The Bitcoin Marketing subreddit aims to bring together content creators, marketers, and subject matter experts in the Bitcoin community. This is a forum to discuss, strategize, and execute on projects that promote Bitcoin to a mainstream audience with messaging anchored to Bitcoin's key value propositions.
Pi Network is being popular since its release. In future, Pi Coin will be like Bitcoin. Cryptocurrency experts predicts the value of Pi coin to be 0.4$ to 1$ after March 21, 2021. It could reach 100$ till 2024. Its time to mine Pi coin like Bitcoin.
Suggestion : Make bitcoin starting to waste after 24h, not 15 hours
I love Tarkov and I play this game way too much, probably like many of you because this game is GOOD ! With the current situation, if you don't want to waste bitcoins when you have a lot of GPUs, for instance 50 GPUs, you have to start EFT every 15 hours just to press a button. This feeling about having to start your game every morning just to press a button is bad, in my opinion of course. Could you make the wasting starting point after 24h ? You would not have to start the game 2 times a day.
you could increase the maximum number of bitcoins from 3 to 5. The price would decrease because more offers (less bitcoins wasted, more bitcoins) but in the end it would be approximately the same amount of money per 24h, if of course you ajust the price it is sold to traders. (something from 160k to 95k)
or, keep the maximum to 3 and increase the mining time. Bitcoin value will raise as it will be rarer and at the end you would make the same amount of money per 24. Might need to increase its value to the traders if it does not follow the flea market price.
Just to be clear, the point is not to make more or less money per 24h. It is about making the same amount of money for everyone that connect every 24h or less instead 15 hours. If it was just me, I would just remove the bitcoin farm from the game because it makes it way too easy ! Hahaha PS1: Some of you might talk about a future EFT mobile application to manage your hideout. Again, I think it would be good not feel the need to connect to the game more than once a day. This game is already really addictive ! PS2 : Having a cap is not really realistic for EFT, a realistic game :P https://preview.redd.it/92acjs3i4xg41.png?width=939&format=png&auto=webp&s=54c4b8374992b1c39ea8a827a47c64ba590a7865
Friend of mine says Ethereum is likely going to surpass bitcoin in value in the coming 1-2 years. Is this crazy talk or on the level?
A work friend of mine who has been a miner for years was educating me on crytocurrency this week (i'm new) and said Ethereum is going to surpass bitcoin in value. He didn't say possibly or likely too, but a definitive *IS GOING TOO. And my question as a newbie, and someone looking to invest in cryptocurrency, is.....is my friend on the level or is he going off pie in the sky dreams?
[rant]While Bitcoin's price skyrockets, I'm not making a single profit. I'm sure I'm not the only one.
So, long story short, I've been trading in cryptocurrencies since april. I mined around 0.1 bitcoins worth of Sia and Eth and then stopped mining because I was tired of the constant noise and heat in my room, sold my gpu and started using those 0.1 bitcoins to trade. I think I'm a "good" trader as in less than 4 months I was able to get my 0.1 bitcoins to 0.82 bitcoins in late september. With Bitcoin being valued 2200 when I was done mining and Bitcoin's value being around 4400 in late september that's an 8.2 return on my initial investment in Bitcoins and 16.4 in USD. That's an amazing return. I always put my surplus money in a bank account that gives me a (generous) 3% per year. That means that to see similar gains I needed to wait 93-94 years. But as late september started it started going bad, very bad. The reason why I made good returns in the previous months was due to a set of rules I set for myself: -a) only invest in coins that are interesting and solid (NAV, DCR, Verge, Antshares/Neo, Ethereum, OmiseGo) meaning good development, good potential (which means undervalued market cap) -b) always be closing. I never waited for the 2x-3x. Once I made a profit with a coin I already started looking at other investment opportunities. -c) I always set my goal as ignoring fiat value of my coins. Who fuckin cares if Ark is valued 1$ or 3$, it's fiat price is mostly tied to Bitcoin's price so my ultimate goal was always to increase my number of bitcoins (since I very much believe that there's only one direction for bitcoin in the long run-> up, I don't believe that's necessarily true for altcoins). I plain hate people that say "I wonder if Ark will hit 10$", Bitcoin may go from 1800 to 5500 so it's tripled in value, that doesn't change that it's bitcoin's value may be lower now. So in the end if you didn't buy ark you'd have more money. Obviously coins that are exchanged for fiat in good numbers do not follow the same logic (ETH, ETC, NEO), but it is generally true for most altcoins. -d) Always diversify. As very recently bitshares showed me, it's never a good idea to put all your eggs in a single basket -e) Don't invest all of your bitcoins. That's the biggest factor that fucked me hard.As late september I started having much smaller profits and muy sell orders sitting here for days/weeks I started investing more of my capital as most altcoins were going down. My logic was "this is only temporary", and it was true for the 4 months before, but what I'm witnessing now is depressing. My portfolio's value is now below 0.5 bitcoins for the first time in months and even Bitcoin's higher price is not helping me smile at all. I left money on the table and I should've known. I'm pretty confident I'll eventually fill those sell orders and there's zero chance at the moment I'm gonna panic sell (except for bitshares). But I have basically no bitcoins left to invest and I feel like I'm losing even more money now. Everything around's so cheap, but every time I had this thought recently I woke up the day after with the coin being even cheaper. Sorry for venting, but I needed to share. No I'm not desperate nor worried, and the gains I had from a very small starting sum are honestly impressive already and even if I lose more, it's okay.
Friend of mine says Ethereum is likely going to surpass bitcoin in value in the coming 1-2 years. Is this crazy talk or on the level?
A work friend of mine who has been a miner for years was educating me on crytocurrency this week (i'm new) and said Ethereum is going to surpass bitcoin in value. He didn't say possibly or likely too, but a definitive *IS GOING TOO. And my question as a newbie, and someone looking to invest in cryptocurrency, is.....is my friend on the level or is he going off pie in the sky dreams?
Every Bitcoin arrives into the world through a process called bitcoin mining. Bitcoin miners mint new Bitcoin on a transaction system called the Blockchain, which is a shared recording of transactions synced via the Bitcoin peer to peer network. In addition to minting coins, miners are also solely responsible for adding and subtracting transactions from the Blockchain shared transaction record, to facilitate normal payments and movements of funds. In the early days of Bitcoin, every Bitcoin wallet could take part in mining. While coins minted in the early days of the project were valueless, as Bitcoin's popularity grew over time the minted coins would come to represent a highly prized reward. With this growth in reward valuation mining has shifted from the domain of desktop computers to a fierce competition between expensive and hard to obtain specialized single-purpose Bitcoin mining computers.
To mint coins, miners update a public transaction record, called the Blockchain, or the block chain. The Blockchain transaction system is an open fund transfer system, enabling the miners to introduce new currency for trade, and facilitate the trading of Bitcoin between Bitcoin users. Although anyone may submit a transaction to the miners, only miners may add or remove transactions through a series of updates called blocks. Each block encapsulates a number of transactions, including the miner's reward of newly minted Bitcoin. Each block refers back to the preceding block in a chain configuration, hence the name Blockchain. There is one block that does not link back to a preceding block, and that is the original block called the genesis block that was first published to the Blockchain in January of 2009 by Satoshi Nakamoto. The coins mined in that block are not spendable. Since Satoshi started the Blockchain, others have come to taken over the mantle of updating the transaction record and helping distribute the supply of Bitcoin to the world. Anyone may participate in building the blockchain, as long as they are able to expend energy in a provable way called proof of work. Provable energy expenditure ensures that making changes to the transaction record is visibly expensive to accomplish, reducing the risk of alternative transaction records that could be used to mislead and steal by spending the same money in two conflicting transaction records. Making double spending expensive to accomplish and making the benefits of cooperation outweigh the possible returns of malfeasance gives participants in the Blockchain a way to evaluate their risk when receiving funds. Each block confirms that there was a provable amount of energy expended, establishing authority that there is not another series of conflicting transactions in which a visible payment did not happen.
The supply of Bitcoin is designed to be limited, but distributed over time using a system called the block subsidy. The limited supply of Bitcoin was modeled after gold coins, and miners of Bitcoin can be thought of as the digital equivalent of gold miners. Miners who mine blocks are allowed to print new coins for themselves with every block, with a time-diminishing reward. At the start of the Blockchain the subsidy amounted to fifty coins per block. The reward amount cuts in half every four years, as measured by every two hundred and ten thousand blocks. By 2035 the amount of new coins introduced per year should be under one percent of the total supply, and by 2140 there should be no more coin subsidy. Miners may claim another type reward in the block, called transaction fees. These fees are essentially bids by Bitcoin users to have their transactions included in a block. A miner may only include transactions up to a limit, so it is expected that he will choose the set of transactions with the highest fees. Fees are intended as a permanent reward for miners. Fees work by transactions inputting more funds than they output, which is allowable. Miners who include transactions in their block are allowed to take the excesses from inputs and add those funds to their own special reward transaction which is called the coinbase transaction. As long as a miner does not attempt to claim more Bitcoin in the coinbase transaction than was missing from outputs and is allowed by the block subsidy, he forms a valid block.
To produce blocks that update the Blockchain, miners must perform what is called a Hashcash, or a Proof of Work, in what is called hashing. A Hashcash challenge proves that the hasher did something that took significant energy to complete, in a way that is easily verifiable by any observer. In Bitcoin's implementation of Hashcash, this proof of work is to create a signature of their Blockchain update that matches a challenge pattern that is designed to be difficult to match. Bitcoin's signature method uses an algorithm called double SHA256, so the work of hashing is essentially computing large numbers of SHA256 hashes. Sometimes hashing is described as a difficult math problem, but in actuality the problem is a easily provably energy spending problem. It is designed to prove that the miner spent real world resources to create updates, to give an assurance that there is not another set of updates somewhere else that conflicts. Hashers aren't intelligently solving any problem, they are simply finding the solution to an equation by brute force guessing. To complete a Hashcash challenge, or win a block, the miner must search for a block with a hash value that matches a challenge pattern called a target. Miners constantly adjust their block, trying many times using random data called a nonce to make their block match the challenge pattern. The system is designed to dynamically adjust the challenge difficulty to achieve a ten minute block discovery time, or one hundred and forty four blocks per day. Every two weeks, as measured by two thousand and sixteen blocks, the challenge pattern difficulty is adjusted by the network. The adjustment targets a ten minute block discovery time using the previous two weeks' data. The adjustment can go up or down, but due to advances in hashing technology the challenge generally gets harder as time goes by.
The Mining Game
Mining has come a long way from the early beginnings of Bitcoin. It took almost a year after Satoshi Nakamoto published the first block for the difficulty to even adjust to a higher setting due to increased competition. The original configuration of desktop mining computers CPU power to find hashes, with all wallets participating in the mining, could not last in the face of Bitcoin's increasing popularity over time. GPUs were found to be able to mine so much more efficiently than CPUs that they began to make CPU mining obsolete. As GPU mining rose in popularity, Satoshi asked people to avoid it for as long as possible to keep mining distributed, but eventually the tide of GPU miners overwhelmed any possible CPU competition and the mining option was removed from the Bitcoin desktop client visual interface. An early innovation in mining was to create a pool of effort, or a mining pool. The first pool was created by the developer Slush, and he offered miners an opportunity to trade their hashing power in exchange for a share in his payouts. By increasing their chances of winning a block through collective effort, miners were able to minimize the undesirable reward variance inherent in the hashing process. Mining pools took over the entire spectrum of mining, splitting into a few archetypes: farms to pool the mining effort of a company, decentralized pools like P2Pool or Eligius or Bitminer who seek to combine risk minimization with the distribution of individualized miner decision making, and standard pools like Slush's pool which essentially rent hashing power from contributing miners. For a short time, there were some movements to upgrade from GPUs to an even more efficient form of mining called FPGA mining, but Bitcoin's value grew so quickly that the final configuration of mining was found in dedicated hashing devices called ASICs. ASIC miners, custom built chips that mine so much more efficiently and powerfully than anything else that they make any other option useless, quickly took over the entire hashing competition. The first ASICs appeared in 2013, but multiple generations over the years have dramatically improved on the technology so that even older model ASICs are hopelessly obsolete. Unfortunately for Bitcoin's decentralization, the high expense of ASIC production has meant that mining manufacturing companies are also given a unique advantage by vertically integrating. Instead of selling their equipment to a distributed set of operators many ASIC manufacturers choose to mine on their own equipment. This means that mining as an individual became extremely difficult as ASICs completed their dominance of Bitcoin mining. A common Ponzi scheme that pretends to offer a way for ordinary individuals to still take part in mining is called the cloud mining scheme. In this, an up-front deposit is taken to rent mining hardware with, with supposed future payouts from the hardware being given out over time. Instead, the scheme simply takes deposited funds and uses it to pay the payouts. Over time this scheme has fallen in popularity as victims have become burned and knowledge of the scam has spread.
TIL the combined wealth of all the people in the world is $241 trillion, which is the total value of 21 million bitcoins (the maximum that can be mined) if the smallest denomination, 1 Satoshi = US$1.15. Will such a day ever come?
TIL the combined wealth of all the people in the world is $241 trillion, which is the total value of 21 million bitcoins (the maximum that can be mined) if the smallest denomination, 1 Satoshi = US$1.15. Will such a day ever come?
For the last few years I loved both gold and Bitcoin although I had much more of my net-worth in gold. After MUCH thought, I've decided I will be soon liquidating my gold and buying more Bitcoin. Here's why: * I believe after this whole COVID shitshow is said and done FIAT currencies are going to be fucked and all governments are going to realize that they MUST back their currency by some sort of reserve asset. We really only have 3 options - Gold/Silver, Oil, and Bitcoin. Let's just disregard Oil because we all know oil is slowly on it's way out. With the way China is hoarding gold, I believe China will back it's new central bank digital currency by gold reserves. The whole world will start rethinking using the US Dollar backed by NOTHING (you can say army, but that's not going to work for long). The US isn't going to copy China and back their currency by Gold again imo, so I honestly think they'll choose Bitcoin (although I could easily be wrong). * Anyways both Gold and Bitcoin are a good bet against FIAT currencies, the only problem is that when gold prices go up (demand goes up), a shitload more miners start mining gold and the price of Gold eventually comes back down to it's cost of production (and usually overshoots it to the downside due to human psychology). If gold becomes a reserve asset, governments will see these miners going out of business and subsidize them, which artificially decreased the cost of production, further decreasing the price of gold. Miners are NOT the friends of gold investors, they are the "enemy." * Since only 900 Bitcoin are mined per day (currently 6.25 per block), if miners doubled network's hashrate tomorrow, the supply would remain the same. THIS IS HUGE. Miners are securing the network, which adds utility to Bitcoin. When utility is added, the intrinsic value of Bitcoin goes up, which causes a positive feedback loop for price. Miners are the FRIENDS of investors. This is a MASSIVE fundamental difference, not even taking into account the 21 million supply max vs. gold's infinite supply, the additional ease of transportation, digital utility, etc. * If Bitcoin and Gold both become reserve assets, do I believe the Chinese government that they have the exact amount of gold in reserves as digitally-printed money? We have the "trust" that they're telling the public the truth. With Bitcoin, governments can provably verify their reserves and we don't have to "trust" them, anyone in the world can verify it for themselves. This is fundamentally superior in a world where lies are everywhere, at least you know your currency is sound.
Putting $400M of Bitcoin on your company balance sheet
Also posted on my blog as usual. Read it there if you can, there are footnotes and inlined plots. A couple of months ago, MicroStrategy (MSTR) had a spare $400M of cash which it decided to shift to Bitcoin (BTC). Today we'll discuss in excrutiating detail why this is not a good idea. When a company has a pile of spare money it doesn't know what to do with, it'll normally do buybacks or start paying dividends. That gives the money back to the shareholders, and from an economic perspective the money can get better invested in other more promising companies. If you have a huge pile of of cash, you probably should be doing other things than leave it in a bank account to gather dust. However, this statement from MicroStrategy CEO Michael Saylor exists to make it clear he's buying into BTC for all the wrong reasons:
“This is not a speculation, nor is it a hedge. This was a deliberate corporate strategy to adopt a bitcoin standard.”
Let's unpack it and jump into the economics Bitcoin:
Is Bitcoin money?
No. Or rather BTC doesn't act as money and there's no serious future path for BTC to become a form of money. Let's go back to basics. There are 3 main economic problems money solves: 1. Medium of Exchange. Before money we had to barter, which led to the double coincidence of wants problem. When everyone accepts the same money you can buy something from someone even if they don't like the stuff you own. As a medium of exchange, BTC is not good. There are significant transaction fees and transaction waiting times built-in to BTC and these worsen the more popular BTC get. You can test BTC's usefulness as a medium of exchange for yourself right now: try to order a pizza or to buy a random item with BTC. How many additional hurdles do you have to go through? How many fewer options do you have than if you used a regular currency? How much overhead (time, fees) is there? 2. Unit of Account. A unit of account is what you compare the value of objects against. We denominate BTC in terms of how many USD they're worth, so BTC is a unit of account presently. We can say it's because of lack of adoption, but really it's also because the market value of BTC is so volatile. If I buy a $1000 table today or in 2017, it's roughly a $1000 table. We can't say that a 0.4BTC table was a 0.4BTC table in 2017. We'll expand on this in the next point: 3. Store of Value. When you create economic value, you don't want to be forced to use up the value you created right away. For instance, if I fix your washing machine and you pay me in avocados, I'd be annoyed. I'd have to consume my payment before it becomes brown, squishy and disgusting. Avocado fruit is not good money because avocadoes loses value very fast. On the other hand, well-run currencies like the USD, GBP, CAD, EUR, etc. all lose their value at a low and most importantly fairly predictible rate. Let's look at the chart of the USD against BTC While the dollar loses value at a predictible rate, BTC is all over the place, which is bad. One important use money is to write loan contracts. Loans are great. They let people spend now against their future potential earnings, so they can buy houses or start businesses without first saving up for a decade. Loans are good for the economy. If you want to sign something that says "I owe you this much for that much time" then you need to be able to roughly predict the value of the debt in at the point in time where it's due. Otherwise you'll have a hard time pricing the risk of the loan effectively. This means that you need to charge higher interests. The risk of making a loan in BTC needs to be priced into the interest of a BTC-denominated loan, which means much higher interest rates. High interests on loans are bad, because buying houses and starting businesses are good things.
BTC has a fixed supply, so these problems are built in
Some people think that going back to a standard where our money was denominated by a stock of gold (the Gold Standard) would solve economic problems. This is nonsense. Having control over supply of your currency is a good thing, as long as it's well run. See here Remember that what is desirable is low variance in the value, not the value itself. When there are wild fluctuations in value, it's hard for money to do its job well. Since the 1970s, the USD has been a fiat money with no intrinsic value. This means we control the supply of money. Let's look at a classic poorly drawn econ101 graph The market price for USD is where supply meets demand. The problem with a currency based on an item whose supply is fixed is that the price will necessarily fluctuate in response to changes in demand. Imagine, if you will, that a pandemic strikes and that the demand for currency takes a sharp drop. The US imports less, people don't buy anything anymore, etc. If you can't print money, you get deflation, which is worsens everything. On the other hand, if you can make the money printers go brrrr you can stabilize the price Having your currency be based on a fixed supply isn't just bad because in/deflation is hard to control. It's also a national security risk... The story of the guy who crashed gold prices in North Africa In the 1200s, Mansa Munsa, the emperor of the Mali, was rich and a devout Muslim and wanted everyone to know it. So he embarked on a pilgrimage to make it rain all the way to Mecca. He in fact made it rain so hard he increased the overall supply of gold and unintentionally crashed gold prices in Cairo by 20%, wreaking an economic havoc in North Africa that lasted a decade. This story is fun, the larger point that having your inflation be at the mercy of foreign nations is an undesirable attribute in any currency. The US likes to call some countries currency manipulators, but this problem would be serious under a gold standard.
Currencies are based on trust
Since the USD is based on nothing except the US government's word, how can we trust USD not to be mismanaged? The answer is that you can probably trust the fed until political stooges get put in place. Currently, the US's central bank managing the USD, the Federal Reserve (the Fed for friends & family), has administrative authority. The fed can say "no" to dumb requests from the president. People who have no idea what the fed does like to chant "audit the fed", but the fed is already one of the best audited US federal entities. The transcripts of all their meetings are out in the open. As is their balance sheet, what they plan to do and why. If the US should audit anything it's the Department of Defense which operates without any accounting at all. It's easy to see when a central bank will go rogue: it's when political yes-men are elected to the board. For example, before printing themselves into hyperinflation, the Venezuelan president appointed a sociologist who publicly stated “Inflation does not exist in real life” and instead is a made up capitalist lie. Note what happened mere months after his gaining control over the Venezuelan currency This is a key policy. One paper I really like, Sargent (1984) "The end of 4 big inflations" states:
The essential measures that ended hyperinflation in each of Germany,Austria, Hungary, and Poland were, first, the creation of an independentcentral bank that was legally committed to refuse the government'sdemand or additional unsecured credit and, second, a simultaneousalteration in the fiscal policy regime.
In english: *hyperinflation stops when the central bank can say "no" to the government." The US Fed, like other well good central banks, is run by a bunch of nerds. When it prints money, even as aggressively as it has it does so for good reasons. You can see why they started printing on March 15th as the COVID lockdowns started:
The Federal Reserve is prepared to use its full range of tools to support the flow of credit to households and businesses and thereby promote its maximum employment and price stability goals.
In english: We're going to keep printing and lowering rates until jobs are back and inflation is under control. If we print until the sun is blotted out, we'll print in the shade.
BTC is not gold
Gold is a good asset for doomsday-preppers. If society crashes, gold will still have value. How do we know that? Gold has held value throughout multiple historic catastrophes over thousands of years. It had value before and after the Bronze Age Collapse, the Fall of the Western Roman Empire and Gengis Khan being Gengis Khan. Even if you erased humanity and started over, the new humans would still find gold to be economically valuable. When Europeans d̶i̶s̶c̶o̶v̶e̶r̶e̶d̶ c̶o̶n̶q̶u̶e̶r̶e̶d̶ g̶e̶n̶o̶c̶i̶d̶e̶d̶ went to America, they found gold to be an important item over there too. This is about equivalent to finding humans on Alpha-Centauri and learning that they think gold is a good store of value as well. Some people are puzzled at this: we don't even use gold for much! But it has great properties: First, gold is hard to fake and impossible to manufacture. This makes it good to ascertain payment. Second, gold doesnt react to oxygen, so it doesn't rust or tarnish. So it keeps value over time unlike most other materials. Last, gold is pretty. This might sound frivolous, and you may not like it, but jewelry has actual value to humans. It's no coincidence if you look at a list of the wealthiest families, a large number of them trade in luxury goods. To paraphrase Veblen humans have a profound desire to signal social status, for the same reason peacocks have unwieldy tails. Gold is a great way to achieve that. On the other hand, BTC lacks all these attributes. Its value is largely based on common perception of value. There are a few fundamental drivers of demand:
Means of Exchange: if people seriously start using BTC to buy pizzas, then this creates a real demand for the currency to accomplish the short-term exchanges. As we saw previously, I'm not personally sold on this one and it's currently a negligible fraction of overall demand.
Criminal uses: Probably the largest inbuilt advantage of BTC is that it's anonymous, and so a great way to launder money. Hacker gangs use BTC to demand ransom on cryptolocker type attacks because it's a shared way for an honest company to pay and for the criminals to receive money without going to jail.
Apart from these, it's hard to argue that BTC will retain value throughout some sort of economic catastrophe.
BTC is really risky
One last statement from Michael Saylor I take offense to is this:
“We feel pretty confident that Bitcoin is less risky than holding cash, less risky than holding gold,” MicroStrategy CEO said in an interview
"BTC is less risky than holding cash or gold long term" is nonsense. We saw before that BTC is more volatile on face value, and that as long as the Fed isn't run by spider monkeys stacked in a trench coat, the inflation is likely to be within reasonable bounds. But on top of this, BTC has Abrupt downside risks that normal currencies don't. Let's imagine a few:
A critical software vulnerability is found in the BTC codebase, leading to a possible exploitation.
Xi Jinping decides he's had enough of rich people in China hiding their assets from him and bans BTC.
Some form of bank run takes hold for whatever reason. Because BTC wallets are uninsured, unlike regular banks, this compounds into a Black Tuesday style crash.
Blockchain solutions are fundamentally inefficient
Blockchain was a genius idea. I still marvel at the initial white paper which is a great mix of economics and computer science. That said, blockchain solutions make large tradeoffs in design because they assume almost no trust between parties. This leads to intentionally wasteful designs on a massive scale. The main problem is that all transactions have to be validated by expensive computational operations and double checked by multiple parties. This means waste:
BTC was estimated to use as much electricity as Belgium in 2019. It's hard to trace where the BTC mining comes from, but we can assume it has a huge carbon footprint.
A single transactions is necessarily expensive. A single transaction takes as much electricity as 800,000 VISA transactions, or watching 50,000 hours of youtube videos.
There is a large necessary tax on the transaction, since those checking the transaction extract a few BTC from it to be incentivized to do the work of checking it.
Many design problems can be mitigated by various improvements over BTC, but it remains that a simple database always works better than a blockchain if you can trust the parties to the transaction.
Let’s start by comparing Bitcoin to United States Dollar and Gold. Bitcoin, US Dollars and Gold all have value because other people believe that they do. They have no objective value and are all social constructs. Bitcoin, USD, and Gold. Why are they worth something? For three mains reasons.
Store of value is the function of an asset that can be saved, retrieved and exchanged at a later time, and be predictably useful when retrieved
Medium of ExchangeA medium of exchange is an intermediary instrument or system used to facilitate the sale, purchase, or trade of goods between parties.
Unit of AccountThe value of something is measured in a specific currency. This allows different things to be compared against each other; for example, goods, services, assets, liabilities, labor, income, expenses
We do all need some currency to store value, unit of account, and as a medium of exchange, unless we want to go back to bartering! Bartering Although bartering might be a lot of fun for a day, it would surely make everything a lot less efficient! USD, Gold and Bitcoin - Store of Value, Unit of Account and Medium of Exchange - United States Dollar. The US Dollar is used as a medium of exchange, store of value and unit of account. The united states dollar does not have a limited supply. More money can be printed and created by the federal reserve and also by banks when they create loans. Creating Money As more is created it might mean that the value goes down (inflation) and this might mean that over the long term it might not be a great store of value, compared to gold, or bitcoin, and there is usually a relationship between inflation, uncertainty and the rising value of alternatives as a store of value. Gold - Gold has previously been used as a medium of exchange in the form of gold coins but it is no longer used as a medium of exchange or unit of account. The primary purpose of gold is as a store of value. With a limited supply, gold can act as a store of value and can protect against inflation. Additional gold can only be found by mining (and there is a limit to how much gold can be mined from this planet). It can also be created from other elements but the process requires a nuclear reaction and it’s currently not profitable to do that. While gold is limited on earth, it is possible that it can be found abundantly in space. Nasa is targeting a golden asteroid in 2022 that can have enough gold everyone on earth can a billionaire (or more likely to turn the gold industry into chaos) NASA and SpaceX explore asteroid for gold and other metals. It might be some time before space mining is realised but the prospect of finding abundant gold outside this planet in the future is a very real possibility Gold Asteroid BITCOIN Bitcoin can be used as a medium of exchange and a store of value As a medium of exchange, Bitcoin - can be exchanged digitally, internationally, and anonymously and securely. One challenge to bitcoins as a medium of exchange is the volatility and setting up the infrastructure - I don’t come across many places where I can use bitcoin in my life or know of anyone who is buying or selling things with bitcoin every day. I also read that there are some technical challenges to using bitcoin as a medium of exchange exchange. It isn’t that efficient, is slow and costly. The volatility of Bitcoin is also why it is challenging as a unit of account and as an effective store of value. Bitcoin does have a limited supply. There will only ever be 21 million bitcoins. However, cryptocurrencies don’t have a limited supply. It is possible to create an infinite number of cryptocurrencies just like Bitcoin. Just like copying and pasting the code - For example, Bitcoin 2, 3 could be made etc.,. As of today there are 6,955 different cryptocurrencies. What Bitcoin has that other cryptocurrencies doesn’t, as the first mover, is a certain infrastructure and community. But how valuable is that? Every dead currency has also had infrastructure and a community. Myspace had a pretty thriving community before Facebook existed. It is possible another, or many other superior cryptocurrencies could be created and replace bitcoin. Bitcoin Vs Gold Vs USD Gold - Store of Value (with advantages) Gold, has advantages compared to United States Dollar and Bitcoin as a store of value, gold has by far the longest history of the three and was recognised as far back as the ancient Egyptians as an object of beauty - representing a sungod but it was first used as a currency in 700 B.C. Gold is deeply embedded into our cultural psychology and we can say that it does have some value of beauty that has survived throughout different cultures in our history and exists to this day which shouldn’t be underestimated. Another advantage of gold is that it also has limited supply unlike the USD. Bitcoin - Store of Value & Medium of Exchange (with advantages) Compared to the US Dollar it has advantages as a medium of exchange that also has a store of value (that has a limited supply unlike the United States Dollar). Bitcoin serves a purpose as a store of value just like gold. The advantage compared to gold is that it can be used as both a store of value and a a medium of exchange (international, fast, anonymous money transfers). However it is quite new and it is remains to be seen how important this is as it is mostly used as a store of value now. There are many similarities between people buying Bitcoin and Gold as a store of value but also differences. One difference is that people are buying Bitcoin because they think it will increase in price in the future, and so it might be a better store of value compared to gold because it will increase in value and become more valuable (10x or 20x). Traditionally, gold has been a "safer" store of value, with a lower risk and more stable outcome. Bitcoin might also be seen as a more secure or easier way to store value than gold. It can be anonymous and electronic. Bitcoin also has disadvantages as a store of value. It doesn't have as reliable a history as gold. It therefore might be safer to invest in gold. United States Dollar (medium of exchange with advantages and disadvantages, unit of account, and store of value) (with disadvantages) The united states dollar main advantage is as a medium of exchange and unit of account. Bitcoin is not great as a medium of exchange and it is still easier in many circumstances to use US Dollar compared to bitcoin. But Bitcoin does have some advantages as a medium of exchange (international, fast, anonymous money transfers), but it doesn't seem possible that it will ever replace the USD as a medium of exchange. For USD, as a store of value, with no limit on the supply, it is almost certain that as more is created USD becomes less valuable over time. Why bitcoin is worth anything is the same reason that gold and united states dollars are worth anything - because we believe it is. Fiat currencies do have disadvantages as a store of value and a medium of exchange. Gold can only serve as a store of value, while bitcoin (and other cryptocurrencies) can serve as a store of value and medium of exchange. Personally I think we don’t fully have one currency that fully works globally as both a medium of exchange AND store of value AND unit of account. So there is space for something new and better that may or may not be based off blockchain technology. Currencies have come and gone in the past, and it’s totally possible that a new superior digital currency could be created in the future to replace them all. However, exactly how much they’re worth and if they’re worth anything depends entirely on how we use them and on what we all think they’re worth. What do you think? Appreciate your thoughts and feedback
For the last few years I loved both gold and Bitcoin although I had much more of my net-worth in gold. After MUCH thought, I've decided I will be soon liquidating my gold and buying more Bitcoin. Here's why: * I believe after this whole COVID shitshow is said and done FIAT currencies are going to be fucked and all governments are going to realize that they MUST back their currency by some sort of reserve asset. We really only have 3 options - Gold/Silver, Oil, and Bitcoin. Let's just disregard Oil because we all know oil is slowly on it's way out. With the way China is hoarding gold, I believe China will back it's new central bank digital currency by gold reserves. The whole world will start rethinking using the US Dollar backed by NOTHING (you can say army, but that's not going to work for long). The US isn't going to copy China and back their currency by Gold again imo, so I honestly think they'll choose Bitcoin (although I could easily be wrong). * Anyways both Gold and Bitcoin are a good bet against FIAT currencies, the only problem is that when gold prices go up (demand goes up), a shitload more miners start mining gold and the price of Gold eventually comes back down to it's cost of production (and usually overshoots it to the downside due to human psychology). If gold becomes a reserve asset, governments will see these miners going out of business and subsidize them, which artificially decreased the cost of production, further decreasing the price of gold. Miners are NOT the friends of gold investors, they are the "enemy." * Since only 900 Bitcoin are mined per day (currently 6.25 per block), if miners doubled network's hashrate tomorrow, the supply would remain the same. THIS IS HUGE. Miners are securing the network, which adds utility to Bitcoin. When utility is added, the intrinsic value of Bitcoin goes up, which causes a positive feedback loop for price. Miners are the FRIENDS of investors. This is a MASSIVE fundamental difference, not even taking into account the 21 million supply max vs. gold's infinite supply, the additional ease of transportation, digital utility, etc. * If Bitcoin and Gold both become reserve assets, do I believe the Chinese government that they have the exact amount of gold in reserves as digitally-printed money? We have to "trust" that they're telling the public the truth. With Bitcoin, governments can provably verify their reserves and we don't have to "trust" them, anyone in the world can verify it for themselves. This is fundamentally superior in a world where lies are everywhere, at least you know your currency is sound.
Butthead from Fidelity Investments tries to defend Buttcoin. Let's dissect their "myth busting"...
Addressing Fidelity Digital Investments defense of Bitcoin: Note: Sorry about the misleading title. People (including myself initially) were under the assumption this was "Fidelity Investments" or a division of that company. Please see comment from madali0 - this whole press release is misleading and scammy, and apparently has no affilliation with the more more well known "Fidelity Investments" - this is a separate entity called, "Fidelity Digital Investments" which for all we know, is some dude in his mom's basement. EDIT: UPDATE 2: Apparently while it's a separate entity for obvious liability purposes, it does appear to be associated with the main Fidelity company one way or another (which makes it look even worse for Fidelity to be associated with such vapid propaganda, but there it is. See: https://www.fidelity.com/fidelitydigitalassets/blog Also, NOTE that Fidelity calls it a "blog" - which if it's like Forbes, Huffington Post or other sites that offer user blogs, they basically will let just about anybody post under their moniker (as a shady way to drive traffic), whether it's been vetted or approved. So take it with a grain of salt. I would bet the author of that post is neither employed by any "Fidelity" company. Note: This has also been added to our official De-facto list of examples of what crypto is good for document.
Criticism #1: Bitcoin is too volatile to be a store of value. Response: Bitcoin’s volatility is a trade-off it makes for perfect supply inelasticity and an intervention-free market. However, with greater adoption of bitcoin and the development of derivatives and investment products, bitcoin’s volatility may continue to decrease, as it has historically.
First off, bitcoin's volatility has not "historically decreased." It continues to dramatically drop and rise randomly. Since bitcoin is not mapped to any tangible asset or entity, there's no way to perform due diligence or technical analysis on it. Its price is a reflection of demand, nothing else, and demand is driven by marketing. In related news, if you add vitamins to water, it becomes a source of useful nutrients. If you take beanie babies, and build a state-sanctioned infrastructure around them, they'll become less volatile. Fidelity's argument here is, if you take a rock, add some bone broth, veggies, proteins, and spices, the rock becomes soup.
Criticism #2: Bitcoin has failed as a means of payment. Response: Bitcoin makes deliberate trade-offs, such as limited and expensive capacity, to offer core properties such as decentralization and immutability. Given its high settlement assurances, Bitcoin optimizes its limited capacity for settling transactions that aren’t well served by traditional rails.
Translation: Is bitcoin a crappy payment system? Hey, look over at that shiny thing in the corner. Isn't it shiny? Did we mention bitcoin is decentralized and the blockchain is immutable? We've already shown that blockchain isn't better, and being de-centralized isn't better. So if that's the best argument, which isn't really an argument at all, just a distraction, that's sad. Even I could come up with a better argument than a Red Herring.
Bitcoin optimizes its limited capacity for settling transactions that aren’t well served by traditional rails.
Anyone know what "transactions" exclusively fit Fidelity's description? Anyone? Buehler? Yes, that's right, you got it: Criminal transactions, money laundering, drug deals, ransom payments, etc.
Criticism #3: Bitcoin is wasteful. Response: A substantial portion of bitcoin mining is powered by renewable energy or energy that would otherwise be wasted. Additionally the energy the Bitcoin network does consume is a valid and important use of resources.
This is an unstated major premise. Argument from anonymous authority. Where's the evidence that this energy would be wasted if it weren't spent on mining? This is another common myth that is going around. Second, even if the energy were "free", it could be better spent on something than mining, which wastes tremendous amounts of energy and creates nothing useful. Most power plants scale their energy generation based on demand, and even renewable energy sources have ways to not waste energy that isn't needed at that time. This argument is completely false. Note that any example Fidelity may cite of mining operations using unused energy resources is not in any way representative of the even a sizeable portion of the mining pool's energy consumption. The exception doesn't prove the rule. A picture of a mining rig with a gas flare in the distance is not evidence that rig is using energy that would otherwise be wasted. Ultimately, "hey it would be wasted anyway" is the absolute worst argument ever. That's basically a justification for the Tragedy of the Commons.
Criticism #4: Bitcoin is used for illicit activity. Response: Bitcoin, like cash or the internet, is neutral and has properties that may be valuable to good actors and bad actors. However, as a share of total transactions, Bitcoin transactions connected to illicit activity are very low.
Notice they didn't actually refute this point. They just sidestepped it. We know for a fact that a huge percentage of crypto transactions are wash trades. Even if you just count those transactions, it would probably account for the majority. At this time, because there may be more market speculation transactions than drug deal transactions, doesn't mean the activity is not "illicit." Any exchange that ever disappeared, was most likely engaged primarily in illicit transactions. Is bitcoin "neutral?" That's hard to say. It lends itself to criminal transactions much more easily than alternative methods, especially when it comes to stealing peoples' value. One thing Bitcoin does that's unique, is it allows someone to steal their bitcoin from thousands of miles away without them even knowing. That is one feature that's a lot harder to do with virtually every other monetary/value system. So given that unique attribute, I think their claim it's not "used for illicit activity" is bullshit. It's not only used for illicit acitvity. It's uniquely designed to be particularly efficient at it.
Criticism #5: Bitcoin is not backed by anything. Response: Bitcoin is not backed by cash flows, industrial utility, or decree. It is backed by code and the consensus that exists among its key stakeholders.
Bitcoin is backed by code? What is code worth? What is a consensus worth? How does that offer any stability? Code changes all the time. So does consensus. Fidelity here is mixing apples and oranges. This is a totally retarded, non-sensical argument. Hey, I need you to buy magic spreadsheet numbers. They're backed by "code". What "code?" Don't worry about it. A "consensus" of people you don't know think it's cool. That's all you need to know, right?
Criticism #6: Bitcoin will be replaced by a competitor. Response: While Bitcoin’s open-source software may be forked, its community and network effects cannot. Bitcoin makes trade-offs for core properties that the market deems valuable.
This makes no sense. Communities fork along with code. That's the whole point of forking. A fork also changes the "effect" of the network, you idiots. Does this guy really know anything about how crypto works? Fidelity's argument is absurd and wrong.
Conclusion While this piece does not cover the exhaustive list of criticisms against bitcoin, we believe the responses outlined here may be adapted to address other common misconceptions. Bitcoin is a unique digital asset for an increasingly digital world that requires digging deeper than the surface level to understand its core properties and trade-offs. It pushes onlookers to question pre-conceived notions of what is right and widely accepted to begin to understand its full value proposition.
Feel free to dig deeper. But note that none of you people have found the bottom of the pile of bullshit yet. Keep going. Conclusion What have we learned from this press release? Some people at fidelity have some bags they've recently bought into that they hope to unload soon.
Honestly, the more I read into buttcoin the more sketchy and brilliant it comes across. The points have already been stated here (wanna buy some 1s and 0s with no intrinsic value, not protected by any financial institution, not backed by any government?) so I won't dwell on that. What I wanted to post about was how it's such an ingenious scam: a perpetual, decentralized, headless, slow-boil pyramid scheme. A few frenzied libertarians and nerds sniffing their own farts put money into a genuine (if unscalable and inefficient) technology. This makes news, which attracts some speculators. Amount of money going in generates hype, more news, and brings in normies and more speculators. Value begins to go up, larger entities (companies/wealthy entrepreneurs) invest. Value goes up further. Pyramid reaches final stage as last wave of suckers buy bitcoin at ridiculous prices, convinced this slow, insecure, power-hungry, uninsured, volatile, awkward, unregulated digibuck is gonna replace existing financial systems that answer all bitcoin's shortcomings. The faster and savvy companies and entrepreneurs pull the rug out from the rest of the userbase and the pyramid collapses. Digibuck loses nearly all its value. But, a few frenzied libertarians and nerds sniffing their own farts put money into... Aaaaand on and on. If you look back at the first time the pyramid collapsed, there was a decent progression until around September 2017 when things went fucking crazy leading to the massive price in December 2017, at which point the pyramid scheme winners took their cash and run. So, around three months. People bought into the pyramid scheme again around March 2019, but were a bit more conservative - the price didn't shoot up nearly as high or as fast. Three months later, the pyramid started to topple again, but more slowly and not as devastatingly. It fluctuated after that until a low in March this year. Since then people have been pumping money into the scheme. People are anticipating a big spike, I guess soon we will start to see a big influx of people because it's been "relatively stable" lately, with the pyramid people patiently waiting for a payoff rather than chipping away at the foundation. Of course, as soon as the spike happens it will be a massive plunge down as the pyramid collapses, similar to what we saw in Dec 2017. But, it seems to be an unkillable scam. Even though there's nothing of actual value behind this con, it seems to have really good staying power because it is really hitting some powerful buttons in people's brains:
Get Rich Quick: Yes, even though it is a scam, there are going to be those successful few who walk away with other people's money. If people want to literally gamble by playing chicken with "currency" exchanges, then that's fine (maybe they'll even get luck and win big), but these people need to admit to themselves that bitcoin is only that - gambling. Not an asset, not a currency.
Ideology: It's not just your standard con, it's also bundled itself up with ideals and religiosity. It's an idea! The Internet of money! Libertarianism, utopia, revolution!
Technology: It comes with a veneer of authenticity because it has some real technology supporting it (even if the technology is just...not that great). People are really blown away when they hear vague descriptions of blockchain, words like "node" and "mining" and "private keys".
Hatred: Buttcoiners can be really motivated by hate and bitterness. Their hatred of "greedy banks" and "thieving governments" (legitimate or otherwise, your mileage may vary) seems to really move money.
Fear: If you don't invest in buttcoin, all the money in your bank account with inflate and wither away to nothing! Because inflation is real and not a fabricated boogeyman makes the scam seem more appealing.
In looking over those points, I'm not sure whether it's the technology or ideology that's what's really keeping people from seeing through this con. I mean, anyone could start their own super-duper-coupon company that will only ever produce 21 million coupons. Ok, so the coupons are actually worthless, but if I tell people that one day everyone will use the coupons then suddenly they must have value right? Sounds ridiculous, but if I then say that the super-duper-coupon will be using revolutionary new digital protection, and be supported by a distributed database all over the world, and no government can forge or steal your coupons because of this new zipity-zoop-21 protocol I just developed, suddenly it sounds slightly more appealing. Could just as easily be the ideology though that keeps this con running even after each blow. The amount of purple prose bullshit about freedom and brave new worlds and unlimited prosperity is just crazy. Anyway, I've rambled enough, but wanted to get some thoughts out there after bitcoin enthusiast friends were encouraging me to invest and I did the research. https://preview.redd.it/ucvix7hwwju51.jpg?width=500&format=pjpg&auto=webp&s=220789d26b6f564783dbaef8044e88ca238f0f76
I've had 500,000 TRX since Jan 2018, all I do with it is hold it and generally watch its value against bitcoin decline day after day with the random pump in price every few months only to see it peter out and then resume its decline into oblivion once again. I had a feeling during the SUN mining hype I should have sold but I decided I would continue to hold and mine SUN and of course was met with disappointment because I'm an idiot who buys into Justins hype. Currently I'm staking TRX to vote for SRs but I feel like the rewards I'm getting for that is just a wash as the price vs bitcoin continues to decline. Is there a more profitable action I could take to increase my TRX amount (that isn't gambling)? Or should I just get out now and never look back? Honestly kinda feeling at this point after almost 3 years trx isn't going anywhere but down.
A Detailed Summary of Every Single Reason Why I am Bullish on Ethereum
The following will be a list of the many reasons why I hold and am extremely bullish on ETH.
This is an extremely long post. If you just want the hopium without the detail, read the TL;DR at the bottom.
As we all know, ETH 2.0 phase 0 is right around the corner. This will lock up ETH and stakers will earn interest on their ETH in return for securing the network. Next comes phase 1 where the ETH 2 shards are introduced, shards are essentially parallel blockchains which are each responsible for a different part of Ethereum’s workload, think of it like a multi-core processor vs a single core processor. During phase 1, these shards will only act as data availability layers and won’t actually process transactions yet. However, their data can be utilised by the L2 scaling solution, rollups, increasing Ethereum’s throughput in transactions per second up to 100,000 TPS. After phase 1 comes phase 1.5 which will move the ETH 1.0 chain into an ETH 2 shard and Ethereum will be fully secured by proof of stake. This means that ETH issuance will drop from around 5% per year to less than 1% and with EIP-1559, ETH might become a deflationary asset, but more on that later. Finally, with ETH 2.0 phase two, each shard will be fully functional chains. With 64 of them, we can expect the base layer of Ethereum to scale around 64x, not including the massive scaling which comes from layer 2 scaling solutions like rollups as previously mentioned. While the scaling benefits and ETH issuance reduction which comes with ETH 2.0 will be massive, they aren’t the only benefits. We also get benefits such as increased security from PoS compared to PoW, a huge energy efficiency improvement due to the removal of PoW and also the addition of eWASM which will allow contracts to be programmed in a wide range of programming languages, opening the floodgates for millions of web devs who want to be involved in Ethereum but don’t know Ethereum’s programming language, Solidity.
EIP-1559 and ETH scarcity
As I covered in a previous post of mine, ETH doesn’t have a supply cap like Bitcoin. Instead, it has a monetary policy of “minimum viable issuance”, not only is this is a good thing for network security, but with the addition of EIP-1559, it leaves the door open to the possibility of ETH issuance going negative. In short, EIP-1559 changes the fee market to make transaction prices more efficient (helping to alleviate high gas fees!) by burning a variable base fee which changes based on network usage demand rather than using a highest bidder market where miners simply include who pays them the most. This will result in most of the ETH being paid in transaction fees being burned. As of late, the amount which would be burned if EIP-1559 was in Ethereum right now would make ETH a deflationary asset!
Layer 2 Scaling
In the mean time while we are waiting for ETH 2.0, layer 2 scaling is here. Right now, projects such as Deversifi or Loopring utilise rollups to scale to thousands of tx/s on their decentralised exchange platforms or HoneySwap which uses xDai to offer a more scalable alternative to UniSwap. Speaking of which, big DeFi players like UniSwap and Synthetix are actively looking into using optimistic rollups to scale while maintaining composability between DeFi platforms. The most bullish thing about L2 scaling is all of the variety of options. Here’s a non exhaustive list of Ethereum L2 scaling solutions: - Aztec protocol (L2 scaling + privacy!) - ZKSync - Loopring - Raiden - Arbitrum Rollups - xDai - OMGNetwork - Matic - FuelLabs - Starkware - Optimism - Celer Network - + Many more
DeFi and Composability
If you’re reading this, I am sure you are aware of the phenomena which is Decentralised Finance (DeFi or more accurately, open finance). Ethereum is the first platform to offer permissionless and immutable financial services which when interacting with each other, lead to unprecedented composability and innovation in financial applications. A whole new world of possibilities are opening up thanks to this composability as it allows anyone to take existing pieces of open source code from other DeFi projects, put them together like lego pieces (hence the term money legos) and create something the world has never seen before. None of this was possible before Ethereum because typically financial services are heavily regulated and FinTech is usually proprietary software, so you don’t have any open source lego bricks to build off and you have to build everything you need from scratch. That is if what you want to do is even legal for a centralised institution! Oh, and if you think that DeFi was just a fad and the bubble has popped, guess again! Total value locked in DeFi is currently at an all time high. Don’t believe me? Find out for yourself on the DeFi Pulse website.
NFTs and tokeniation
NFTs or “Non-Fungible Tokens” - despite the name which may confuse a layman - are a basic concept. They are unique tokens with their own unique attributes. This allows you to create digital art, human readable names for your ETH address (see ENS names and unstoppable domains), breedable virtual collectible creatures like crypto kitties, ownable in game assets like Gods Unchained cards or best of all in my opinion, tokenised ownership of real world assets which can even be split into pieces (this doesn’t necessarily require an NFT. Fungible tokens can be/are used for some of the following use cases). This could be tokenised ownership of real estate (see RealT), tokenised ownership of stocks, bonds and other financial assets (which by the way makes them tradable 24/7 and divisible unlike through the traditional system) or even tokenised ownership of the future income of a celebrity or athlete (see when NBA player Spencer Dinwiddie tokenized his own NBA contract.)
Ethereum is by far the most widely adopted blockchain by enterprises. Ethereum’s Enterprise Ethereum Alliance (EEA) is the largest blockchain-enterprise partnership program and Ethereum is by far the most frequently leveraged blockchain for proof of concepts and innovation in the blockchain space by enterprises. Meanwhile, there are protocols like the Baseline protocol which is a shared framework which allows enterprises to use Ethereum as a common frame of reference and a base settlement layer without having to give up privacy when settling on the public Ethereum mainnet. This framework makes adopting Ethereum much easier for other enterprises.
One of Bitcoin’s biggest things it has going for it right now is the growing institutional investment. In case you were wondering, Ethereum has this too! Grayscale offers investment in the cryptocurrency space for financial institutions and their Ethereum fund has already locked up more than 2% of the total supply of ETH. Not only this, but as businesses transact on Ethereum and better understand it, not only will they buy up ETH to pay for their transactions, but they will also realise that much like Bitcoin, Ethereum is a scarce asset. Better yet, a scarce asset which offers yield. As a result, I expect to see companies having ETH holdings become the norm just like how Bitcoin is becoming more widespread on companies’ balance sheets.
The state of global markets
With asset prices in almost every asset class at or near all-time highs and interest rates lower than ever and even negative in some cases, there really aren’t many good opportunities in the traditional financial system right now. Enter crypto - clearly the next evolution of financial services (as I explained in the section on DeFi earlier in this post), with scarce assets built in at the protocol layer, buying BTC or ETH is a lot like buying shares in TCP/IP in 1990 (that is if the underlying protocols of the internet could be invested in which they couldn’t). Best of all, major cryptos are down from their all-time highs anywhere between 35% for BTC or 70% for ETH and much more for many altcoins. This means that they can significantly appreciate in value before entering uncharted, speculative bubble territory. While of course we could fall dramatically at any moment in the current macro financial conditions, as a longer term play, crypto is very alluring. The existing financial system has shown that it is in dire need of replacing and the potential replacement has started rearing its head in the form of crypto and DeFi.
Improvements in user onboarding and abstracting away complexity
Ethereum has started making huge leaps forward in terms of usability for the end user. We now have ENS names and unstoppable domains which allow you to send ETH to yournamehere.ETH or TrickyTroll.crypto (I don’t actually have that domain, that’s just an example). No longer do you have to check every character of your ugly hexadecimal 0x43AB96D… ETH address to ensure you’re sending your ETH to the right person. We also have smart contract wallets like Argent wallet or the Gnosis safe. These allow for users to access their wallets and interact with DeFi self-custodially from an app on their phone without having to record a private key or recovery phrase. Instead, they offer social recovery and their UI is straight forward enough for anyone who uses a smart phone to understand. Finally, for the more experienced users, DApps like Uniswap have pretty, super easy to use graphical user interfaces and can be used by anyone who knows how to run and use a browser extension like Metamask.
The lack of an obvious #1 ETH killer
One of Ethereum’s biggest threats is for it to be overthrown by a so-called “Ethereum killer” blockchain which claims to do everything Ethereum can do and sometimes more. While there are competitors which are each formidable to a certain extent such as Polkadot, Cardano and EOS, each have their own weaknesses. For example, Polkadot and Cardano are not fully operational yet and EOS is much more centralised than Ethereum. As a result, none of these competitors have any significant network effects just yet relative to the behemoth which is Ethereum. This doesn’t mean that these projects aren’t a threat. In fact, I am sure that projects like Polkadot (which is more focused on complimenting Ethereum than killing it) will take a slice out of Ethereum’s pie. However, I am still very confident that Ethereum will remain on top due to the lack of a clear number 2 smart contract platform. Since none of these ETH killers stands out as the second place smart contract platform, it makes it much harder for one project to create a network effect which even begins to threaten Ethereum’s dominance. This leads me onto my next reason - network effects.
This is another topic which I made a previous post on. The network effect is why Bitcoin is still the number one cryptocurrency and by such a long way. Bitcoin is not the most technologically advanced cryptocurrency. However, it has the most widespread name recognition and the most adoption in most metrics (ETH beats in in some metrics these days). The network effect is also why most people use Zoom and Facebook messengeWhatsApp despite the existence of free, private, end to end encrypted alternatives which have all the same features (Jitsi for the zoom alternative and Signal for the private messenger app. I highly recommend both. Let’s get their network effects going!). It is the same for Bitcoin. People don’t want to have to learn about or set up a wallet for alternative options. People like what is familiar and what other people use. Nobody wants to be “that guy” who makes you download yet another app and account you have to remember the password/private key for. In the same way, Enterprises don’t want to have to create a bridge between their existing systems and a dozen different blockchains. Developers don’t want to have to create DeFi money legos from scratch on a new chain if they can just plug in to existing services like Uniswap. Likewise, users don’t want to have to download another browser extension to use DApps on another chain if they already use Ethereum. I know personally I have refrained from investing in altcoins because I would have to install another app on my hardware wallet or remember another recovery phrase. Overthrowing Ethereum’s network effect is one hell of a big task these days. Time is running out for the ETH killers.
Ethereum is the most decentralised and provably neutral smart contract platform
Ethereum is also arguably the most decentralised and provably neutral smart contract platform (except for maybe Ethereum Classic on the neutrality part). Unlike some smart contract platforms, you can’t round up everyone at the Ethereum Foundation or any select group of people and expect to be able to stop the network. Not only this, but the Ethereum foundation doesn’t have the ability to print more ETH or push through changes as they wish like some people would lead you on to believe. The community would reject detrimental EIPs and hard fork. Ever since the DAO hack, the Ethereum community has made it clear that it will not accept EIPs which attempt to roll back the chain even to recover hacked funds (see EIP-999). Even if governments around the world wanted to censor the Ethereum blockchain, under ETH 2.0’s proof of stake, it would be incredibly costly and would require a double digit percentage of the total ETH supply, much of which would be slashed (meaning they would lose it) as punishment for running dishonest validator nodes. This means that unlike with proof of work where a 51% attacker can keep attacking the network, under proof of stake, an attacker can only perform the attack a couple of times before they lose all of their ETH. This makes attacks much less financially viable than it is on proof of work chains. Network security is much more than what I laid out above and I am far from an expert but the improved resistance to 51% attacks which PoS provides is significant. Finally, with the US dollar looking like it will lose its reserve currency status and the existing wire transfer system being outdated, superpowers like China won’t want to use US systems and the US won’t want to use a Chinese system. Enter Ethereum, the provably neutral settlement layer where the USA and China don’t have to trust each other or each other’s banks because they can trust Ethereum. While it may sound like a long shot, it does make sense if Ethereum hits a multi-trillion dollar market cap that it is the most secure and neutral way to transfer value between these adversaries. Not to mention if much of the world’s commerce were to be settled in the same place - on Ethereum - then it would make sense for governments to settle on the same platform.
ETH distribution is decentralised
Thanks to over 5 years of proof of work - a system where miners have to sell newly minted ETH to pay for electricity costs - newly mined ETH has found its way into the hands of everyday people who buy ETH off miners selling on exchnages. As pointed out by u/AdamSC1 in his analysis of the top 10K ETH addresses (I highly recommend reading this if you haven’t already), the distribution of ETH is actually slightly more decentralised than Bitcoin with the top 10,000 ETH wallets holding 56.70% of ETH supply compared to the top 10,000 Bitcoin wallets which hold 57.44% of the Bitcoin supply. This decentralised distribution means that the introduction of staking won’t centralise ETH in the hands of a few wallets who could then control the network. This is an advantage for ETH which many proof of stake ETH killers will never have as they never used PoW to distribute funds widely throughout the community and these ETH killers often did funding rounds giving large numbers of tokens to VC investors.
Finally, while I may be biased, I think that Ethereum has the friendliest community. Anecdotally, I find that the Ethereum developer community is full of forward thinking people who want to make the world a better place and build a better future, many of whom are altruistic and don’t always act in their best interests. Compare this to the much more conservative, “at least we’re safe while the world burns” attitude which many Bitcoiners have. I don’t want to generalise too much here as the Bitcoin community is great too and there are some wonderful people there. But the difference is clear if you compare the daily discussion of Bitcoin to the incredibly helpful and welcoming daily discussion of EthFinance who will happily answer your noob questions without calling you an idiot and telling you to do you own research (there are plenty more examples in any of the daily threads). Or the very helpful folks over at EthStaker who will go out of their way to help you set up an ETH 2.0 staking node on the testnets (Shoutout to u/superphiz who does a lot of work over in that sub!). Don’t believe me? Head over to those subs and see for yourself. Please don’t hate on me if you disagree about which project has the best community, it is just my very biased personal opinion and I respect your opinion if you disagree! :)
ETH 2.0 - Huge scaling and better tokenomics.
EIP-1559 and ETH scarcity - ETH issuance will be super low and could go negative in the coming years.
Layer 2 Scaling - Literally dozens of different solutions/projects. Many of which are live on mainnet now.
DeFi and Composability - Money legos and open source code allowing for fast development and unprecedented innovation in the world of finance.
NFTs and tokenisation - Tokenise everything. No, seriously.
Institutional Adoption - Ethereum has the most enterprise partners (EEA) + the Baseline protocol is bullish AF.
Institutional Investment - Grayscale investments now owns 2% of ETH supply and growing. With institutional adoption comes awareness of the benefits of being an ETH holder and staker. ETH will complement the growing trend of companies holding Bitcoin.
The state of global markets - Crypto is just about the only asset class not at an ATH and the system Ethereum wants to replace is looking very broken.
Improving UX and abstracting away complexity - Human readable addresses and smart contract wallets which even your mother could use.
The lack of an obvious #1 ETH killer - No ETH killer clearly sticks out from the rest. This makes it hard for one of them to create a big network effect.
Network effects - Ethereum has by far the largest network effect and as Bitcoin has shown us, the network effect is extremely important.
Ethereum is the most decentralised and provably neutral smart contract platform - Super secure under ETH 2.0, no more tolerance of DAO like forks and a neutral platform for adversaries like the US and China to transact on so that they don’t have to trust each other’s banks.
ETH distribution is decentralised - Years of proof of work have put ETH in the hands of many. ETH supply is more decentralised than Bitcoin.
The community - Super duper mega friendly. Shoutout to the kind folks the EthFinance daily!
Bitcoin 'mining' as it is called, relies on a complicated cryptographic math problem that miners all compete to solve - the first one to do so is rewarded with a block of newly minted bitcoins and ... bitcoin mining free bitcoin mining free bitcoin pool cryptocurrency mining crypto mining cloud mining asic miner honeyminer btc miner bitminer bitcoin mining machine bitcoin mining rig bitcoin mining hardware bitcoin cloud mining gpu mining btc pool bitcoin mining pool bitcoin cloud pi cryptocurrency antminer s15 best bitcoin miner asic miner value free cloud mining bitcoin pool best gpu for ... Bitcoin mining saps energy, costly, uses more power and also the reward delays. For mining, run software, get your wallet ready and be the first to solve a cryptographic problem and you get your reward after the new blocks have been added to the blockchain.Mining is said to be successful when all the transactions are recorded in the blockchain and the new blocks are added to the blockchain. Bitcoin miners help keep the Bitcoin network secure by approving transactions. Mining is an important and integral part of Bitcoin that ensures fairness while keeping the Bitcoin network stable, safe and secure. Links. We Use Coins - Learn all about crypto-currency. Bitcoin News - Where the Bitcoin community gets news. Bitcoin Mining: (Noch) profitabel. BitOoda liefert auch eine Einordnung darüber, was es aktuell kostet, eine Bitcoin-Einheit (BTC) zu minen. Unsere Schätzungen der Kostenkurve ergeben durchschnittliche Kosten für das Minen von 1 BTC von etwa 5.000 US-Dollar, mit einer oberen Grenze von etwa 6.000 US-Dollar. Bei dieser Schätzung handelt es sich um Cash-Betriebsausgaben, die weder ...
How To Mine 1 Bitcoin in 10 Minutes - Blockchain BTC Miner ...
What is Bitcoin Mining? - Duration: 1:56. BitcoinMiningCom Recommended for you. 1:56. Best Binary Options Strategy 2020 - 2 Minute Strategy LIVE TRAINING! - Duration: 43:42. BLW Online Trading ... Step 1: Mining Link: https://coinpot.co/mine/dogecoin/?ref=C8E36D930CE4 (Updated) (If browser mining not support you just follow next steps!) Send Phrase as ... از طریق این سایت با کمی صبر و حوصله به یک سرمایه خوب و واقعی میرسید موفق باشید لینک عضویت در ... Is mining Bitcoin BTC still profitable in 2020? Let's review mining profitability, Bitcoin, Bitcoin Cash, and Bitcoin SV. Block reward halving, network difficul... SUBSCRIBE AND PARTICIPATE IN MY GIVE AWA'S THANK YOU FOR WATCHING https://youtu.be/nQJrgYhQpLg ----- 👇👇👇👇👇👇👇👇👇👇👇👇 https://youtu.be ...