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Busting Myths Around BLOCKCHAIN Ecosystem & Cryptocurrencies

The idea of Blockchain came into existence around 1991. But it’s only around 2008, credit to the whitepaper from Satoshi Nakamoto on “Bitcoin: A Peer to Peer Electronic Cash System”, the platform on which a bitcoin could be utilized started becoming popular. As the decentralized and digitalized currency seemed promising as an alternative, the framework […]

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The idea
of Blockchain
came into existence
around 1991. But it’s only around 2008, credit to the whitepaper from Satoshi
Nakamoto on “Bitcoin: A Peer to Peer Electronic Cash System”, the platform on
which a bitcoin could be utilized started becoming popular. As the
decentralized and digitalized currency seemed promising as an alternative, the
framework on which it functions came into limelight, and hence people
started taking Blockchain Ecosystem earnestly
.
The blueprint of blockchain initially focused on financial services only. But
after observing and examining its potential, the architecture started being
employed in several other industries as well.

Inter-Connection between Cryptocurrencies, Stablecoins,
and CBDC’s:

For someone who knows the inside-out of
the financial industry may observe the connecting points between Cryptocurrencies,
Stablecoins, and Central Bank Digital Currencies (CBDC)
.
For a layman, he/she may view these terms as different iPhones coming into the market
or the updates for the software making it more efficient. In the initial
interval since blockchain’s entrance, several hurdles came across in the forms
of scams, phishing, etc leading to the increment of volatility in the
structure. Just like in the scenario of the entrance of the World Wide Web,
with empirical evidence, the overall structure got modified. As
cryptocurrencies started being prominently utilized around 2014, various frauds
also occurred in that interval. Due to numerous cases of volatility being
compromised, Multinational Corporations and other stakeholders lost a big
proportion of money. To compensate and fix the issue, stable-coins came into
the picture. One key factor among others which appealed stakeholders because of
its similarity with traditional currency. That objective is acting as a store
of value and a medium of exchange and a unit of account as well.

A stablecoin at the core is a
cryptocurrency that maintains a stable value concerning the target price like
the US Dollar. Mostly, stablecoins combine the algorithmic techniques along
with the management of supply. Doing so makes the market incentivize by making commerce
the coin for $1 or less. A stablecoin unlike other cryptocurrencies can minimize
the exchange rate of volatility but isn’t entirely open and permission-less. Technically
speaking, stablecoins are fabricated over Ethereum Blockchain Protocol. The
reason for it is to swiftly modify the compatibility of the freshly issued
asset along with the pre-existing infrastructure. The most recent modification with
regards to stablecoins is in corporate governance. Specifically,
crypto-exchanges, clearinghouses, and many more to come can be categorized
under Electronic Shares on a Distributed Ledger. In a nutshell, the recent
version of stablecoins may establish an architectural layer for crypto assets.
Theoretically and practically as well, stablecoin could become the norm for
usage as it can permit liquidity to exchanges. To make the blockchain ecosystem
enter the mainstream financial institutions, CBDC’s would have to imbibe such
newer digital currencies and invest in them to regain the people’s trust.
Observing and using such technologies in daily activities will make them
(individuals utilizing the technology) want to use blockchain,
cryptocurrencies, stablecoins, consciously, or unconsciously.

Cryptocurrencies perceived as Speculative Bubbles:

The most recent bubble in the technology
industry was the dotcom bubble also referred to as the internet bubble. A
bubble or one may also call it an illusion, starts with an assumption that firms
in which venture capitalists invest may deliver profits in the future. But due
to several factors like non-genuine technology, discarding financial
accountability, focusing more on brand building, etc, the bubble or the
illusion busted. At the core, a
speculative bubble
can be examined and
deduced of consisting economical and behavioral factors. A bubble is defined as
a scenario where the circulation or the broadcasting of some information
propels the investor’s eagerness psychologically from one individual to another.
Economists and people in the Financial Services Industry as well have
scrutinized prior bubbles busted. Some common factors/biases include:

  1. Purchasing an overvalued
    commodity even after knowing it beforehand.
  2. Building expectations based
    on preceding prices.
  3. Thoughtful disparity.
  4. Herd behavior.
  5. Overconfidence.
  6. Fear of missing out.
  7. Exaggerated optimism.

According to Hyman Minsky, an American
economist, there consists of 5 phases in a life-cycle of a bubble, namely:
Displacement, Boom, Euphoria, Profit-Taking, Panic phase. In the displacement
phase, investors commence intriguing about a fresh idea’s prototype. In the
boom phase, a slight increase in the price is observed. The third phase or the
euphoria phase experiences a tricky scenario where a commodity is purchased at
an overvalued price knowing about it beforehand, just to sell it to an amateur
at a higher rate. In the profit-taking phase, financial institutions, institutional
investors, and several others start identifying a forthcoming crash and selling
assets for a profit before the bubble bursts (specifically those who’re able to
detect the unavoidable crash). In the last stage, the price of the
asset/commodity starts collapsing gradually.

The internet bubble happened around the mid-1990s
to 2002. The initiation took place with the launch of the Mosaic browser. The
displacement phase took off in 1993, as people were getting new ideas to do
business online, and fresh regulations to back them up. Credit to that, more
companies began opening up, and hence, more investors started investing in
firms being operated through World Wide Web. This made the entrance of the boom
phase. With investors becoming overly optimistic and confident, the euphoria
stage entered the picture. The simple reason being, the NASDAQ index indicated
a value of around 500 in the initial 1990s, while it reached 5048 in March
2000. As a large percentage of Dot-com firms believed the motto, “get big
fast”, the profit-taking phase started around 2000. Various pieces of research
imply that as the blockchain ecosystem is in its growth phase, stablecoins,
cryptocurrencies, and alike digital currencies would be of big aid in the long
term.

Functional Approach against boasting of Regulatory Uncertainty:

Individuals or firms mostly tend to go
against the Rules and Regulations because of uncertainty in the policy designed
and implemented, loopholes not getting rectified, political or personal
vendetta, etc. As the overall Blockchain
Ecosystem’s policies and regulations

are still underway, some portion of the population has started boasting about
the regulatory uncertainty out of fear or constructive criticism. There’s a
saying in the sales and marketing field, “one should know the appropriate time,
place, medium of communication, and the psyche of the consumer to convince them
to purchase or think of buying a product/service”. Similarly, thorough research
needs to take place before implementing a policy, and that to which has a
nature of modifying constantly depending upon numerous variables. A premature
regulatory or postmature regulatory would have certain drawbacks and not offer
a desirable result. On one side, the blockchain
architecture and applications

run through it updates quickly, while policy drafting and implementing on the
ground is a time-taking process.

Political, Personal, and Economical Hurdles:

There are quite a handful of people who
prefer to view everything from a pessimistic perspective. Few economists who
might be renowned globally for their contributions in the area of economics,
but don’t know much about the latest technology, and still want to offer their
point-of-view just for namesake. One illustration of it is an individual by the
name Nouriel
Roubini
. The individual may not a lot about
economics, but not much about the inside-out of the technology. Him making a
decision that may impact hundreds of thousands of lives (socially,
technologically, economically) would not be a good idea. An individual or a
group of individuals who have expertise in both the financial industry and
technology industry should be allowed to make pivotal decisions and not create
fear among the population across the world just for their personal or political
gains.

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Blockchain

What Coinbase Going Public Could Do For Crypto

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Messari Values Coinbase At Nearly $30 Billion As The Bitcoin Exchange Prepares To Officially Go Public

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Coinbase, the biggest US-based cryptocurrency exchange has disclosed its detailed plan for the upcoming direct listing on the stock market by Nasqad. Coinbase submitted an S-1 report to the US SEC outlining key information such as revenue and ownership structure for investors to carry out due diligence on the company.

According to the document, Coinbase has 43 million verified users and an average of 2.8 million transactions per month. In 2020, the company returned a net income of $322 million from total revenue of $3.4 billion, with transaction fees constituting 96% of the net revenue.

Coinbase which makes most of its profit from bitcoin and Ethereum transactions, also saw a 56% increment on its $1.1 billion direct revenue for 2020 compared to $482 million in 2019.

The company incurred a total of $880 million in expenses for 2020, most of which went to sales, general administrative expenses, and research and development. Transaction reversal costs miners fees, staking fees, and verification expenses constituted $135 million of the total expenses,

Coinbase also made $533 million in 2019, against $579 million in operational and development costs, leading to losses totaling $46 million.

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Coinbase to Usher Crypto’s Real Mainstream Adoption

The report indicates that much of the revenue for 2020 was generated from institutional investors’ activity in the crypto market but with higher retail activity in Q4 2020 than in previous quarters.

Coinbase’s debut as the first publicly listed crypto-exchange in the US is estimated to be one of 2021’s largest new listings of the tech industry. This will have a huge positive impact on the crypto market investors and blockchain technology backers.

According to the crypto trader and analyst Rekt Capital, the public listing will officially open up cryptocurrencies to the public.

“Coinbase going public is another way of saying crypto is going public.”

Coinbase Becomes Decentralized

The update comes a month after Coinbase chose Nasdaq as its direct listing avenue on February 1, following a secondary Coinbase stock launch by Nasdaq Private Market on January 25.

Now that Coinbase has moved to a remote-first environment without headquarters in any city, the company is referring to itself as a decentralized company. Up to 95% of Coinbase employees have the option to work at home, in a post-office world setting, or a mix of both.

“since we’ve made the decision to go remote-first we’ve decentralized ourselves; even after people can safely return to offices, the executive team has no plans to be “in-office” on a regular basis,  and none of them currently live in San Francisco.”


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The views expressed in the article are wholly those of the author and do not represent those of, nor should they be attributed to, ZyCrypto. This article is not meant to give financial advice. Please carry out your own research before investing in any of the various cryptocurrencies available.

Source: https://zycrypto.com/what-coinbase-going-public-could-do-for-crypto/

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Blockchain

3 types of bitcoin investors that ‘should be concerning to central banks’

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With 106 million global crypto users as of January 2021 and a crypto population that has now surpassed 100 million, a financial expert noted that central banks must now be wary of certain crypto investors. In a new seminar held by the University of Pennsylvania’s Wharton School, part-time professor, Mohamed El-Erian, who is also Chief Economic Adviser at Allianz said that Central Banks should be careful about three specific groups of Bitcoin investors. 

He explained that while the first group of people is investing for positive reasons, the second is motivated by negative factors to adopt Bitcoin. The positive investors “truly believe Bitcoins will become money ”or “a currency as opposed to a commodity.” 

However, El-Erian cautioned that central bank authorities must keep watch on those “being pushed out of everything else and pushed into Bitcoin”, forming the second group that the expert earlier mentioned. 

They look to Bitcoin in order to protect themselves from government investment options, which some investors believe has been “artificially jacked up.” Interestingly, a recent survey found that people aged over 55 opted for Bitcoin due to a fear of currency devaluation – as central banks have historically printed more money to boost economies. The expert said that such people are forced to invest in the asset because “they don’t know how else to mitigate risk.” 

Do you really want to invest in a government bond whose price has been? So ‘let’s diversify, let’s put 2% into Bitcoins.’

El-Erian further categorized “speculators” as the third type of investors, who face profits and losses albeit “in a single day.” According to him, all three types of investors “should be concerning to central banks.”

When it’s trading above $50,000, all three messages are problematic for central banks. So, we are going to see central banks look increasingly at cryptocurrencies as something they should be involved in, and not just stand on the sidelines.


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Source: https://ambcrypto.com/3-types-of-bitcoin-investors-that-should-be-concerning-to-central-banks

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Blockchain

Exchange listings and NFT boom back Enjin’s (ENJ) 52% rally to a new high

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Non-fungible tokens (NFT) are rapidly becoming a focal point of the cryptocurrency market as evidenced by stories of millions of dollars being raised in minutes for one-of-a-kind tokenized art pieces and rare collectibles that traders rush to get their hands on. 

One project that has been benefiting greatly from the resurgence of NFTs is Enjin Coin (ENJ), which broke out to a new all-time high of $0.67 on Feb. 25 following its listing on the Crypto.com exchange as well as the launch of spot and perpetual futures trading on FTX.

Data from Cointelegraph Markets and TradingView shows that ENJ rose 52% from a low of $0.438 on Feb. 24 to a new high of $0.67 before experiencing a pullback to its current price of $0.611.

ENJ/USDT 4-hour chart. Source: TradingView

A scroll through the project’s Twitter feed details numerous recent partnerships and integrations that have helped fuel Enjin’s price rise.

Minecraft is one of the most notable integrations for the Enjin ecosystem and users are able to earn special NFTs that unlock secret games inside the video game series.

The platform has also benefited from joining forces with the growing ecosystem of the Binance Smart Chain (BSC), which has launched an NFT educational campaign that Enjin will be part of.

VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for ENJ on Feb. 24, several hours before today’s price rise.

The VORTECS™ score, exclusive to Cointelegraph, is an algorithmic comparison of the historic and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.

VORTECS™ Score (green) vs. ENJ price. Source: Cointelegraph Markets Pro

As seen on the chart above, the VORTECS™ score for ENJ reached a high of 70 on Feb. 24, shortly before the price began to spike to a new all-time high on Feb. 25.

The growing popularity of the NFT space, along with numerous big-name partnerships has Enjin well-positioned as the current bull market cycle progresses into 2021.

Its recent integration with the BSC provides a way to escape high fees on the Ethereum (ETH) network and could bring a new wave of activity to the Enjin ecosystem.

Source: https://cointelegraph.com/news/exchange-listings-and-nft-boom-back-enjin-s-enj-52-rally-to-a-new-high

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