Connect with us

Blockchain

Blockchains Unlock Institutions with Internet Scale

Reading Time: 4 minutes From Promises Enforced by Law to Promises Enforced by Code Blockchains are the first technology ever invented that gives software systems the ability — without trusted intermediaries — to make highly credible promises. These promises are enforced by a novel combination of technological innovations spanning peer-to-peer networking, encryption, and consensus mechanisms. The first blockchain was […]

The post Blockchains Unlock Institutions with Internet Scale appeared first on BlockchainCapital.

Republished by Plato

Published

on

Reading Time: 4 minutes

From Promises Enforced by Law to Promises Enforced by Code

Blockchains are the first technology ever invented that gives software systems the ability — without trusted intermediaries — to make highly credible promises. These promises are enforced by a novel combination of technological innovations spanning peer-to-peer networking, encryption, and consensus mechanisms.

The first blockchain was created in 2009 by Satoshi Nakamoto as a solution to the long-standing problem of how to create a digital currency that operates outside of the control of banks and governments. This solution was named Bitcoin, and it successfully coordinated the establishment and maintenance of a new, independent system of money that is native to the internet. Bitcoin works and has grown magnificently because it makes several very important promises that are deemed highly credible by the individuals and businesses who use it.

The invention of blockchains represents a paradigm shift because the institutions that coordinate resources and activities in human society are fundamentally built on promises.

Take for instance the banking system, which we fund in exchange for promises to help us save and invest, operate businesses, and manage financial risks; or the legal system, which we fund in exchange for a promise to enforce a set of societally and economically beneficial rules; or the institution of the US Dollar, which we fund in exchange for promises to facilitate trade and maintain economic stability.

With blockchains, we can represent many of these promises in software. But why would we want to do that?

Today’s Institutions Will Not Scale for the Internet Age

The aforementioned institutions (along with many others) have pushed society forward immeasurably and have greatly improved our standard of living, but they have critical limitations that have only become clear over the last several decades — namely, in an increasingly global world, their promises don’t extend across borders, and too often those promises are broken altogether, in ways that irreversibly destroy trust and hinder progress.

This insight leads to the understanding that blockchains, by providing a means of making stronger promises, are an institutional innovation that has arrived at a most opportune time. They are a technology that enables us to architect new types of institutions that are purpose-built for a global, internet-connected society.

The World Needs Scalable Institutions

As we continue to transition from life driven by analog institutions and fragmented across national boundaries, to an internet-based, digital-first society, the need for globally scalable institutions has never been greater.

The internet sector made up over 10% of US GDP in 2018 and grew 9 times faster than the US economy as a whole from 2012 to 2018. It is likely that the GDP of the Internet will far surpass that of any individual nation-state within the next decade or two.

This underscores the potential gravity of the opportunity presented by blockchains: in a world defined by instant, global communication and global markets, what types of institutions will people use to coordinate resources and economic activities?

Bitcoin Exposed Latent Demand for New Institutions

The growth of Bitcoin and the ecosystem surrounding it serves as evidence that blockchain-based institutions have the potential to fill in the gaps left by our analog institutions and allow the internet economy to thrive. In its first 10 years of life, Bitcoin has facilitated over $2 trillion worth of money transfers and has spawned one of the most liquid, global marketplaces in the world.

On the back of its growth, some of the world’s fastest growing startups in history have flourished — the crypto brokerage Coinbase grew from 0 accounts to more than 30 million in 5 years, vastly outpacing the reach of traditional brokerages, and the crypto exchange Binance generated over $1 billion in cumulative profit less than 3 years after launching.

These are not merely vanity stats; the first use case of blockchain, internet-native money, offers tangible benefits that no other form of money has ever been able to offer. In particular, Bitcoin is the first form of money that is resistant to inflation, censorship, and involuntary seizure, and it is accessible to anyone in the world with an internet connection.

These properties make it attractive to a number of different parties:

1) to investors, as a form of digital gold;

2) to people that reside in countries with weak or restrictive monetary systems, as a means of participating in the global economy; and

3) to businesses that facilitate large amounts of cross-border trade, as a cheap and efficient means of settlement.

The use case for money alone has a total addressable market in the tens of trillions, and the growth of internet-native money will propel blockchain startups to a much greater scale than they have already achieved.

From Money to Other Institutions

Outside of money, a generation of entrepreneurs are asking what other blockchain-based institutions might be able to flourish in the internet age, and there are exciting early developments spanning the fields of financial services, identity, cloud computing, social networks, and more. In financial services, new institutions are being created to fundamentally rethink how lending, trading, investing, and insurance could be architected for the internet economy.

The promise of these institutions is to offer similar benefits to Bitcoin: highly secure, tamper-proof services that mitigate counterparty risk and are accessible to all people with an internet connection.

These new institutions are not replacements for our analog institutions. Rather, they augment their capabilities and extend the places that we are able to do business with the comfort that promises will be delivered on. Simply put, these developments have the potential to expand the size of the internet economy by orders of magnitude.

Where Are We Today?

Today we’re at a critical juncture in this technology’s arc of evolution. Only in the last several years has it become clear that Bitcoin has been a successful experiment, but the tools to make it widely usable have not yet reached maturity, making apt an analogy to the internet before Netscape.

However, all future blockchain-based applications benefit from the infrastructure build-out that Bitcoin has catalyzed, and vice versa. This is particularly relevant in light of major new entrants to the space both from the financial world (Fidelity, Square), Big Tech (Facebook/Libra) and governments (China’s central bank digital currency), who will contribute to this infrastructure build-out and may ultimately serve as massive on-ramps to a blockchain-powered digital economy.

If Bitcoin’s growth so far is any indication of the potential of internet-centric institutional innovation, the blockchain space is positioned to offer many attractive investment opportunities with asymmetric return profiles, both in new institutions directly and in the ecosystems that form around them.


Thanks to Spencer Bogart and Kinjal Shah for reviewing.

Source: https://blockchain.capital/blockchains-unlock-institutions-with-internet-scale/

Blockchain

65% Say They Would Consider Selling Bitcoin If The Price Reaches $100,000

Republished by Plato

Published

on

The cryptocurrency market has enjoyed the past several months with impressive gains, including all-time highs for bitcoin and several more tokens.

As such, a couple of crypto analysts initiated Twitter polls to ask the community when they plan to sell their positions and realize profits.

How Much Would You Sell At The Next BTC Top

The primary cryptocurrency has led the 2020/2021 bull run. Bitcoin had quadrupled its value since early October when it dabbled with the $10,000 mark to an all-time high of $42,000 charted earlier this year.

Despite retracing with a few thousand dollars, BTC is still about 10% up in 2021 alone. This has raised discussions within the community if or when most plan to dispose of some of their holdings.

Crypto analyst Josh Rager took it to Twitter to ask: “how much Bitcoin from your holdings do you plan to sell at the next peak high?”

Interestingly, the answer that received the most votes (34.4%) suggests that investors plan to dump most, if not all, BTC holdings in case of another price peak.

However, it’s also worth noting that a very close percentage (31.6%) said that they would sell less than 25% of the BTC positions.

While some comments indicated that many investors plan to hold their coins even beyond the next peak, others noted that each cycle has its top and subsequent retracement. Consequently, they advised even the most die-hard HODLers to consider profit taking at some point.

At What Price Would You Sell?

Another poll initiated by the popular analyst Filb Filb shed some light on the price targets that BTC investors are looking for to sell.

The majority of the participants noted that they would start to “think hard about selling some bitcoins” once the asset price goes into a six-digit territory. Over 40% would do that at prices ranging from $100,000 to $300,000, while 26.3% would wait to see BTC beyond $300,000.

However, Nugget News’ Alex Saunders opposed the idea of expecting a fiat price to sell the BTC holdings, especially during these times of economic uncertainty:

“Those who fully understand Bitcoin know there is no fiat price you should sell for if they are increasing M1 & M2 by 30% unless you absolutely must purchase something tangible that is of great value to you personally.”

SPECIAL OFFER (Sponsored)
Binance Futures 50 USDT FREE Voucher: Use this link to register & get 10% off fees and 50 USDT when trading 500 USDT (limited offer).

PrimeXBT Special Offer: Use this link to register & enter CRYPTOPOTATO35 code to get 35% free bonus on any deposit up to 1 BTC.

You Might Also Like:


Source: https://cryptopotato.com/65-say-they-would-consider-selling-bitcoin-if-the-price-reaches-100000/

Continue Reading

Blockchain

Why Bitcoin denominated payments won’t be mainstream anytime soon

Republished by Plato

Published

on

The support of top payment giants like PayPal is promising for building the case of mainstream Bitcoin payments. However, Bitcoin’s rapidly increasing price in the USD poses a tough challenge for the adoption of Bitcoin denominated payment systems. A number of altcoins are rallying alongside Bitcoin, and making payments in cryptocurrencies may not be the preferred choice for many. Just as Nic Carter, Partner at Castle Island Ventures puts it in his talk with Frances Coppola, renowned economist, and author, “I always regret it when I buy stuff with Bitcoin”. With returns of nearly 27.6% YTD, Bitcoin payments may not pick up anytime soon. Denominating Bitcoin in the USD makes it a lucrative investment opportunity and limits its adoption to traders and investors looking at it as a wealth-generating high-risk, high-ROI asset. This limitation is sure to hinder the adoption of Bitcoin denominated payments. 

The volatility and network momentum that is critical to Bitcoin’s adoption is a double-edged sword. The same volatility that is increasing the price, is making it less lucrative for traders and individuals to part with their Bitcoin. Through active involvement and buying from institutions, the bull run may receive boosts from time to time, however, the impact may end there. With regard to Bitcoin’s growth, this may not be the ‘Eureka’ moment that maximalists and proponents have waited for. It is more likely that the current price rally is an incentive to trade and adopt, however, adoption may be the game-changer. 

Currently, the number of transactions has exceeded the monthly volume since January 2017 based on data from Statista. 

Why Bitcoin denominated payments won't be mainstream anytime soon

Number of Bitcoin Transactions/ Monthly transaction volume || Source: Statista

The chart shows that the number of transactions in January 2021 has exceeded that of the past 3 years since January 2017. However, even the current transaction volume is nowhere close to the expected transaction volume. When mainstream adoption kicks in, transaction volume and price may no longer be significant metrics, as more critical metrics like transaction processing time, settlement time on exchanges, deposit and withdrawal time to and from wallets would be of greater significance. Until then, Bitcoin’s mainstream adoption may be a pipe dream. 

Source: https://ambcrypto.com/why-bitcoin-denominated-payments-wont-be-mainstream-anytime-soon

Continue Reading

Blockchain

Cardano, Cosmos, BAT Price Analysis: 17 January

Republished by Plato

Published

on

Cardano flipped the $0.32 to support and showed that it was on the verge of breaking past $0.385 resistance as it neared its 2-year highs. Cosmos posted rapid gains over the past few days and was retracing some of those gains. Basic Attention Token was rejected once more at a level of resistance that has been steadfast since late November.

Cardano [ADA]

Cardano, Cosmos, BAT Price Analysis: 17 January

Source: ADA/USDT on TradingView

The price of ADA has grown enormously over the past month as it nears highs last seen in May 2018. The $0.385 level can be expected to offer resistance.

A double-top formed in the region of $0.32 saw ADA initially rejected a week ago, but since, the level has been flipped to support. The Directional Movement Index showed that a strong uptrend was on the verge of being established, as the ADX crept up toward the 20 value.

In other news, Charles Hoskinson commented on Jack Dorsey’s Twitter post about a decentralized standard for social media and expressed that the crypto sphere could contribute value.

Cosmos [ATOM]

Cardano, Cosmos, BAT Price Analysis: 17 January

Source: ATOM/USD on TradingView

ATOM formed a rising wedge, and closed beneath it to test support at the $5.2-$5 region, and saw a strong surge thereafter. It reached a local high of $9.6 rapidly but might be forced to retrace some of those gains.

The Fibonacci retracement tool showed that the 38.2% level at $7.48 is in close proximity to the $7.5 region that has previously acted as a pocket of liquidity. There is also the $7.8 level of support immediately above to halt selling pressure.

The MACD, which had been strongly bullish over the past week, might soon see a bearish crossover form to indicate short-term bearishness.

The $7.8-$7.5 region is of vital importance. Defense of this region will pave the way for a move to the upside while losing this region will see a further retracement to the $6.9 level.

Basic Attention Token [BAT]

Cardano, Cosmos, BAT Price Analysis: 17 January

Source: BAT/USD on TradingView

The $0.27 has been a level BAT has failed to flip to support since late November, despite testing it several times. The range formed (cyan) grows in importance the longer BAT trades within it.

The past few trading sessions saw a strong surge just past $0.27, but subsequent selling pressure forced the price back beneath and indicated yet another rejection. This development points at a move back toward the mid-point at $0.232 for BAT.

The Stochastic RSI and the RSI were dropping lower at the time of writing.

Source: https://ambcrypto.com/cardano-cosmos-bat-price-analysis-17-january

Continue Reading
Blockchain5 days ago

‘Crypto is exactly like dot com bubble; Bitcoin, Ethereum can survive it’

Blockchain5 days ago

Brian Brooks, Crypto-Friendly OCC Leader, Steps Down

Blockchain1 day ago

Will exchanges run out of Ethereum?

Blockchain5 days ago

Trader comforts the market’s traumatized first timers amid falling prices

Blockchain5 days ago

How the OCC Is Building Crypto America (and Saving Banks From Extinction)

Blockchain4 days ago

SolidX Sues VanEck Over Bitcoin ETF Plagiarism

Blockchain5 days ago

Uniswap’s growth lead bites back over Yearn Finance’s SushiSwap merger

Blockchain4 days ago

Crypto Lawyer Sees Incoming SEC Chair as a Win for Bitcoin, Not XRP

Blockchain5 days ago

EX-CFTC Chair Gary Gensler Poised to be SEC Lead, What to Expect for Bitcoin?

Blockchain5 days ago

Fidelity International Increases Stake In A Hong Kong Cryptocurrency Exchange Operator

Blockchain4 days ago

Update on Ethereum 2.0 Staking Rewards

Blockchain5 days ago

‘Why I’m not investing in nothing burger Bitcoin’: Shark Tank’s Kevin O’Leary

Blockchain2 days ago

Consob Blocks 6 New Illegal FX Websites

Blockchain5 days ago

Landmark Real Estate Listing Offers Two New York Bars For 25 Bitcoin

Blockchain4 days ago

WAX launches new token model to share revenue earned from NFT sales

Blockchain4 days ago

EOS Price Analysis: 13 January

Blockchain4 days ago

SIMBA Chain receives $1.5M contract from the U.S. Office of Naval Research

Blockchain5 days ago

Market Wrap: Bitcoin Hovers Around $34.2K While Options Traders Pay Up for Possible ETH Upside

Blockchain5 days ago

Amid price lows, Bitcoin correction seen as healthy and temporary

Blockchain5 days ago

Here’s how MicroStrategy CEO intends to get more companies to buy Bitcoin

Trending