Bitcoin leads a crash in the cryptocurrency market

Unparalleled crash in the market of cryptocurrencies, led by the most famous of all, bitcoin, which sinks this morning by 18% and pulls other cryptocurrencies such as ripple, which drops almost 28% or etherum, which loses 23%. %.

The trigger seems to come from the fear that South Korea will increase regulation on these currencies. In particular, the South Korean government has announced that it will open a period of consultations before making the decision of a possible closure of bitcoin 'sites' and other popular digital currencies in the country.

Mainly, "it is the regulatory problems that plague the cryptocurrency with news about a greater offensive on the part of South Korea," says Think Markets strategist Naeem Aslam. However, this expert thinks that the complete prohibition of cryptocurrencies may be possible.

With the fall of today, bitcoin loses more than 40% from the highs reached in December around the $ 20,000. Just yesterday, the National Securities Market Commission added to the warnings of the US SEC to remember that the investment in critpomonedas has "considerably less protection for investors than traditional stock markets."

The warnings are in addition to the call made by many experts regarding the possible outbreak of a bitcoin bubble.

One of the criticisms of Bitcoin is that its mining (process of extracting virtual currencies) entails an estimated electricity expenditure of 41.42 terawatt-hours (as of last Saturday, January 13, an ascending figure from 33, 17 of last December 14), according to the Bitcoin Energy Consumption Index.

This happens by the own way of obtaining the coins, "through a process of 'proof of work', which consists in the resolution of complex algorithms" and requires the verification of numerous computer equipment, the Bitcoin specialist has explained to EFEfuturo. and "blockchain" technology - block chain - Alex Preukschat.

Bitcoin mining is the most energy consuming because, being the most valuable virtual currency (today about 11,700 euros), it is a greater incentive for miners.

For the economist and monetary policy expert Eduardo Garzón, it is an "energy waste" because, "although it is true that other devices such as washing machines consume a lot of energy", virtual currencies "play a role that conventional ones already do", has indicated to EFE.

But Preukschat has argued that, if another consensus model is applied, such as the 'participation test' that the Ethereum brand is developing, energy expenditure can be reduced, since this alternative model rewards the possession of coins and a node on "and not the resolution of problems.

According to this specialist, the "big question" is whether this model will work or not, that is, "if you can eliminate the double expense in a decentralized system where there are no intermediaries, which is the basis of Bitcoin", something that the model of 'proof of work' has been shown but with the 'proof of participation' not yet.

The Chinese brake

Among those who bet on the restrictions stands out China, which vetoed the cryptocurrencies last September to combat money laundering and other frauds, although, according to the report, this slowdown "will only slow down its adoption" in the Asian country, without reaching to stop her.

The countries that regulate in favor of cryptocurrencies are, among others, South Korea, Japan (where they are already recognized as a means of payment), Singapore and Switzerland, which seek to attract investment related to this industry.

However, critical voices have emerged from the traditional banking sector, including that of American tycoon and financial guru Warren Buffett, who this week declared that digital currencies will have "a bad end".

In Spain, the president of the supervisor of the markets, the National Securities Market Commission (CNMV), Sebastián Albella, expressed his concern about this issue and announced the launch of a working group together with the Bank of Spain to analyze the phenomenon , which is not under the supervision of regulators.

Even so, the enthusiasm for the bitcoin has also recently expanded in Spain, where a bitcoin store in Tarragona was put on sale for the first time this week, after a national company was pioneer in paying part of the start of the year. the payroll of its employees in this cryptocurrency, available in specialized ATMs.