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Bitcoin: An Answer in Search of A problem

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My thoughts after a year of listening to the crypto evangelists

Over the past year, I have consumed a lot of crypto-related content. Not because I seek it out, but because every writer and podcaster in the financial world has been covering it. I tried my best to ignore Bitcoin, but it’s become impossible as it completely dominates discussion in financial media.

In 2021 I began researching Bitcoin and cryptocurrencies with an open mind. I try my best to make evidence-based decisions with my money. In my crypto research, I was looking for some real evidence that this is something beyond a speculative asset.

Surely, with all of the hype, there must be some truly world-changing applications of Bitcoin. In all of the interviews I’ve listened to from the crypto evangelist’s over the past year, I have never heard a convincing answer to the following question:

What problem are cryptocurrencies, like Bitcoin, actually solving?

And if anyone can ever answer that question, I have a follow up:

Is it worth all of the negative externalities?

In this article, I lay out my skepticism of crypto. If you are a crypto true believer, my intent is not to offend but to offer a counterpoint to the common arguments I hear in favor of crypto.

Did you know 1/3 of all dollars were created in the past 12 months?

Anyone who has read a piece making the case for Bitcoin has without a doubt seen some statistic about the mass “money-printing” that’s about to lead to currency debasement and mass inflation.

It sounds terrifying, which is the entire point. Like with any evangelist, the crypto boosters need a good story to recruit new converts. If what you’re selling is a new currency, the logical story to push is that the old currencies are dying.

The floods are coming, but don’t worry we’ve already built the arks.

If one of the core value propositions of an investment is that the world is ending, you should be very skeptical and begin asking a lot of questions.

Here’s the first question you should ask before investing in crypto

Is there actually any evidence that mass inflation is coming?

Yes, we have printed a lot of money over the past 10 years.

So, what?

If you listen to the crypto boosters for long enough, you will begin to believe inflation has been the greatest economic challenge of our time.

Except it isn’t.

The only problem with inflation is that until very recently, we haven’t had enough of it.

A little bit of inflation is a good thing as it means there is strong demand for goods and services in the economy. Annual inflation in the 2%-3% range is a sign of a healthy economy.

If inflation was consistently running over 4%, we might have a real problem on our hands.

Do you know how many times inflation has been over 4% in the past 10 years?

Zero.

In fact, it’s only been over 3% once, and that was back in 2011. Over the past decade, inflation has struggled to crack 2% most years. This is summarized nicely in this chart;

So, yes, the impacts of inflation have been greatly exaggerated.

I recently attended a lecture from an agricultural economist at The University of Guelph, who presented a few simple statistics that perfectly summed up what a non-issue inflation has been.

  • In 1935 a carton of eggs caused 31 cents in Canada.
  • In 2008 it cost $2.57.

That a 730% increase! Look at that currency debasement; fiat currencies are on the verge of collapse!

Here’s a much more useful way of looking at the “true cost” of a carton of eggs.

  • In 1935 a Canadian worker earning an average income had to work over 100 minutes to earn enough wages to buy a carton of eggs.
  • In 2008 the average worker had to work less than 10 minutes to buy a carton of eggs.

In terms of time spent working, the cost of a carton of eggs dropped by 90%.

The true cost of anything is how many hours you need to work to buy it.

It’s easy to spin a story about currency debasement looking at the top line inflation numbers over a very long time period. But what we should be concerned about is not inflation but standard of living.

If the value of a dollar declines by 2.5% and I get a 2.5% pay raise, my standard of living remained unchanged, so why do I care?

The gold standard was a bad system, which is a problem for crypto

A common narrative surrounding Bitcoin is that it’s “the new gold.” Indeed, the crypto boosters make a lot of the same arguments that the gold bugs make. Money printing, currency debasement, economic catastrophe, and all that.

If Bitcoin is the new gold, it would be terrible to have Bitcoin or similar cryptocurrencies as the primary means of exchange. At one point, the dollar and many other fiat currencies were tied to the value of gold.

I’d recommend reading this article from money and banking dot com for a detailed breakdown of why the gold standard was a terrible idea.

The biggest takeaways:

  1. The year-to-year variance in inflation was much higher under the gold standard.
  2. Deflation was much more prominent under the gold standard. Deflation is a much bigger problem for the economy than inflation and is often harder to combat.
  3. The variance in economic growth was much higher under the gold standard. Recessions, often painful ones, were much more common than under the fiat model.

If Bitcoin were to replace the dollar, we could expect similar levels of economic volatility.

Change does not mean things will be better. It just means things will be different.

Bitcoin’s massive energy use is finally in the spotlight

Bitcoin has a massive carbon footprint and consumes more energy than the entire country of Argentina, which has a population of 45 million. If you are worried at all about climate change, then you really need to stop and consider if it’s ethical to buy Bitcoin.

As the price of Bitcoin rises, so will Bitcoin mining activities and, along with it, CO2 emissions. This is the stated reason that Tesla stopped accepting Bitcoin as a form of payment. Buying an electric car with Bitcoin is kind of like buying solar panels with a bag of coal; any environmental benefits are instantly wiped out.

When you think about fossil fuel energy, it obviously has a huge carbon footprint, but we put up with it because that energy is vital (for now) to the global economy.

  • If all the oil in the world instantly vanished, the global economy would fall into a crippling depression.
  • If all the Bitcoin in the world instantly vanished, it would not impact the economy in any meaningful way because 12-years after its creation, Bitcoin plays no meaningful role in daily economic activities.

All the makings of a bubble

If you believe markets are efficient, it’s difficult to predict a bubble before it happens.

For all the reasons discussed in this article, I can’t think of many markets that are less efficient than Bitcoin. It appears that Bitcoin has two primary uses.

  1. To facilitate Ransomeware attacks.
  2. Speculative trading.

Is the cryptocurrency market a bubble waiting to pop?

Possibly.

If it is, that could be one of the greatest things to happen to cryptocurrency. In the 2000s, the dot com stock market bubble burst, and a lot of companies went under, and investors lost their shirts. But from the ashes rose Amazon, which has become one of the most dominant businesses in history.

If the crypto market crashes hard, could we see Bitcoin or some other cryptocurrency rise from the ashes?

Possibly.

But for that to happen, they will need a compelling answer to my original questions: what problem is this actually solving, and is it worth the negative externalities?

Source: https://themakingofamillionaire.com/bitcoin-an-answer-in-search-of-a-problem-e0876e591f64?source=rss——-8—————–cryptocurrency

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ConsenSys Backed Virtue Poker and Binance NFT to Launch “Mystery Box” for Celebrity Tournament on Sept 23

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Source: https://www.newsbtc.com/news/company/consensys-backed-virtue-poker-and-binance-nft-to-launch-mystery-box-for-celebrity-tournament-on-sept-23/

The crypto and blockchain space is maturing at a rapid pace. Most financial industry experts agree that this nascent industry is here to stay because there are many different use-cases emerging for blockchain-enabled platforms.

In addition to the rise of Bitcoin (BTC) as a widely accepted medium-of-exchange and store-of-value, Ethereum (ETH) has become a globally recognized name in the crypto space. Large corporations such as Visa have acknowledged Ethereum’s role in the future of finance and its ability to support a wide range of other applications.

A growing number of online platforms have also been deploying solutions on Ethereum, despite its relatively slow transaction speeds. Even though there are many other blockchains that outperform Ethereum in terms of transactions per second (TPS) and cheaper transaction costs, they do not have the same powerful network effect that Ethereum has been able to acquire. There are also many Ethereum scaling solutions such as Polygon that will aim to make the leading smart contract platform a lot more efficient in the foreseeable future.

Yet Another Ethereum-powered Platform

Virtue Poker, a decentralized platform developed on the Ethereum (ETH) blockchain, reveals that it will be holding a Celebrity Charity Poker Tournament, which will be taking place on September 26, 2021.

The charity poker tournament participants will reportedly include Hall of Fame (HOF) poker player, Phil Ivey, former NBA all-star Paul Pierce, YouTube’s superstar Mr. Beast, TRON blockchain founder and serial crypto entrepreneur Justin Sun, Hollywood actor and accomplished filmmaker Vince Vaughn, Polygon Co-Founder Sandeep Nailwal, and Ethereum Co-Founder and ConsenSys founder Joe Lubin.

The Binance Mysterybox Collection

To commemorate this special event, the Virtue Poker team plans to launch a Binance MysteryBox collection, starting on September 23, 2021 –  representing each card in a typical 52 card deck. Collectors who possess the winning hand for each knockout during the Celebrity Event will get a chance to win prizes ranging from $2,500 to a $25,000 reward for the top prize.

Participants need to purchase two mystery boxes in order to assemble a hand. The participants can then trade with each other so that they can assemble the best poker hand through the secondary market.

The Mystery box will reportedly include an Ace of Spades that will come with Phil’s digital signature and a $5,000 prize.

Prizes

All participants with completed hands can compete and have an opportunity to win:

A $2500 price for the winning hand for each knockout. If multiple players own the hand, then the $2500 prize will be split equally among all the winners. Furthermore, the player who possesses the championship knockout hand will be able to claim a $25,000 prize.

If more than one player is holding the championship knockout hand, then only 1 player will be randomly selected to claim the reward

Participants are able to collect as many as (50) completed hands (100 boxes). Participants must also HOLD the winning hand in their Binance account to be eligible for the rewards. Winning players should email [email protected] for confirmation.

Freeroll Tournament

Virtue Poker will also hold a freeroll tournament where ALL holders of (2) mystery boxes should be getting exclusive access to participate in a $10,000 free-roll tournament on the Virtue Poker platform.

Virtue Poker NFT holders need to send a message to [email protected] with their UID and NFT screenshot to obtain the Virtue Poker referral code.

Supporting NFT Use-Cases

The Virtue Poker team is looking forward to hosting their Celebrity Tournament and are focused on offering a truly unique NFT experience for their viewers that plan to tune in. Through their partnership with leading crypto exchange Binance, they plan to support the adoption of the Virtue Poker platform and also that of NFTs. They’ve decided to take this step to show that there’s yet another real-world use case for non-fungibel tokens or digital collectibles: interacting through a live event.

The team has also thanked the Virtue Poker community for their support of their platform as they continue to expand their ecosystem in the nascent blockchain-enabled gaming industry.

As noted in the announcement, Virtue Poker is described as a decentralized poker platform that leverages the Ethereum blockchain as well as P2P networking to offer an online poker platform that is safe, “honest” and fun. It was established in 2016 within New York-based Consensys, the leading Ethereum development studio and incubator launched by crypto billionaire and Ethereum co-founder Joe Lubin back in 2014.

Backed by Consensys and stakeholder Phil Ivey, Virtue Poker aims to make blockchain or distributed ledger tech (DLT)-powered betting mainstream.

Source: https://www.newsbtc.com/news/company/consensys-backed-virtue-poker-and-binance-nft-to-launch-mystery-box-for-celebrity-tournament-on-sept-23/

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Cabital To Facilitate Euro And Cryptocurrency Swaps Through SEPA Intergration

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Source: https://www.newsbtc.com/news/cabital-to-facilitate-euro-and-cryptocurrency-swaps-through-sepa-intergration/

Users of Cabital can now change their Euro to cryptocurrency, thanks to a recent integration by the digital asset institution. The Single Euro Payments Area facilitates such changes, plus making cashless payments in EUR through direct debit and credit transfer.

Cabital is a platform where users can sell, buy, or save crypto. It offers opportunities to earn passive income on savings.

Related Reading | Bitcoin Holders Take Profits As Price Falls, Indicators Remain Bullish? 

According to them, you can make 12% APY on cryptocurrency with them. Moreover, there are no hidden fees, and the institution is secured and registered in the European Union.

SEPA Facilitates Direct investment In Cryptocurrency Assets

By integrating this payment method, Cabital has boosted its services and automatically increased its patronage. All the 36 SEPA EU countries can use the service to buy and sell their crypto for Euro. Users can also change their cryptocurrency holdings to Euros and vice versa anytime they want.

The best part is that the payments will be safer, faster, and efficient without hidden charges. Users can make direct debit or credit transfers to even non-EU countries.

The institution disclosed the information yesterday, September 21, and its CEO Raymond Hsu stated that they would be rendering full-service to their users. In his statement, the CEO said the platform will help both EU countries and non-EU countries to manage and save their crypto without hassles.

Hsu also stated that this move has also given Cabital a competitive edge over its competitors. The company can pursue expansion across Europe and secure on-ramps to support its customer’s cryptocurrency investments.

Before this announcement, Cabital had completed a seed round that generated $4 million. The leaders of the round were GSR, SIG, and Dragonfly. The firm also had an angel round that generated $3 million. Now, the valuation of Cabital sits at $40 million.

Cabital And Regulations

The firm is regulated by the Republic of Lithuania laws. They operate under the guidelines of the “Lithuanian Anti-Money Laundering & Counter-terrorism Financing Rules.” According to Jonas Narbutas, the Senior Money Laundering Reporting Officer at Cabital, the firm fully adheres to cryptocurrency regulations.

Cryptocurrency

Crypto-market is back of recovery track by a 4% rise | Source: Crypto Total Market Cap on TradingView.com

Also, it is contributing towards developing the EU’s crypto industry and helping people in the region and beyond to achieve their investment goals safely and easily. Jonas Narbutas is one of the newly appointed leadership team members at Cabital. He was earlier working at Western Union and also headed the Luminor Group anti-financial governance team.

Related Reading | Did Turkey’s President Say “We Are In A War Against Bitcoin”? An Investigation

On its official website, Cabital assures users of being protected by strong fireblocks against cyber-attacks on users’ assets. Moreover, the team is experienced in investment both in crypto and beyond. As a result, users can rely on their expertise to expand their crypto portfolio with high-yield assets.

Featured Image From Finance Monthly, chart from TradingView.com

Source: https://www.newsbtc.com/news/cabital-to-facilitate-euro-and-cryptocurrency-swaps-through-sepa-intergration/

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XRP Unfazed by New Turn in SEC vs. Ripple Case

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You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

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Source: https://cryptobriefing.com/xrp-unfazed-by-new-turn-in-sec-vs-ripple-case/?utm_source=main_feed&utm_medium=rss

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