The World of Cryptocurrencies in 2020: the Main Events of the Outgoing Year
2020 is coming to an end. It has been very eventful both for the whole world and the cryptocurrency market in particular. During this period, a raft of key events took place.
So, what is worth reviewing?
Bitcoin halving and reaching the $20 000 mark
It was one of the most expected episodes of the outgoing year. In short, halving is a reduction in the mining reward by two times. During the two previous halvings, the reward dropped from 50 BTC to 25 BTC, and then to 12.5 BTC per block. This time, on May 11, 2020, the amount of the reward decreased again to 6.25 BTC.
Why do we need halving?
We all know how deplorable inflation might be. Halving is a way to avoid it, which makes Bitcoin depreciate. With the help of halving, the value of bitcoin increases. Indeed, mining becomes more difficult, thus, creating an artificial deficit.
Halving is conducted every 4 years. If we look at the trend of the currency price change, we see that after each subsequent halving it reaches its maximum value. Bitcoin has recently rocketed again and reached a long-awaited $20000 mark.
The update to one of the most popular cryptocurrencies was successfully launched on December 1st. The new version is designed to resolve network scalability issues and improve its security and efficiency. There will be four phases of Ethereum 2.0 development, but so far it has entered the zero stage only.
What can we expect from cryptocurrency?
Firstly, the developers are changing the Proof-of-Work algorithm to Proof-of-Stake. In the first case, each transaction is confirmed by miners, which significantly reduces the network bandwidth and creates a heavy load on it.
Secondly, the miners are replaced by validators — the network participants, who must have at least 32 ETH each. They are granted with access to the verifying network node. The replacement will significantly speed up transactions. Nowadays, more than 21,000 validators are already registered with the network.
Thirdly, in the first phase of Ethereum 2.0, the developers plan to implement sharding. Thus, the blockchain will be divided into separate groups of blocks, each of which will be processed by a separate server. This will be the main working solution to the problem of currency scalability.
Sharding will also significantly increase the security of the network. After all, any attacker will have to take control of each shard, which greatly complicates the task of hacking.
Once the developers will be able to put together the old version of Ethereum with the new one, the update will begin to function comprehensively and will be available to every user. This will happen during the second phase of Ethereum 2.0. As of now, the ETH rate is growing on a wave of anticipation.
In February 2020, the volume of assets of decentralized financial systems exceeded $1 billion. Almost a year later, this amount already exceeds $16 billion! What is going on?
DeFi or Decentralized Finance is an open and transparent financial service system based on the blockchain. It is available to absolutely anyone and works without the intervention of the country’s government. In such a system the user alone retains full control over his assets, interacting with the system using special applications.
Popularity of DeFi is growing with each passing day. In addition, various ways of making money with the help of DeFi projects are practiced today. This part of the cryptocurrency history is gaining adoption incredibly quickly and has great prospects for development in the future.
Banning TON and the creation of the Free TON community
After the unsuccessful launch of the main TON network, Pavel Durov’s adherents continued to work on the blockchain and presented users the analogue in the form of the Free TON system with the native TON Crystal token.
Not so long ago Chatex entered into a partnership agreement with the Free TON community. Chatex became the first crypto exchange in the world to support the TON Crystal cryptocurrency. The parties were united by a similar philosophy and principles of transparency and justice. Therefore, the cooperation has everything to become the cornerstone of the development of both systems.
Although 2020 was not easy, it became a huge leap in the development of our cryptocurrency world. During the COVID-19 pandemic bitcoin proved to be a defensive asset, cryptocurrencies attracted thousands of large and small investors, and the market turnover significantly increased. The moment when cryptocurrency is considered a ubiquitous means of payment has already come.
In any case, every person thought about adding several crypto assets to their wallet today. 2021 promises to be even more interesting. Happy New Year, dear friends! I wish you stability, prosperity, and, of course, the best of health.