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Why Most Educated People Don’t Understand Bitcoin

Misir Mahmudov, a widely-followed and respectedRead More →

The post Why Most Educated People Don’t Understand Bitcoin appeared first on Crypto Core Media.

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Misir Mahmudov, a widely-followed and respected bitcoin (BTC) analyst, has argued that “most educated people fail to appreciate bitcoin because they only specialize in one field.” In order to truly understand how bitcoin works, Mahmudov, a financial economics student at Columbia University, recommends having some grasp of basic computer science and economics concepts.

He has also suggested learning more about cryptography, game theory, central banking, psychology, and distributed systems. Having some idea about these fields, Mahmudov notes, should help people in truly appreciating bitcoin and what it aims to offer. While pursuing their undergraduate studies, most people usually choose one or two main areas of focus such as economics, business studies, or a more technical discipline such as computer or mechanical engineering.

Those who are more interested in gaining a deeper understanding of how the human mind works, or how nation states are formed, might decide to major in social sciences such as psychology, sociology, and international politics. However, it is difficult, if not impossible, to become a master of all these subjects. But that may not be necessary in order to understand why Bitcoin is one of the most important inventions in modern history. 

First proposed in a whitepaper published in November 2008 by its pseudonymous creator, Satoshi Nakamoto, the Bitcoin protocol specifies how an electronic peer-to-peer (P2P) cash system should work. For the first time, modern cryptographic techniques were applied to create what’s now a multi-billion dollar experiment in monetary theory. 

Understanding The Importance Of Purchasing Power And Deflationary Assets

Unlike fiat currencies, which are inflationary as central banks can print an unlimited amount of paper money, there can never exist more than 21 million bitcoins. Being able to understand the implications of this when it comes to purchasing power requires some research into the various problems related to the fiat-based currency system. In countries like Zimbabwe and Venezuela, the national currency has become practically worthless because it’s being created and controlled by a poorly managed centralized bank. Mismanagement of a nation’s money system by a single entity has led to hyperinflation in several areas of the world, which has made the cost of acquiring basic goods and services practically unattainable for the millions of citizens in these developing countries. 

Acquiring The Background Necessary To Understand Arguments About Bitcoin

While prominent economists such as NYU professor, Dr. Nouriel Roubini, have argued that cryptocurrencies will not be successful in the long-term, there are other well-known economists such as Dr. Saifedean Ammous who firmly believe that Bitcoin’s decentralized value transfer system is a superior form of money. Although we may not agree with all the viewpoints expressed by Roubini or Ammous, our ability to interpret and analyze their arguments about decentralized cryptocurrencies would improve if we were more familiar with economic theories.

With Bitcoin being the first deflationary asset that has been adopted at a relatively large scale, the concept of scarcity and how it relates to an asset’s ability to become a long-term store-of-value (SoV) is perhaps best understood and articulated by former Google engineer, Vijay Boyapati. According to Boyapati, who’s known for his convincing arguments about why the world’s most dominant cryptocurrency will become a great SoV, Bitcoin has “never been useful as a medium-of-exchange (MoE) because the opportunity cost of using it as such is huge. The only people who can stomach that cost are people for whom the transaction cost of not using Bitcoin is even bigger than the opportunity cost (i.e., illicit market trades).”

Understanding Bitcoin At The Psychological Level

Although Boyapati appears to have a professional and academic background only in mathematics and computer science (as detailed in his LinkedIn profile), he has been able understand how and why Bitcoin could evolve into a legitimate currency and a globally recognized asset. As he has explained using many different examples and scenarios, Bitcoin would have to work effectively as a unit of account, MoE, and a SoV in order to become a currency that is widely accepted by merchants worldwide. 

In addition to involving concepts from economics and technical disciplines such as computer science, Bitcoin has to be understood at the psychological level. Before a currency or asset becomes widely accepted, people need to feel comfortable using it. The more confident people are about something, the more receptive they will be towards (at least) trying it, in order to determine whether it will suit them or work for them. 

In places where the country’s citizens have lost trust in the national currency and financial system due to corruption, it will become increasingly difficult for the same centralized institutions to regain the same level of trust they once took for granted. Because decentralized currencies like Bitcoin are designed to minimize trust, as they don’t require intermediaries to settle transactions, it can be challenging at first to become comfortable with this idea. 

Becoming Comfortable Conducting Transactions Without Intermediaries

Becoming familiar with how Bitcoin transactions are transparently recorded on block explorers can give people the confidence they need to start using blockchain-based currencies. Put simply, a blockchain is a type of data structure that allows multiple parties to engage in transactions without requiring a trusted intermediary. In most cases, a counterparty is also not needed when conducting cryptocurrency transactions. 

When the average person is first introduced to these crypto-related concepts, it can be challenging to fully understand how a monetary system like this could actually work. After carefully reviewing how a blockchain is designed to function, it becomes easier to start grasping how a decentralized digital currency such as Bitcoin can be reliably used to pay for goods and services. 

In the coming years, cryptocurrency-related technology is expected to improve and a larger percentage of the world’s population will likely begin using the internet to learn and engage in business activities. Many believe that Bitcoin and other decentralized coins and tokens may just become a widely-accepted part of Web 3.0, which is a term used to refer to new and evolving set of protocols that will be used to power the internet in the future.

Source: https://cryptocoremedia.com/why-most-educated-people-dont-understand-bitcoin/

Blockchain

PayPal in Talks To Buy Crypto Storage Startup Curv for Around $500 Million, Reports

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PayPal could be in talks to buy a cryptocurrency startup focused on providing security solutions for cryptocurrency custody.

According to diferent reports, PayPal is interested in acquiring Curv, and the talks between the two companies’ teams are an open secret in the global tech scene – though perhaps no longer a secret considering how quickly it is spreading despite the cautious stance taken by both companies.

Local sources argue that the cost of the deal would be in the range of $500 million. This amount would exceed the expectations of Curv’s development team, which hoped to rake in between $200 million and $300 million from the company’s sale.

What is Curv and Why Does it Matter?

Curv has developed an encryption technology based on multi-party computation that secures digital assets and enables the secure transfer Store and any digital asset management on any blockchain. Its platform makes it possible for a Wallet to generate private keys at different points simultaneously, distributing them between the cloud and the client, eliminating possibilities of single points of failure.

Considering the services Curv provides, it stands to reason that an acquisition would be beneficial to PayPal. It would allow it to evolve and likely increase security and user confidence in its crypto services.

It could even allow PayPal to have a native cryptocurrency custody solution, reducing costs in the long run.

So far, no company has given public statements acknowledging or rejecting the news.

Paypal’s Interest in Crypto Grows Every day

PayPal’s interest in cryptocurrencies has only grown as institutional investment, regulatory clarity, and, of course, the price of digital assets increase.

Months after the March 2020 crash, PayPal announced a partnership with Paxos to provide its customers with exposure to the price of Bitcoin, Ethereum, Bitcoin Cash, and Litecoin.

The idea was to enable some cryptocurrency operations in a secure, easy, and legal way. The initiative was a massive success for PayPal, and the price of Bitcoin rose to new all-time highs. A study conducted by Mizuho Securities found that by the en of 2020, one fifth of all PayPal users had some exposure to Bitcoin and 65% of PayPal users were interested in crypto.

Dan Schulman, CEO of Paypal said on an official press release, that the use of digital currencies was inevitable, and governments need to hit the gas pedal and adapt their policies to the innovations of the modern era:

“The shift to digital forms of currencies is inevitable, bringing with it clear advantages in terms of financial inclusion and access; efficiency, speed and resilience of the payments system; and the ability for governments to disburse funds to citizens quickly”

Subsequently, reports leaked that PayPal was attempting to acquire BitGo; however, the talks never came to fruition.

If PayPal buys Curv, the quality of cryptocurrency-related services could increase considerably, not only helping to appreciate the value of the company’s stock but proving the validity of PayPal’s strategy of investing in cryptocurrency goods and services rather than buying cryptocurrencies for speculation or storing value.

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Source: https://cryptopotato.com/paypal-to-buy-crypto-storage-startup-curv/

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Polygon-based QuickSwap’s TVL grows by $75M in two weeks

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Polygon-based DEX QuickSwap hasattracted more than $105 million in worth of liquidity since the start of 2021.

The Uniswap clone began the year with only $300,000 worth of assets locked in its protocol, with more than three quarters of the exchange’s total value locked being added in the past fortnight.

QuickSwap is currently the leading second-layer decentralized exchange by daily volume with $38.5 million worth of trades over the past 24 hours. The second-largest L2 DEX by volume is Loopring with $8.4 million, followed by ZKSwap with $2.5 million.

QuickSwap’s governance token, QUICK, surged from under $1 per token to $557 in three months, and currently represents nearly 20% of the protocol’s total liquidity. Other popular tokens on the exchange include Wrapped Ether, USD Coin, maUSDC, and Wrapped Matic.

Speaking to Cointelegraph, QuickSwap founder Nick Mudge attributed the exchange’s recent success to the user’s that Aavegotchi brought to Polygon after launching its NFT staking game on Jan. 21.

With more than 80 tokens driving more than $23 million in daily trade volume, Mudge believes QuickSwap is a cornerstone of Polygon’s nascent DeFi ecosystem, predicting the two will grow symbiotically:

“QuickSwap is the center of the Polygon DeFi ecosystem and will grow as the ecosystem grows. QuickSwap and its liquidity mining incentives were a solution to move the users to Polygon and give them a Uniswap experience with very low gas fees.”

Polygon, a scaling solution allowing projects to create Ethereum-compatible blockchains, has benefited from the crippling gas fees that have recently made many Ethereum-powered DeFi protocols too expensive for casual users.

MATIC, the native crypto of Polygon, has posted meteoric gains this year, rising 1,135% from $0.0182 to $0.2249 over 2021 so far.

Source: https://cointelegraph.com/news/polygon-based-quickswap-s-tvl-grows-by-75m-in-two-weeks

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Blockchain

TA: Bitcoin Turns Attractive Above $50K, Why BTC Could Rally To $55K

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Bitcoin price extended its rise and cleared the $50,000 resistance against the US Dollar. BTC is now consolidating gains and it is likely to climb further above $52,000.

  • Bitcoin is trading in a positive zone above the $50,000 and $50,500 support levels.
  • The price is now trading well above $51,000 and the 100 hourly simple moving average.
  • There is a major bullish trend line forming with support near $49,800 on the hourly chart of the BTC/USD pair (data feed from Kraken).
  • The pair could extend its rally once it clears $52,000 and $52,500 in the near term.

Bitcoin Price is Gaining Momentum

After a close above the $48,000 resistance, bitcoin was able to gain strength above the main $50,000 resistance. BTC even cleared the $51,500 level and spiked above the $52,000 level.

It traded to a new monthly high near $52,650 and settled well above the 100 hourly simple moving average. It is now trading in a positive zone above the $50,000 and $50,500 support levels. There was a minor correction recently below the $51,000 level.

The price traded below the 23.6% Fib retracement level of the upward move from the $47,102 swing low to $52,648 high. However, the bulls were active near the $50,000 and $49,500 levels.

Bitcoin Price

Source: BTCUSD on TradingView.com

There is also a major bullish trend line forming with support near $49,800 on the hourly chart of the BTC/USD pair. Bitcoin also remained well above the 50% Fib retracement level of the upward move from the $47,102 swing low to $52,648 high.

It is now trading above $51,000 and testing a connecting bearish trend line at $51,500. A clear break above the trend line resistance could open the doors for a move towards the $52,500 and $53,200 levels. The next key resistance sits near the $55,000 level.

Fresh Dip in BTC?

If bitcoin fails to continue higher above the $52,000 and $52,500 resistance levels, there could be a minor decline. The first key support on the downside is near the $50,500 level.

The next major support is near the $50,000 level and the trend line. If there is a downside break below the trend line support, the price could test the $48,000 support and the 100 hourly SMA.

Technical indicators:

Hourly MACD – The MACD is now gaining momentum in the bullish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now well above the 50 level.

Major Support Levels – $50,500, followed by $50,000.

Major Resistance Levels – $51,500, $52,000 and $53,200.

Source: https://www.newsbtc.com/analysis/btc/bitcoin-btc-could-rally-55k/

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