Tag: Force in Dormancy

The last episode of the epic Education: Evolution of Money VII, "Force in Dormancy," is all about the stuff y'all have been waiting for. Crypto, Crypto, Crypto! Enjoy the Grande Finale and hop into their free channel to get more exciting stuff! The Evolution of Money Series 🔹Part I: The Past, Present, and the Future 🔹Part II: The Age of Shylocks and Banking 🔹Part III: The Gold Standard of Money and the Rothschild Banking 🔹Part IV: The Attack of the FED 🔹Part V: The Commercial Banks Strike Back 🔹Part VI: A New Hope 🔹Part VII: The Force in Dormancy The Evolution of Money SeriesFilling the Holes in the Leaking Cryptocurrency HopeCryptocurrency and human emotionEvolution of Money VII: "Banks vs Crypto"Evolution of Money VII: A world without moneyEvolution of Money VII: Understanding the Crypto Craze DeceptionEvolution of Money VII: The centralization risk problem of cryptoThe problem of centralized cryptocurrency miningCrypto distribution could have been betterCentralized exchangesThe stablecoins questionThe future of centralized cryptosIs cryptocurrency a freedom fallacy?Bitcoin FuturesEvolution of Money VII: What next? Filling the Holes in the Leaking Cryptocurrency Hope Money has come a long way since it did not exist. At some point, a chain of beads, a disk of iron, a slab of silver, a bar of gold, and even a slip of paper served to be the most valuable thing in human societies around the world. All these forms of currency are worthless at face value. After all, you cannot eat them when hungry, they cannot light a fire to keep you warm in the dead of the night, and they cannot cure a disease when you feel unwell. But still, their value comes from the simplest belief that they can be exchanged for almost anything else – food, warmth, medicine. Whether you believe cryptocurrency to be the future of money or not, you will agree that, since barter trade, every type of currency in history has, at some point, been the greatest invention that societies have ever come across. If you familiarize yourself with the details of how it came to be accepted, you will also encounter one or more groups of influential people who resist it on the grounds that it is new and strange. It is no wonder, however, that you will still come across some bigwigs, top on the list being economist Nouriel Roubini, billionaire Warren Buffett, and author David Gerard. Most banks were initially anti-crypto, but many have gradually invested heavily in developing and accepting these digital assets as money. JP Morgan Bank, one of the largest banks in the world, was on the front lines dismissing Bitcoin, but a short while later, it launched JPM Coin. Predictably, just a short while after getting into the cryptocurrency business, JPMorgan was caught engaging in underhanded Bitcoin price manipulation in Sweden. You can read about it on JQ. Cryptocurrency and human emotion In Evolution of Money VII, we let you know an open secret: Cryptocurrencies are highly volatile. Like any other money, rides are driven by their global demand. Bitcoin is not immune to the political, social, and economic forces that, in turn, are driven by other factors whose outcomes are determined by human emotions and needs (or greed). This means that although a currency is distributed, it can still be manipulated and used as a tool of modern-day slavery that has defined every other currency in history. Hackers are always on the prowl to steal and brag, and many people just do not care about the technical know-how required to keep digital assets safe. Evolution of Money VII: "Banks vs Crypto" Cryptocurrencies are the new hope of money – the currency that may finally liberate humanity from the tight grip of banks and the families that control them. In the last series of the evolution of money VII, we explore banking. With their desires vs. the free will of man's desires. There are, however, a number of concerns that must be addressed regarding cryptocurrency, as it is still far from being the perfect money to replace USD-backed paper and plastic money. This article will attempt to unravel cryptocurrency, particularly Bitcoin, so you can decide whether it is the currency of the future. Evolution of Money VII: A world without money Thus, before the arrival of the Spaniard Conquistadores, the people of the Inca Empire, the largest in pre-Columbian America, did not have a real concept of money. The evolution of money VII. Their expansive political and administrative structure, then considered the most sophisticated in the New World, was powered by labor money. While the empire was rich in gold, had mountains of silver, harvested large quantities of coca and other foodstuffs, and produced the finest textiles and buildings, it had no marketplaces. Instead of paying taxes in commodities, the subjects provided labor to the state. This was a world that functioned and thrived well without ‘real’ money. Picture a world without money. Is it possible to consider the modern world functioning as it does, or even differently, without money? If the bond traders of the 16th century were to appear in modern times, it would be impossible for them to wrap their heads around the concept of a commercial world that operates without gold, yet it does. As we usher in an age of cryptocurrency, and considering how unique this kind of money is, one cannot help but wonder, is it just another fad whose end we are too blinded by profits to see? Considering that the world cannot fall back on paper money, what happens if cryptocurrency does not work out as promised? What comes after cryptocurrency? Evolution of Money VII: Understanding the Crypto Craze Deception More than 82,000 digital asset projects that run on blockchain technology have been launched worldwide since Bitcoin, but about 92 percent of them have failed, according to the China Academy of Information and Communications Technology (CAICT). Since blockchain became a buzzword, an entire industry has arisen to exploit it, but each failed project has averaged just a year. Millions of investors and speculators have lost a lot of money in what is now dubbed the ‘Crypto Craze’, with effects far worse than the money lost: many people’s faith in cryptocurrency as a viable currency of the future has been seriously eroded. Evolution of Money VII and crypto failure? Pessimists are quick to point out this fact to back up their narrative that the future has no place for cryptocurrency. However, to understand why those cryptocurrencies failed, and why those that have survived this far may hold the key to the future of money, there are three facts you need to know: 1. There were just too many cryptocurrencies launched within a short time that saturated the market, and the fraudsters took advantage to compromise its integrity and get rich. There is only room for so many forms of money – crypto coins, smart contracts, and privacy coins – in the digital sphere. Besides, of the over 82,000 cryptocurrencies that saw the light of day, a good number were fraudulent. Those that were legitimate got lost in the fray, and, coupled with the founders’ limited technical know-how and the market's delicacy, they had little chance of succeeding. 2. Most cryptocurrencies, although launched and traded, never really got to grow far enough to be considered ‘money’. This means that although they had value, they lacked most of the other properties that would have qualified them as currency. They did not generate any revenue; they were not a commodity; they were too speculative; and, most importantly, they barely stored any value. The traditional money we use today is what it is because it is protected by the issuing country; these cryptocurrencies are launched and traded with no protection or backing of any kind. 3. Finally, there is the Cryptocurrency paradox. Since crypto is money, it should have value, a property that makes it useful in buying things. The irony is that most investors in the industry initially hopped on the crypto craze, not to use the currency to purchase things, but to hold it until it accrues value before selling. As a result, most cryptocurrencies were never used to make any meaningful purchases during their lifetime, and that spelled their demise. A currency that is not used to buy anything cannot be widely accepted and, as such, loses value due to limited use. Investors who bought into ICOs and hoarded their assets contributed to their own losses. Renowned economist Nouriel Roubini still believes that all cryptocurrencies, including Bitcoin, will lose value and cause significant suffering to the global economy, largely due to the cryptocurrency paradox. However, with more and more wallet owners using their cryptocurrencies to make and receive payments, there is no reason to fear that Bitcoin, Ether, or any other major cryptocurrency will fail due to minimal usage. Investors no longer need to be persuaded to actively use their assets, and most have them to store value rather than speculate that their value will increase in the near future. Evolution of Money VII: The centralization risk problem of crypto In Evolution of Money VII, we explore one reason Bitcoin took the world by storm. When it launched, it was because it was a decentralized kind of money – no single authority had absolute power over its production or circulation. That said, cryptocurrency is not the perfect currency – yet. Even Bitcoin, the most popular and oldest crypto, has its weaknesses, most of which non-believers never tire of reminding us. We covered the most notable of these concerns in the last article in this series. However, as cryptocurrency evolves, there have been emergent choke points in its lifecycle that risk undermining the decentralized nature of this currency, the only thing that promises to make it better than the money we use now. They are mining, distribution, and exchanges. The problem of centralized cryptocurrency mining The difficulty of mining cryptocurrency adjusts over time, based on the average time it takes to mine a specified number of blocks that form the blockchain. This means that it takes more hashing power to produce cryptocurrency coins, hence requiring more powerful mining computers. This explains why it was possible to mine several Bitcoin coins with a desktop CPU in a day a decade ago, which allowed anyone to mine it. Today, Bitcoin mining is only feasible when done on multiple dedicated ASIC equipment set up in a network called a mining farm. The biggest problem with Bitcoin mining today is that it is only decentralized among large mining farms that stand out, not only because of the huge investments they make in mining equipment, but also because of the massive amount of power they require. As a result, it is easier for authorities to identify and single them out if they want to. Given the history of tyrannical governments around the world, this could pose a serious problem for the future of Bitcoin and other cryptocurrencies should they be targeted by central authorities. There have been many attempts by governments around the world to stifle and eliminate miners, especially as cryptocurrency ecosystems grew and became more popular. The Russian government tried to register miners to regulate and tax them, and large-scale farms had been banned at some point in upstate New York. The Chinese government has been particularly successful in preventing cryptocurrencies from being used freely within its borders, and it wouldn’t be difficult for it to identify mining farms if it wanted to. Crypto distribution could have been better In this evolution of money series, our focus has been on the most controversial ways modern money grew into the core of modern financial systems. The entry of cryptocurrency, though phenomenal, has been undermined by the way it is distributed. Bitcoin promised to be this new kind of money produced by the masses, but it wasn’t long before those with the most modern money bought the most coins and are now the richest owners of this new money. The problem here is that even though cryptocurrency is decentralized money, it wasn’t long before it was being distributed through the same traditional channels as traditional money. The new economic ecosystem enabled by cryptocurrency could have been more successful if the coins had been distributed at the time of creation for verifiable events, just as virtual money is awarded in modern games. Since cryptocurrency is programmable money, the developers of Bitcoin and major cryptos should have factored in how the coins should be distributed to prevent a potential future problem in which new money may replace old money in every way, including who owns and controls it. Centralized exchanges There is currently a big emerging problem with cryptocurrency exchanges. Just the other day, Hong Kong-based KUCoin, one of the world’s top cryptocurrency exchanges, and other exchanges worldwide, including LATOKEN, were implicated in volume-boosting scams. These exchanges would pick out crypto assets with low trading volumes and threaten to delist them from their exchanges, essentially rendering them worthless and untradable unless they paid a certain amount to have their trading volume numbers manipulated to appear active. This is a typical banking behavior that we see being carried on from old money to new money. Exchanges have also been the targets of hackers, uninformed regulators, and overzealous lawmakers. Since they are the main point of interaction between different cryptocurrencies and between cryptocurrencies and the old financial systems, they are an easy target when individuals and organizations have a bone to pick with the new form of currency. The realization that the world needs these exchanges, just as it needed foreign exchanges in the old system, is raising concerns about the crypto industry's independence. To prevent crypto exchanges from becoming new kinds of banks that have ripped off people and manipulated the global financial system over the last 500 years, steps need to be taken to decentralize them. This may be the only solution to prevent them from evolving into the monsters cryptocurrency promised to liberate the world from. It will also go a long way in minimizing damages caused by hackers and central governments. Someone just has to figure out how. The stablecoins question There are many questions over what the future holds for cryptocurrency that only time will answer. The problem is that 9 out of every 10 cryptocurrencies that reached the ICO stage failed. In 2018, they may have shaken the world's faith in these digital assets, but they are not dead. Instead, newer kinds of crypto assets emerged to address the problem that led to the failure. One of the stablecoins. A stablecoin is a cryptocurrency whose value is stabilized by other non-digital assets, such as traditional money. As we pointed out earlier, one of the main reasons many cryptocurrencies failed was that they barely stored any value – their prices fluctuated so wildly that they were not practical for buying and selling. However, when the value of a coin is pegged to something else, such as traditional money, holders of these assets would be assured of the cryptocurrency's value tomorrow or next year. Many stablecoins have been launched in the recent past. Some have been successful and are in circulation, while many others have failed. The specific mechanics behind each of them vary, just as the reasons for their success or failure. The question of whether stablecoins are the answer to the value-fluctuation problem in cryptocurrencies can only be answered over time. The future of centralized cryptos Some ‘experts’ have predicted that, eventually, the most successful cryptos will be those issued and controlled by central authorities, especially governments. Cryptocurrency is not built on real-world economics, which makes it very unique. Some argue that their slow adoption problems, and the resistance of some governments that see them as a threat to their grip on power, would be best solved by centralized cryptos. The Petro, issued by the Venezuelan government, is a good example of a centralized stablecoin, whose value is backed by oil. There are, however, important considerations that would bar these centralized cryptos from ever seeing a bright future, top among them being that the value of any money, regardless of who mines or issues it, is ultimately determined by how much the market is willing to pay for it. Therefore, the money market is essentially a zero-sum game in which an asset is traded on the expectation of its potential value rather than its actual value. As the world tries to move away from centralization of the economy, centralized cryptos are at a great disadvantage because they are just like traditional government-issued money – except that they are digital. Is cryptocurrency a freedom fallacy? When it was still a very young currency, Bitcoin survived its darkest test in 2011, when it was mostly associated with the black-market Silk Road and all the evil it traded. Since then, it has worked its way up people’s hearts and won their trust, but every time it has proven short-lived or disappointing. It has also proven just how easily human elements can upset a volatile market, and how quickly ordinary people lose money when a crash or a hack occurs. In 2018 alone, the Bitcoin price dropped by 50% from its record high of $20,000 to $10,000 over 3 months! Many optimists who made massive investments in the hope of getting quick returns lost a lot of money. But those were not even the largest investment losses in Bitcoin's history. In February 2014, hackers stole 850,000 Bitcoins when they hacked the Japan-based crypto exchange Mt. Gox, contributing to a 93% plummet in Bitcoin's value from $29 to $2.Reddit Bitcoin value also crashed from its peak by 73% in April 2013 and again by almost 85% in December, all revealing how the get-rich mindset affects so many investment decisions. The rise and fall of Bitcoin in each of these has been influenced by human behavior. Bitcoin Futures Innovation around Blockchain, the base technology on which cryptocurrency exists, has been tremendous so far. It has proved its potential to revolutionize every industry. It is proving difficult to become an obvious alternative to cash and gold, but new developments aim to circumvent the minor requirement of having actual Bitcoins before entering into buying or selling contracts. Bakkt, a company founded to ‘enable you to buy, sell, store and spend digital assets simply, safely and efficiently’, is expected to introduce Bitcoin Futures whose value is backed by real physical bitcoin (really expected). Others, such as CME and CBOE, have already launched futures and have active participants, with futures that are settled in cash (perfect for manipulators, though). The introduction of a derivative to such a market is highly indicative of the market's progression and maturity. As cryptocurrency continues to evolve, perhaps futures, taking the same evolutionary path as the gold ounce futures of the old money, may be the next way to own and transfer assets in contracts. With Bakkt’s expected physical delivery, the purchasing party will not have to buy, sell, or store Bitcoin in a wallet to transact on the exchange. Just like derivatives of the 2008 crash, Bitcoin Futures offer the potential to make money during a downtrend. They have also been widely compared to the schemes banks use to create money out of thin air, which we already discussed. Bakkt's role in bitcoin regulation is pivotal as it helps shape a clearer framework for institutional investment in cryptocurrencies. By establishing standards and practices for trading, Bakkt is paving the way for increased acceptance and a more stable market. This, in turn, could encourage more traditional financial entities to engage with digital currencies, further legitimizing bitcoin and its ecosystem. There is a remedy, though. In the same way that you cannot buy physical gold, buying Bitcoin futures is a new approach to trading Bitcoin without actually owning it. However, do not forget that it may affect Bitcoin's price. Perhaps in the future, Bitcoin Futures will be settled in real, physical Bitcoin, to give it more legitimacy and win the consideration of more people over cash. Evolution of Money VII: What next? The optimists argue that the future of money lies in cryptocurrency, or whatever comes after it. One thing you can be sure of is that, unless modern civilization or the internet collapses, there is no way the world is discarding the new money for the old; evolution never starts from scratch. Many articles and opinion pieces have been published online speculating about when governments around the world will finally ditch USD-backed money for crypto, with some estimating 2030 as the magic year and others reckoning 2050 will be the do-or-die year. However, there are rumors (at times backed by confiscations and leaks) that the same Governments, banks, and some very shady rich individuals have been secretly buying up all the Bitcoins since 2017 – perhaps to attempt a 51% attack on a massive scale, or just to manipulate the market in the future. Just as the Industrial Revolution created the modern economies we have today, the Bitcoin revolution will set people free from the banks that have held them captive for decades. That will not come on a silver plate; the human race needs to first accept and trust BTC and other coins for that to happen. This will only happen when people realize they do not need banks and that power lies in our hands. In 2017 and 2018, people were learning about and exploring the potential of crypto. In 2019, the general public will slowly begin to accept crypto as part of their way of life. It is apparent, however, that the biggest weakness of Crypto lies not in the money itself or its properties but in the force that lies within the human race, a natural drive of ignorance and apathy that is so difficult to overcome, poses such a grave danger to the current revolution of money yet. Perhaps cryptocurrencies (especially Bitcoin), a new kind of product that is ‘more agreeable’ to human nature, offer a ray of hope that humans will recognize and embrace the new currency with greater enthusiasm, and even use it to break free from the enslavement of banks while we still can. We can already see some governments and institutions jumping in; however, the dam will only burst when the whole human race finally realizes the potential decentralization offers and is smart enough not to give away their power to corporations, pseudo-governments, or powerful individuals.

Tag: Force in Dormancy

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Tag: Force in Dormancy

The Evolution of Money VII “The Force in Dormancy”

DON’T MISS A CRYPTO THING

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IMPORTANT