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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.
By The Numbers: The Rate Bitcoin Must Climb To Reach $100K By July
Bitcoin is a numbers game through and through. There are only 21 million BTC. The code and its consensus algorithm are both made up of complex math. The total coins are slashed in half every four years, and so on and so fourth.
Most important of all, here’s the growth rate Bitcoin price must hit steadily to reach $100K per BTC by July 2021 according to one crypto capital manager – as well as the one thing that could get in the way.
Bitcoin Price Growth Rate Should Take Crypto Valuation To $100K By July
Bitcoin’s growth from virtually worthless to more than $60,000 per » Read more
” href=”https://www.newsbtc.com/dictionary/coin/” data-wpel-link=”internal”>coin came to be reads as if it was ripped from a sci-fi film: Mysterious person takes a shot at all money, and takes no credit for the monumental effort.
” href=”https://www.newsbtc.com/dictionary/satoshi/” data-wpel-link=”internal”>Satoshi’s creation is now more than a decade old and has grown far beyond most people’s expectations. Over the last year alone, the leading cryptocurrency by market cap has grown at a daily average rate of 0.65% since April, resulting in a nearly a ten times climb in value.
At the current pace, according to crypto capital manager Timothy Peterson, Bitcoin price would reach $100K by June 30th.
At only a daily growth rate of 0.64% the top crypto should hit $100K by July | Source: BTCUSD on TradingView.com
The One Factor That Could Cause BTC To Fall Short Of Target
Bitcoin price must maintain comparable momentum over the last year to keep climbing at a similar rate and reach more than $100K per » Read more
” href=”https://www.newsbtc.com/dictionary/coin/” data-wpel-link=”internal”>coin. The number is now closer to the current price action than $10K is, and thus potentially more achievable.
Price predictions for the next cycle top reach as much as $400K, with estimates more steeped in reality ranging from $125,000 to $325,000 per BTC.
The rally could really be over if the historically accurate signal is right again | Source: BTCUSD on TradingView.com
There’s a chance, however, the cycle top is in, according to the Pi Cycle Top Indicator. If the historically accurate tool is right yet again, the leading cryptocurrency’s daily growth rate will begin to decline from here on out until another bull market breaks out.
Bitcoin price wouldn’t make it to $100K by July, and a return to prices much lower would follow. If that’s the case, crypto investors would have to wait a while longer for the number one cryptocurrency by market cap to reach that ultimate target.
Featured image from Deposit Photos, Charts from TradingView.com
Bitcoin’s time has come: TIME magazine to hold BTC on balance sheet
Institutional fund manager Grayscale has partnered with acclaimed New York-based magazine TIME to produce an educational video series on the subject of crypto assets.
The partnership was announced on April by Grayscale’s CEO, Michael Sonnenshein, with Sonnenshein revealing that TIME and its president, Keith Grossman, will receive payment in Bitcoin.
Further, TIME does not intend to convert the Bitcoin it receives through the deal into fiat, and will hold the crypto asset on its balance sheet. No further details of the partnership have been revealed so far.
— Michael Sonnenshein (@Sonnenshein) April 12, 2021
TIME was first published on March 3, 1923, with the magazine and online publication having been active in the crypto space of late. In March, TIME cashed in on the NFT mania by dropping a set of tokenized magazine covers on NFT marketplace SuperRare, with the “TIME Space Exploration – January 19th, 1959” NFT fetching 135 ETH worth almost $250,000 on March 30.
“The media industry is undergoing a rapid evolution. TIME is seeking a Chief Financial Officer who can help guide its transformation,” the listing said.
According to Bitcointreasuries.com, TIME will become the 33rd publicly traded company to hold Bitcoin on its balance sheet. TIME joins the ranks of top U.S. companies Microstrategy — who have invested billions into BTC from August 2020, Square — who added 4,709 BTC to their treasury in October, and Tesla — which purchased $1.5 billion worth of BTC in January. Multinational investment corporation Blackrock also began dabbling in crypto during February, profiting more than $360,000 from a small long using Bitcoin futures.
This deal marks a significant partnership between giants of the mainstream and crypto worlds. Grayscale was founded in 2013 and has $46 billion worth of crypto assets under management, including roughly 3% of Bitcoin’s total circulating supply.
Moonstake integrates with Sylo to bring their staking protocol to the Sylo Smart Wallet
Moonstake, a staking pool protocol and service provider, has announced a new partnership with Sylo, a decentralized software development firm and the creators of the Sylo Network and Sylo Smart Wallet.
Through this collaboration, Moonstake will connect Sylo with their robust API/SDK solution, thereby enabling staking functionalities in the Sylo Smart Wallet and allowing Sylo users to earn passive income from their idle crypto assets.
Founded in 2010, Sylo is committed to decentralization and has created an ecosystem consisting of digital consumer wallet software, applications, infrastructure, and developer tools in order to usher in a decentralized future worth looking forward to.
A unique wallet app that combines digital asset management with decentralized communication, the Sylo Smart Wallet is a savvy decentralized e-wallet that enables users to purchase, store, track, send, and receive crypto assets, explore the world of Ethereum dApps by means of a Web3 Browser, pay with cryptocurrency in the real world, and provides secure communications by chat or audio/video call.
“We’re pleased to offer our community of global users yet another way to access the benefits of crypto. As always, our user flow has been designed with simplicity in mind, and staking via Moonstake in the Sylo Smart Wallet will make earning from digital assets simple enough for people everywhere.”
– Dorian Johannink, Co-Founder and Business Director of Sylo
Born over a year ago with the aim to create the largest staking network in Asia, since its inception Moonstake has developed highly user-friendly wallets for both Web and Mobile (iOS/Android) that are compatible with over 2000 cryptocurrencies.
After a full-scale operational launch in August 2020, Moonstake’s total staking assets have grown rapidly to reach USD 800 million in staked assets over just six months. Within a year of its founding, Moonstake became ranked in the top 10 of the world’s premier staking service providers and it continues to strongly expand its business.
“The Sylo Smart Wallet is an interesting e-wallet that combines the functionality of a flexible digital asset management tool and a secure instant messaging app. We are happy to help proper crypto projects like Sylo enable staking in their wallet so that users can have more ways to earn with crypto. With a wide selection of PoS coins and attractive yield rates from our high-quality staking pools, we are confident that users will be pleased with their staking experience on Sylo powered by Moonstake.”
– Mitsuru Tezuka, Founder of Moonstake