unpredictable, it has risen by a remarkable 9,000,000 percent between 2010 and 2020 to become the best performing asset of any type (including equities, commodities, and bonds).
50 BTC were put into circulation at a price of $0.00 when Satoshi Nakamoto mined the Bitcoin genesis block (the first block on the Bitcoin blockchain).
A block of 50 bitcoins was created every 10 minutes until November 2012, when the first halving event took place. When we talk about bitcoin halvings, we're referring about the issuance structure that Satoshi Nakamoto put in place when creating the cryptocurrency. Every 210,000 blocks, the number of new Bitcoins entering circulation is automatically halved.
By 2021, miners will be rewarded with 6.25 bitcoins each time they mine. Bitcoin block rewards will be halved to 3.125 bitcoins per block at the next predicted halving in 2024. With less supply of new bitcoin entering the market, this will make buying bitcoin more competitive, providing there is continued high demand for this digital currency.
For the first time, BTC's price equaled that of the US dollar in February 2011. For four months, the price of bitcoin continued to grow, culminating at more than $30, as new investors entered the market in response to the milestone.
Once Bitcoin had rebounded from a long term of bearishness in early 2013, it temporarily surged beyond $1,000. However, the Mt Gox attack, China's first ban on crypto, and other events delayed the recovery of the BTC price to above $1,000 for another four years. That threshold was crossed, though, and bitcoin's price proceeded to rise throughout 2017 until it reached its all-time high of $19,850.'
The crypto market as a whole fell into a year-long bear market known as the "crypto winter" in 2018. A new record high of $64,799 was not reached until bitcoin returned to the previous all-time high in December 2020. Over the next 119 days, it surged another 239 percent to beat the previous historical peak.
How does Bitcoin Work?
In the financial realm, Bitcoin and other cryptocurrencies are akin to e-mail. Without the use of banking intermediaries, the coin is exchanged directly between the sender and receiver without the need for a physical currency. Everything is done in the open, thanks to a distributed ledger known as a blockchain technology that is both transparent and immutable.
The following are some of the most important aspects of blockchain:
- On a public, distributed ledger known as the "blockchain," anybody can download and help maintain the records of Bitcoin transactions.
- No intermediaries are required for transactions to be sent from one person to another.
- They have full control over their own bitcoins if they choose to keep them in their own wallet. The holder's cryptographic key is required to access it.
- There is no such thing as a physical Bitcoin.
- There are only 21 million Bitcoins in circulation. It is impossible to create new bitcoins or destroy existing bitcoins.
- People can send and receive bitcoins on the Bitcoin network by entering their digital wallet's public key.
Each bitcoin has a transaction fee attached to it as a way to reward the distributed network of people verifying transactions in bitcoin (miners). It is the miner who first adds the transaction to a new block that receives the fee. If the fee attached to a transaction is high enough, it is more likely that a miner will process the transaction first.
Through the process of mining, every bitcoin transaction that occurs is permanently recorded on the Bitcoin blockchain. Application-specific integrated circuit (ASIC) chips are used by bitcoin miners to unlock the next block in the chain, a process known as bitcoin mining. Bitcoins can be obtained through mining, receiving them as payment for goods or services, or exchanging them for fiat currencies (such as the US dollar or the Japanese yen) or other cryptocurrencies.