Turkey, the cradle of civilization, is quietly digitizing despite the high inflation in the economy, and the lira’s volatility can be linked to the prices of Bitcoin (BTC) and Ether (ETH). During the fourth quarter of 2021, the exchange rate of the Turkish lira against the US dollar fell from 9 liras to 18.5 liras to the dollar during the six weeks until mid-December, then rose to 10 liras before declining again to 1,387 liras at that time. messages, making the currency a highly volatile asset.
The reason for the lira’s volatility was the corresponding interest rate cut by Turkish President Recep Tayyip Erdogan amid rising inflation and against the advice of central banks. High inflation tends to reduce the value of cash and prompt investors, including major professional and institutional investors, as well as top hedge fund managers such as George Soros, to invest their money in cryptocurrencies. With inflation above 20% in 2021, Erhan Kahraman, Cointelegraph’s news editor, said:
“Bitcoin and Other Cryptocurrencies in Turkey Increased 11 Times.”
Unexpectedly, the cryptocurrency market collapsed in the first trading week of 2022, and as a result, Bitcoin and Ethereum, which rose by 100% and 300% respectively during 2021, entered bear market territory. The accident resulted from a combination of three accidents.
The first incident was the publication of the minutes of the December meeting of the US Federal Reserve. They suggested that the US Federal Reserve cut its pandemic stimulus measures and start raising interest rates faster than expected. The news triggered a sell-off in global stock markets that spilled over into the cryptocurrency markets, with Bitcoin eventually dropping more than 40% from its November 2021 high. Likewise, Ethereum fell more than 13% following the news to just $. 3300.
The second event was anti-government riots in Kazakhstan, the world’s second largest bitcoin mining hub, which led to the dismissal of the country’s government and shutdown of internet services, leaving about 13% of the world’s bitcoin mining offline.
Related: Bitcoin miners resisting geopolitics are a good sign for the network
The third event was the rapid global spread of the micronized variant of COVID-19, which wreaked havoc on long-term social and economic development, leaving behind millions of sick and exhausted healthcare providers who were already succumbing to the cumulative stress of each surge. . To reinforce the idea that people should not live in constant fear of the virus, Ugur Sahin, the German-Turkish co-founder of the COVID-19 vaccine maker BioNTech, emphasized that while the virus will still be around for a few more years, the COVID-19 variants have been controlled. and that BioNTech monitors new variants and new strains.
However, the unexpected market crash was not enough to shake Turkish investors’ belief that cryptocurrencies are insurance against the weaker lira and double-digit inflation.
The first eco-friendly and secure digital currency
While Satoshi Nakamoto is credited with developing the first cryptocurrency, it was actually Turkish-American Emin Gün Sirer — CEO of Ava Labs, professor at Cornell University, and co-director of the Cryptocurrency and Smart Contract Initiative — who developed the first cryptocurrency in 2003. Six years before the launch of Bitcoin. It was called “Karma” and was based on the Labor Certification Protocol.
Since 2019, Sirer has focused on building Avalanche, a green blockchain that uses a new consensus mechanism to ensure high transaction throughput. As Sirer explained to me, “Avalanche is a high-performance green blockchain that scales complex math and science rather than expensive and power-intensive hardware. In essence, Avalanche’s consensus innovation reduces the amount of communication required between validation nodes, Which also reduces the hardware and power needed to protect the multibillion-dollar value of the network.Taking it one step further, avalanche is a “quiet” protocol, meaning that if network activity drops, nodes will not constantly consume power, as we see in all systems The other basic approx. The contract will simply wait until it hears another transaction for the broadcast and quickly moves to the next decision.” He added:
“Sustainability is critical to the blockchain industry’s ability to take precedence over traditional infrastructure, as well as to the core ethics of this entire ecosystem of using innovation to improve people’s lives.”
“Much of the momentum climate activists have faced comes from officials with too much power,” Sirer continued. “Decentralizing their power and placing more economic control in the hands of individuals rather than institutions.