CryptoURANUS Economics: 08/04/18

CryptoCurrencies


Saturday, August 4, 2018

Central Processing Unit [CPU]: Defined in CryptoCurrency

Central Processing Unit [CPU]: Defined in CryptoCurrency


Central Processing Unit, processor or CPU is defined as the brains of the computer. It makes the different parts of a computer work together.


Most CPUs are a small, black square with many tiny metal wires on the bottom side.
The CPUs are usually what we describe when talking about computer speed. This speed, also called clock speed, is measured in gigahertz or GHz for short. If a CPU had a clock speed of 1 hertz, it could do 1 very simple task every second.
Most smartphones today have processors that measure more than 1 GHz. A 1 GHz processor can handle more than 1 billion tasks every second.
In addition to clock speed, the number of CPUs can affect the speed and power. The more CPUs a computer has, the more tasks it can process.
  • 1 CPU = Single core processor
  • 2 CPU = Dual core processor, it can handle twice as much as a single core.
  • 4 CPU = Quad core processor, it can handle twice as much as a dual core and four times as much as a single core.

Cash: Defined in CryptoCurrency

Cash: Defined in CryptoCurrency



Cash is physical money available to someone or safely stored in an available resource like a bank or represented by a check.

Capital: Defined in CryptoCurrency

Capital: Defined in CryptoCurrency


Capital is cash and anything else of value one owns including software, cars, and buildings that contributes to building wealth.

Candlesticks: Defined in CryptoCurrency

Candlesticks: Defined in CryptoCurrency

 

Candlesticks are defined as a type of chart used to show changes in price over time. Each candle provides 4 points of information, the opening price, the closing price, the high, and the low. Also known as “candles” and “Japanese candlesticks”.


The Japanese developed this type of chart hundreds of years ago while trading rice and so it was named after them. Today, many investors prefer candles because they are easy to understand and provide a lot of quick information.


Candles have two parts, the body (it can be hollow or filled) and the long thin lines drawn above and/or below. The lines are also called “wicks”, “shadows”, or “tails”.
  • The body is used to show the opening and closing price for that time period.
  • The wicks are used to show the highest price and lowest price reached for that time period.


Candles are often red or green, where red indicates a price started high and ended low and green indicates a price that started low and ended high. 


Some candles are black and white, where black indicates a price that started high and ended low and white indicates a price that started low and ended high.

 
Candles represent a single time period. For example, if you are looking at a 1 hour chart, each candle represents 1 hour of trades.


Some candles are long and some candles are short. Long candles tell you there was a lot of pressure to buy or sell and short candles tell you there was very little pressure.

Bull Trap: Defined in CryptoCurrency

Bull Trap: Defined in CryptoCurrency


A bull trap is an investor who wants to profit from the movement of increasing prices. 


A bull trap is a false impression that the prices are increasing causing a bullish investor to try to take advantage of that. 


The price then reverses, going back down causing the him to lose money.

Bull: Defined in CryptoCurrency

Bull: Defined in CryptoCurrency


A bull market is defined as a continued increase in value for any type of asset. Also known as a “bull run”.



You can think of a bull, swinging his big horned head upwards rocketing prices upwards. 


An investor who is a bull wants to profit from the movement of increasing prices.

Bubble: Defined in CryptoCurrency

Bubble: Defined in CryptoCurrency

A bubble is a large increase in prices for the whole economy or a part of the economy, followed by a massive, rapid drop.

 

It’s important to notice that a bubble is only a bubble if it applies to an entire economy or part of the economy. If the massive price swings are just between you and your circle of friends, it’s probably not a bubble.



Famous historical examples of bubbles are the Dutch Tulip bubble of the 1630s, the Dot-Com bubble of the 1990s, the housing bubble of the early 2000s and some like to say the Bitcoin bubble of 2017.

bubble-image

Let’s first look at the definition of “natural price”


Natural price is an amount of money being charged, set by the cost of producing a product. For example, if it costs $3.00 to produce 12 duck eggs, than the natural price is $3.00.

If demand goes up from unreasonable, unnatural causes, then prices will shoot up.

Here’s a ridiculous example of a bubble with duck eggs:

Let’s imagine that Joe buys 12 duck eggs every week from a duck farmer for $5. Under normal circumstances, the price will probably stay fixed at $5. But then let’s say the Kardashians tell the world they love duck eggs and themselves eat 3 every single day!

Suddenly millions of people also want duck eggs and the duck farmer is overwhelmed with of customers asking for his eggs. When Joe asks the farmer for his usual 12 eggs for $5, Bill who watched the Kardashians offers more money for those same eggs.
  • Joe offers $10 for 12 eggs.
  • Alice hears Bill’s offer and wants the eggs even more and offers $20.
  • Susy hears Alice’s offer and offers a massive $50. In minutes, those $5 eggs are worth 10X at $50!
Several weeks later, the Kardashians and their friends don’t care about duck eggs. Silly Susy may have stocked up on hundreds of eggs, but now the Kardashians don’t care and neither does she. Susy begins to sell her duck eggs and the price of duck eggs drops rapidly.

Now Joe can continue buying his duck eggs for $5. The bubble has popped.

Prices only go up for two reasons: 

An increase in demand as we’ve seen above ora decrease in supply.

If the farmer’s ducks always make 24 eggs each week but this week they only make 12, the farmer could charge Joe more than $5 simply because they both want those 12 eggs.

By definition, a bubble must burst, if it doesn’t, then it wasn’t a bubble to begin with.

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