At the moment, few people inspire confidence in cryptocurrencies. However, an extensive statistical analysis of the Bitcoin market, carried out at the Institute of Nuclear Physics of the Polish Academy of Sciences in Krakow, showed that it is not much different from respected traditional currencies. All indications are that Bitcoin is a much better currency than it appears at first glance.
The very first and most popular cryptocurrency is still perceived by many investors with some distrust. The results of detailed statistical analysis of the Bitcoin market contradict this skepticism. An analysis published in the renowned academic journal Chaos shows Bitcoin - and other cryptocurrencies - in a positive light.
The trust of the general public in traditional currencies appears to be largely the result of their evolution.
We believe that since concrete material goods were once used to support money, this is still the case.
However, from a physical point of view, traditional currencies have long been the same as cryptocurrencies since their inception - just bits of information in the memory of bank computers. The real value of a currency is no longer determined by anything that supports it, but primarily by activity in its market.
“When new markets began to develop in Central and Eastern Europe after the fall of socialism, people naturally had questions about their stability. At that time, a number of statistical criteria were defined that facilitated the process of analyzing the maturity of the market. We were interested in what results could be obtained by applying these criteria to the Bitcoin market," said the professor Krakow University of Technology Stanislaw Drozdz.
Scientists analyzed the minute-by-minute changes in the value of Bitcoin in the period from 2012 to April 2018.
“Initially, the graphs we received were a little crooked, which did not promise anything promising. However, taking a closer look at this data, we found out that this curvature was the result of market formation in the first two years. After this period, income rates fluctuated in accordance with the cubic law,” the professor added.
After this, researchers focused their attention on the volatility of rates of return. In mature global markets, performance indicators (indicating gains or losses) are not correlated, which is exactly what the Bitcoin market exhibits. However, temporal correlations can appear in more subtle details, such as various forms of volatility clustering.
In a broader context, what this all means is:..
The traditional foreign exchange market develops with the help of central banks or governments. Bitcoin, on the other hand, develops on its own, solely due to the characteristics built into the foundation of its market. In this case, which currency should be considered the best?
According to phys.org
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