For the first time in the history of Cuba, the U.S. Dollar (USD) has lost value to another currency, living entirely on the internet without an army to back it, Bitcoin. The cryptocurrency has been trading at a premium against the United States currency in cash.

Related Reading | Turkish Lira Crashes: Bitcoin Freedom Vs. Fiat Currency Monopoly

As reported by Alex Gladstein, Chief Strategy Officer for the Human Rights Foundation, and Enrique Yecier, a Cuban citizen, via their Twitter accounts, the historic shift in currencies values extend to the main cryptocurrencies, Bitcoin, Ethereum, and stablecoin Tether, a digital currency pegged to the U.S. Dollar.

Due to the political tensions between the U.S. and Cuba, the island has been cut off from the international financial system and its payment rails. At the same time, the North American country has seen one of the biggest migrations from Cuban citizens.

This has created a situation where a lot of Cubans rely on remittances sent by their families abroad, but the national methods to receive or send a U.S. dollar transaction always affect the citizen. Therefore, crypto payments with Bitcoin and other coins, without the intervention of a third party, and more efficient in terms of fees and time.

In addition, Cubans use digital assets to protect themselves against inflation and the depreciation of their national currency. As a result, according to local reports, businesses and merchants have begun accepting Bitcoin and other cryptocurrencies as payment methods.

The Cuban citizen that made the viral report on the value of Bitcoin surpassing the U.S. dollar on the island, Enrique Yecier, claimed the following on this historical phenomenon:

Complaining that in Cuba a dollar in crypto has surpassed the value of 1 dollar in cash, is like complaining that Bitcoin today costs more than 46 thousand dollars when a year ago it cost 23 thousand. If there is someone doing things wrong, it is not BTC.

Cuba seems to be slowly, but surely moving into greater Bitcoin and crypto adoption. Per an AFP report, the national government granted merchants a license to operate with these digital assets back in August.

The measures fall into regulation 215, the report claims, issued by the Central Bank of Cuba. The new rules have been validated since September 15th and are aimed to regulate the use of cryptocurrencies for commercial transactions.

The country is still far from occupying a relevant spot in terms of adoption, as noted by Chainalysis in its 2021 report. The top ten countries with the most Bitcoin and crypto adoption have one thing in common, most are facing a high inflationary economy or a military conflict, as demonstrated by the inclusion of Argentina, Ukraine, Venezuela, Afghanistan, and others.

According to Yecer, Bitcoin its not the most valuable digital asset on the tropical island. This position goes to TRX (around $0,081162) which can go for as much as 8 CUP per token when a fair price should be around 6.15 CUP, the Cuban citizen said. Apparently, a lot of Cubans begin their crypto journey on the TRON ecosystem, thus the premium.

Related Reading | Bitcoin Bearish Signal: Hashrate Drops Over 20% In Last 24 Hours

As of press time, Bitcoin (BTC) trades at $46,797 with sideways movement in the past 24 hours.

Read the rest here:
How Bitcoin Became More Valuable Than The US Dollar In Cuba - bitcoinist.com

Even with its otherworldly volatility,Bitcoin(CRYPTO: BTC) has been one of the best investments to own over the past several years. And in 2021, that theme continued, as the most valuablecryptocurrencyhas soared nearly 70%this year.

Risk-averse investors who avoid this burgeoning asset class might instead want to own actual businesses that give them the potential for outsized returns. In that case, look no further than The Joint Corp.(NASDAQ:JYNT). In fact, this nationwide franchisor of chiropractic clinics has even outperformed Bitcoin, up a remarkable 150% in 2021.

Does The Joint. Corp. stock look like anattractive opportunitytoday? Let's find out.

Image source: Getty Images.

As of Sept. 30, thebusinesshad666 total locations, of which 583 were franchised and 83 were corporate owned. What separates The Joint Corp. from traditional chiropractors is that the former only provides basic back adjustments. Sessions require no appointments and take just a few minutes to complete. There's no expensive equipment, and because patients don't need insurance, there's also no need for administrative staff.

While revenue won't soar going forward like it has historically (systemwide sales skyrocketed 70%annually from 2010 through 2020), investors can still expect serious gains as thecompany continues to gain scale. Thegross marginis just shy of 90%, as operating a capital-light franchise model is extremely lucrative.

There are some clear positive indicators that bode well for The Joint Corp.'s long-term prospects. Google Trendsdatashows that searches for "chiropractor near me" have trended higher over the past five years. Additionally, a 2020 Centers for Disease Control and Prevention study revealed that 25%of U.S. adults had back pain within the prior three months.

As the country's vaccination rate ticks up and people feel comfortable seeing a chiropractor for their back pain, The Joint Corp. will be there to treat them. Not only does the chiropractic care market generate $18 billionin annual revenue, but 50%of Americans don't even know what the word "chiropractic" even means. Powerful momentum, supported by what I believe is the general public'srising interest in health and wellness, will propel thisbusinessin the coming year andbeyond.

By 2023, management expects to have 1,000 clinics open. And they see the potential for 1,800 locations in the U.S. one day. This means the company's profitability, which has been accelerating in recent years, could be multitudes higher in the not-too-distant future. That's a key ingredient when it comes to achieving market-crushing returns.

Since reporting third-quarter financial results on Nov. 4, the stock has fallen nearly 32% (as of Dec. 15). TheRussell 2000, asmall-cap index, is down just 9%during the same time period. Although The Joint Corp. posted a year-over-year revenue increase of 36% for Q3, it was down meaningfully from the 61% jump in the prior quarter. I think this sequential deceleration spooked investors.

And uncertainty regarding the ongoing pandemic and the omicron variant, mixed with the often-discussed topics of inflation and the Fed's next move, result in high-growth names getting unusually hammered. The Joint Corp. is not immune to the market's latest whims.

Will The Joint Corp. outperform Bitcoin again in 2022? Your guess is as good as mine. But I think investors would be smart to take advantage of the recent price decline and consider buying shares in this fast-growing business. I know I will be.

This article represents the opinion of the writer, who may disagree with the official recommendation position of a Motley Fool premium advisory service. Were motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Excerpt from:
This Under-the-Radar Stock Outpaced Bitcoin in 2021 -- Is It a Smart Buy Right Now? - Motley Fool

I'm having a hard time, living the good life, well I know I was losing time High Time - Grateful Dead

I had a long drive ahead of me. Nine hours down the coast, with a few stretches of time I knew I'd be out of streaming service range, and perhaps even out of AM/FM. Knowing this, I took a moment and dropped by my local Goodwill to take a gander at their CD collection before making my way. Lo and behold, I found a 3-CD boxed set of a Grateful Dead show from the 70s I had loved as a teenager, and figured that was the best bang for my couple of bucks: nearly three hours of guitars, feedback, percussive clomping and pitchy-sometimes-but-earnest-at-all-times singing. I bet the overlap of Bitcoiners and Dead Heads is slim, and I am not nearly as evangelical about the Dead's underlying fundamentals, but alas, as I drove further into the cosmic slop, a parallel between the two movements formed. As the hours flew by, I couldn't help but think how Bitcoin not only will bring about a global and free energy market, but with it, the re-commodification of time.

There's a lot of talk about time in the Bitcoin space, and for good reason. A fundamental mechanic of the solution to the Byzantine Generals problem is the immutability of the timestamp that orders all Bitcoin transactions. Without this component, the capped supply issuance that ensures digital scarcity would be meaningless; it doesn't matter how little bitcoin exists if one can just double-spend the same UTXO at a whim.

Proof-of-work creates immutable, decentralized truth by necessitating not just energy, but also the time spent searching for nonces for output hashes with enough leading zeroes to bring the next block header below the current difficulty target. Bitcoin does a brilliant job of utilizing the standardized local clock of a processor on the network to find an average of time spent (600 seconds target per block) across the whole network without relying on a centralized clock source to validate transaction orders. People like to scoff at Bitcoin transactions being inefficient, or slow, without realizing the implications of a global, digitally scarce, permission-less bearer asset with immutable, final settlement in under 30 minutes. The blockchain is simply a database of transactional signatures crystalized in impunity via a continuous hash string of blockheaders hashed with candidate block transactions in order to find the next blockheader. By stacking the previous blocks output hash on top of a universal forgetful function to find the next nonce, the serpentine chain of ledger becomes ever immutable; as every block stacks alongside the upward difficulty adjustment continuing its decade ascent, it becomes harder, and importantly, more wasteful for a bad faith actor to try and reorganize spends.

The act of spending electrical energy is not enough to find value in the digital space, it must be applied directly to spending time effectively, accurately computing within the consensus and thus securing the Bitcoin blockchain.

The Grateful Dead weren't always known by that name, and in fact, they got their first public audiences performing under the name The Warlocks. Unbeknownst to each other at the time, they shared that name with a young, upstart art band out of New York City. When the slow and lossy communications reached their respective coast via the new, blossoming independent music scene, they both decided to change their name. The Dead went on to see fairly imminent success throughout the following decades, whilst their counterparts changed their name to The Velvet Underground and enjoyed somewhat critical but overall muted popularity until a resurgence of their canon in the late 70s. Neither one of them wanted to spend the time to make a claim to their brand, and thus both moved on without so much any litigation or litigators. The Dead did a lot of things that are unheard of today in the hyper-commodification era of art, but perhaps none more important than allowing technologicly-savvy fans to bring their own recording equipment into their venues and tape the improvisation-heavy performances for their own, non-commercial use. A devoted taping community grew out of this allowance, and an entirely new way for hungry fans to engage with the product gave rise to a peer-to-peer market of tapes of shows highlighted for a spattering of personal reasons; someone's one-hundredth show, a birthday, New Year's Eve, debut of new material, a particularly good version of a beloved song, etc. Over time, this strictly-non-commercially-incentivized community drove each other to higher heights of recording quality, with new masters, new techniques, better microphones and better gear led to a powerful, decentralized taper community ready to offer their celluloid of choice for yours in a free market of experiences.

The particular boxed set I bought is from a series called Dick's Picks, named after the long time soundboard engineer of the band who utilized the data harvested from decades of trade and discussion amongst diehards to find the overwhelming favored shows of interest and, pulling from the archives of recordings directly from the band's own board, released commercial products of high quality directly targeted at the fans who made those shows famous in the first place by taping and trading their experience. I was a couple hours into my drive, stopping to feel the pain of filling my car with gas, when I decided to humor myself and see what these things sell for; it seemed kind of strange, knowing that nearly every show the band has ever played at this point has been recorded, located, and tagged online, legally, and for free, that these box sets could ever retain their value, furthermore proved by the fact I had found one for only a few dollars.

Imagine my initial confusion when I found that not only did they retain their value, the three discs were listed on eBay anywhere from $65-$150, appreciating at least three times in value since the February 1996 release. So not only did they compete with the slightly lower quality but freely distributed tapes, but by printing a limited run, they created supply less than ultimate demand. Had the person that donated this set to Goodwill taken the time to see its value on the open market, they might have made a different decision. Had an employee of Goodwill taken the time to search reseller markets, they might have priced the set with a higher premium.

The point isn't about whether these discs kept pace with gold from 1996 to 2021, but how they leveraged an open market of experiences to be commodified without innate commercial intent. The band put their advertising and commercial outreach into the hands of those that understood the product the best, resulting in deeper bond between the perceived value of the experience through the network of audience and the value of a high-fidelity commodity for re-experience. Certain nights, the group consciousness of a tuned-in-but-definitely-dropped-out masses, on the stage and off, came together in just the right way; those were the nights you wanted to play in your van on your four-and-a-half hour drive to the next night's show.

A whole community of trading tapes grew alongside the formidable touring empire of the band's now ubiquitous pop-culture presence. They always sold plenty of tickets, plenty of albums, plenty of t-shirts, and whatever loss of property they seemingly endured by allowing their fans this freedom was more than made up in other revenue streams. But beyond the obvious free marketing, production, and distribution, the band got something far more meaningful; they got a large following of humans to experience their lives listening to the recordings of the group. I don't care to convince you on their merits, that is not the point here, but I think anyone should agree there is simply something different about the way fans of this group behave in a lifestyle manner. This open network, completely symbiotic to the band's own commercial success, allowed a mutually perceived experience to be commodified and thus socially valued. The audience grew itself, and soon enough the market demanded less tape hiss and the more balanced highs of the eventually-released official discs.

One of the reasons those that did could even afford to drop out of the working class to abscond upon the concrete ribbons was sounder money. In fact, this particular night I happened on was recorded in winter 1970, before Nixon even took us off the gold standard. It took a minimum-wage worker less than a shift to afford the $4 ticket, and gas had not yet begun its rise from half a dollar in 1972 to a $1.35 in 1981. It didn't take a lot of time to earn enough for a three-show run, and hundreds of fans modeled lifestyle-supporting revenue streams around the nomadic culture; large craft bazaars would pop up in the parking lots with kitchens, arts and of course tape exchanges for those that missed a show to get up to date.

For many, the Grateful Dead were more than just a hobby, it was their life and livelihood. The lifestyle required such minimal overhead and the dollar was strong enough that the momentum of the summer of love spilled out into the hopeful halls and amphitheaters across the nation. The purchasing power of your time spent in labor was strong against the cheap price of goods and services; your time was worth something. As we find ourselves in an inflating goods and service market (in part) due to an expanding monetary supply, we find our time being devalued below our ability to keep the pace with rising prices. We work more and more and get less and less for it. This is a problem that can be solved (in part) with a technological upgrade to our monetary network. By imbuing our time laboring into a disinflationary and decentralized economic protocol, instead of fighting a compounding, hopeless struggle against the leaking entropy from an inflating dollar system, humans can spend more time making beautiful things for themselves and others. Bitcoin's dollar-denominated purchasing power does not rely on the dollar inflating more than the 2% target per year since the third halving algorithmically brought the relative-to-total supply issuance below 1.8%. Imagine a free, global market represented with a deflationary supply backed by geographically-independent, universally permissionless energy sources spending their time carving a hash string of blocks to communicate immutable transactional history through a network of peer-to-peer participants. There are very, very few use cases for a blockchain that would not be better served with a faster, more centralized database, but the historic ledger of volatility between human energy and capital is certainly at a level of demanding such necessity.

The history of humanity deserves a decentralized, open and yet immutable level of trust. Proof-of-work is not just the answer to the Byzantine Generals problem, it is also the first empirically sound answer to communally experienced time, and with it brings the assurance and ability for users to trust the commodity of time that is Bitcoin in the future. Bitcoin does change time preference in a literal time mechanism, for proof-of-work is a proof of history of spent computational power. It is a clock, just not a predictive clock. Mostly rubbish for planning future events, but in actuality it is an immutably true and decentralized standard of history and time; a decentralized time stamp server in order to solve the digital double-spend problem. Every payment a Bitcoin user receives of this digitally scarce bearer asset gets more purchasing power over time, and thus your economic incentive is to conserve your satoshis to maximize economic yield.

In these use cases, you can see the time preference variable changing directly alongside the economic incentive of the protocol. But when did this new standard of history go from being simply a shared database amongst cypherpunks to the immutable ledger of truth we all know today? I would argue it happened just before December 2012, as the nodes enforced the first halving upon the miners, just a few weeks before the astrological calendar of the Mayans ended. The implications that a new standard of time could have on human experience are vast. The path of a group society was incredibly modified with the mechanisms and technological advancements that allowed us to have a group consensus on months, days, hours, minutes and others. Through so-called quantum experiments such as the double-slit experiment, humans have in fact been able to see the modulation of wave forms of propelled atoms depending on the standard of time selected in the data harvesting. Perhaps we could recreate the experiment by taking snapshots each time a block is mined to look for demonstrative effects of a new standard of passing time in the observable universe. But regardless of what unknown implications of empirical, decentralized truth may come in the physics world, the way humans interact with time on a Bitcoin standard is quite different than how we used to on a fiat standard. You could make enough for a Dead ticket, the gas to get there, and a place to stay in a day of minimum wage work in 1970. This allowed more resources to be spent on capturing the shows in higher fidelity, and an abundance of human time to create a prolific culture around the group. The open-source community around Bitcoin makes it better, stronger and more available to serve more humans, but this social construct would not have coalesced around the protocol without the deflationary effects of the commodification of time via Bitcoin. You can save yourself a lot of time by using Bitcoin to save yourself a lot of time.

This is a guest post by Mark Goodwin. Opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.

Go here to see the original:
Bitcoin And The Commodity Of Time - Bitcoin Magazine

Ethereum Classic (CRYPTO: ETC) gave the bulls a gift this week and held above a key level at the $32 mark and began to trade sideways, just as Benzinga wrote may happen on Monday.

A sell-off in the general markets on Thursday and Friday morning leading into Fridays monthly options expiry spilled over into the cryptocurrency market andby Friday afternoon, the SPDR S&P 500. ETF Trust(NYSE:SPY) was bouncing up slightly off the open and pulling the crypto sector up with it.

Ethereum Classic has been trading more in tandem with Bitcoin (CRYPTO: BTC) than Ethereum (CRYPTO: ETH) recently, in a consistent downtrend off the November highs. That may be set to changebecause Ethereum Classic not only held above the key level, but on Friday printed a bullish pattern on the daily chart.

See Also:How to Buy Ethereum Classic

The Ethereum Classic Chart: Ethereum Classics downtrend dragged the crypto down almost 50% from the Nov. 9 high of $65.33 to a low of $33.31 on Wednesday. The crypto then bounced up slightly from the level but on Friday retested it as support.

The retest of the support level and subsequent bounce up has caused the crypto to print a bullish double bottom pattern at the level. If the pattern is recognized, Ethereum Classic could be in for a bullish weekend ahead. It is worth noting that Bitcoin also printed a double bottom pattern near the $45,500 level on Friday.

By Friday afternoon, Ethereum Classic was working to print a bullish hammer candlestick on the daily chart, which can often signal a reversal to the upside is in the cards. If Ethereum Classic is able to trade up above the most recent lower high the $36.82 level that was printed on Thursday it will negate the downtrend and could set the crypto into a new uptrend.

Ethereum Classics relative strength index (RSI) has been hovering near or below the 30% level since Dec. 4. When a stock or cryptos RSI reaches orexceeds the level, it becomes oversold, which can be a buy signal for technical traders.

To make a meaningful move to the upside over the coming days, Ethereum Classic will need to see increasing bullish volume. On Friday, the cryptos lower-than-average volume signaled continued consolidation at about 63,540 compared to the average 10-day volume of 147,257.

Ethereum Classic is trading below the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending below the 21-day, both of which are bearish indicators. The crypto is also trading below the 50-day simple moving average, which indicates longer-term sentiment is bearish.

Want direct analysis? Find me in the BZ Pro lounge! Click here for a free trial.

Image: ETC Public Domain via Flickr

Read the original post:
Ethereum Classic Continues To Follow Bitcoin, Holds Above This Key Level: Is A Bullish Weekend Ahead? - B - Benzinga

Bitcoin's origin, early growth, and evolution

Bitcoin is based on the ideas laid out in a 2008 whitepaper titled Bitcoin: A Peer-to-Peer Electronic Cash System.

The paper detailed methods for "allowing any two willing parties to transact directly with each other without the need for a trusted third party." The technologies deployed solved the 'double spend' problem, enabling scarcity in the digital environment for the first time.

The listed author of the paper is Satoshi Nakamoto, a presumed pseudonym for a person or group whose true identity remains a mystery. Nakamoto released the first open-source Bitcoin software client on January 9th, 2009, and anyone who installed the client could begin using Bitcoin.

Initial growth of the Bitcoin network was driven primarily by its utility as a novel method for transacting value in the digital world. Early proponents were, by and large, 'cypherpunks' - individuals who advocated the use of strong cryptography and privacy-enhancing technologies as a route to social and political change. However, speculation as to the future value of Bitcoin soon became a significant driver of adoption.

The price of bitcoin and the number of Bitcoin users rose in waves over the following decade. As regulators in major economies provided clarity on the legality of Bitcoin and other cryptocurrencies, a large number of Bitcoin exchanges established banking connections, making it easy to convert local currency to and from bitcoin. Other businesses established robust custodial services, making it easier for institutional investors to gain exposure to the asset as a growing number of high-profile investors signaled their interest.

At its most basic level, Bitcoin is useful for transacting value outside of the traditional financial system. People use Bitcoin to, for example, make international payments that are settled faster, more securely, and at lower transactional fees than through legacy settlement methods such as the SWIFT or ACH networks.

In the early years, when network adoption was sparse, Bitcoin could be used to settle even small-value transactions, and do so competitively with payment networks like Visa and Mastercard (which, in fact, settle transactions long after point of sale). However, as Bitcoin became more widely used, scaling issues made it less competitive as a medium of exchange for small-value items. In short, it became prohibitively expensive to settle small-value transactions due to limited throughput on the ledger and the lack of availability of second-layer solutions. This supported the narrative that Bitcoin's primary value is less as a payment network and more as an alternative to gold, or 'digital gold.' Here, the argument is that Bitcoin derives value from a combination of the technological breakthroughs it integrates, its capped supply with 'built-into-the-code' monetary policy, and its powerful network effects. In this regard, the investment thesis is that Bitcoin could replace gold and potentially become a form of 'pristine collateral' for the global economy.

Another popular narrative is that Bitcoin supports economic freedom. It is said to do this by providing, on an opt-in basis, an alternative form of money that integrates strong protection against (1) monetary confiscation, (2) censorship, and (3) devaluation through uncapped inflation. Note that this narrative is not mutually exclusive from the 'digital gold' narrative.

Read more: How does governance work in Bitcoin?

Read more: What is Bitcoin mining?

Bitcoin is not a static protocol. It can and has integrated changes throughout its lifetime, and it will continue to evolve. While there are a number of formalized procedures for upgrading Bitcoin (see "How does Bitcoin governance work?"), governance of the protocol is ultimately based on deliberation, persuasion, and volition. In other words, people decide what Bitcoin is.

In several instances, there have been significant disagreements amongst the community as to the direction that Bitcoin should take. When such disagreements cannot be resolved through deliberation and persuasion, a portion of users may - of their own volition - choose to acknowledge a different version of Bitcoin.

The alternative version of Bitcoin with the greatest number of adherents has come to be known as Bitcoin Cash (BCH). It arose out of a proposal aiming to solve scaling problems that had resulted in rising transaction costs and increasing transaction confirmation times. This version of Bitcoin began on August 1st, 2017.

Read more: What is Bitcoin Cash?

Read the original post:
What is Bitcoin? | How Do Bitcoin and Crypto Work? | Get ...

U.S. Senator Ted Cruz (R-TX) addresses a news conference on Capitol Hill in Washington, October 6, 2021.

Evelyn Hockstein | Reuters

AUSTIN, TEXAS The Texas power grid is struggling with fluctuating energy prices and sporadic service, but the state's growing bitcoin mining community believes it can help fix it.

Republican Sen. Ted Cruz agrees. "A lot of the discussion around bitcoin views bitcoin as a consumer of energy," said Cruz at an event in October. "The perspective I'm suggesting is very much the reverse, which is as a way to strengthen our energy infrastructure."

The grid is called ERCOT short for the Electric Reliability Council of Texas, which is the organization tasked with operating it and it's fussy and temperamental.

ERCOT powers about 90% of the state, but to run smoothly, it requires a perfect balance between supply and demand. Having too much power and not enough buyers is just as bad as everyone wanting to fire up their AC units on the same day in July.

Maintaining that balance has proven to be a real challenge this year, and Texans are feeling it.

The price of power per hour is all over the place, routinely going negative. Rolling blackouts at moments of peak power consumption no longer come as a surprise. A lot of people lost faith in the grid altogether after a winter storm earlier this year resulted in a multi-system meltdown that "was within minutes of a much more serious and potentially complete blackout."

Crypto enthusiasts believe the fix to this problem is actually to add another electricity consumer into the mix a buyer who will take as much power as they're given, whatever the time of day, and are just as willing to power down with a few seconds' notice. These flexible buyers are bitcoin miners.

Mining for cryptocurrencies is the computationally intensive process by which new tokens are created and transactions of existing digital coins are verified.

At the Texas Blockchain Summit in October, Cruz pointed to the ability of bitcoin miners to turn their rigs on or off within seconds a feature that is hugely beneficial during times when energy needs to be shifted back to the grid to meet demand.

"If you have a moment where you have a power shortage or a power crisis, whether it's a freeze or some other natural disaster where power generation capacity goes down, that creates the capacity to instantaneously shift that energy to put it back on the grid," Cruz said of the ability of bitcoin miners to shut down their operations within seconds.

But not all are convinced that bitcoin miners are the solution.

"Miners are a strain on the grid, not a help," said Ben Hertz-Shargel of Wood Mackenzie, a provider of commercial intelligence for the world's natural resources sector. Hertz-Shargel is concerned that bitcoin mining would only raise peak demand, ultimately adding stress to the system.

ERCOT has a heartbeat. That may sound like a romantic metaphor, but it actually gives off a hum like when a guitar isn't properly plugged into an amp.

It's the sound of 60 hertz, a frequency common to all grids in North America. A steady tone means there's as much electricity going onto the grid as there is coming off it. If the power supply surpasses customer demand, the beat speeds up. If customers use more power than what's available on the grid, the heartbeat slows down.

The grid can manage small gyrations to its heartbeat, according to Shaun Connell, the EVP of power at Lancium, a Houston-based energy tech company that specializes in bitcoin mining. But Connell tells CNBC that when ERCOT's grid pulse falls to 59.4 Hertz or below for more than nine minutes, machines start to protect themselves by automatically shutting off and disconnecting from the grid. In some cases, that might mean power plants going dark.

If the heartbeat falls even farther than that, it could trigger a "heart attack" scenario. Think grid-wide blackout and a hard restart of the whole system.

These fluctuations also correspond to the grid's volatile price swings. Connell tells CNBC that in 2020, the price of energy in West Texas was negative between 10% and 20% of the time. The price dips below zero when supply outpaces demand.

So far this year, the price of power per hour has been negatively priced 9% of the time, while 5% of all hours this year have peaked above $100.

Extreme tails like the ones shown in the chart below aren't a good thing.

Keeping a steady heartbeat is tough for ERCOT for a couple of reasons.

For one, the Texas grid functions as its own isolated and deregulated electrical island. Unlike the rest of the continental U.S., which belongs to either the Eastern or Western interconnection (the names of the two American power grids linking states), 90% of Texas runs on ERCOT. This means ERCOT cannot quickly turn to neighbors for help when large generators trip offline or renewables do not deliver as expected. This can prove especially problematic when there's a natural disaster, like the winter storm in early 2021.

ERCOT's market-driven approach to energy planning shows up in another feature and occasional shortcoming of the grid: Its "just-in-time" delivery model. At the best of times, this saves everybody money. No one needs to hoard backup fuel when Texas' elaborate underground maze of wells and pipes can deliver it on demand. But February laid bare the worst-case scenario, when the state's natural gas production (burning natural gas is a major source of electricity for the state) fell by almost half during the cold snap.

Third, Texas is flush with renewables and rapidly onboarding these inherently unstable sources of power to its grid. While this is helping to decarbonize ERCOT by replacing less environmentally friendly power sources like coal and natural gas with wind and solar, renewable energy is unpredictable. At any given hour, it could be breezy and sunny, or it could be cloudy with no wind, meaning the grid has to brace for all renewable energy to go offline at any point and have a backup power source on deck.

Finally, the state's biggest population centers are often far from where power is generated. For example, low-cost renewable energy sites stretch across West Texas, hours from major hubs like Dallas and Austin.

Or take the rural town of Rockdale. It was once home to the largest aluminum plant in the world, run by Alcoa. But starting in 2008, it began to shut down its operations. That energy capacity was going to waste, as it would've been prohibitively expensive to build the transmission capacity necessary to carry it to major population centers. The arrival of crypto miners helped to resolve that imbalance by consuming the surplus energy.

To ensure grid reliability at all times, demand must be even with supply. ERCOT operators can tinker with the supply side, spinning natural gas turbines up or down on short notice to make up for the volatility of renewables, but typically, grid operators aim to reduce customer demand to maintain balance.

Through established "demand response" programs, ERCOT will actually pay major industrial users to cut power. If that curtailment does not prove sufficient, the grid can also request that residential buyers conserve their power use voluntarily. And when all else fails, ERCOT can run rolling blackouts, shutting down different parts of the state in quick succession but with no one patch suffering an outage for an extended period of time.

The problem with that first and best option is that many of these arrangements between ERCOT and energy buyers require response times of ten to thirty minutes. But because ERCOT is going it alone, the grid requires a much faster reaction, sometimes in the range of sub-seconds, according to Lancium's Connell.

This is where bitcoin mining comes into play. Miners function as "interruptible load," meaning they are able to turn off all of their machines with a few seconds' notice when the grid is in a pinch and needs the extra power. Bitcoin has no uptime requirement, nor is the gear worn down by regularly powering off and on.

It also makes good economic sense for the miners. Miners commit to buying a certain amount of power,and either use it for mining if the grid doesn't need it, or sell it back at a profit if the grid demands it.

Transmission towers are shown on June 15, 2021 in Houston, Texas. The Electric Reliability Council of Texas (ERCOT), which controls approximately 90% of the power in Texas, has requested Texas residents to conserve power through Friday as temperatures surge in the state.

Brandon Bell | Getty Images

"Imagine how much you would have to pay Amazon to say, 'Hey, there's too much demand for power. Please power down your data center,'" said bitcoin mining engineer Brandon Arvanaghi, who now runs Meow, a company that enables corporate treasury participation in crypto markets.

"But it can do that with bitcoin very easily, because all you have to do is pay the miners slightly more than what they would have made mining for bitcoin that hour," continued Arvanaghi.

Even bitcoin miners that haven't cut a deal with ERCOT sometimes voluntarily power down at times of peak consumption when prices shoot higher.

Lancium is building bitcoin mines where wind and solar are abundant and the transmission system is constrained, meaning that power wants to flow down the line, but the lines are full.

As Lancium Chief Executive Officer Michael McNamara describes it, these sites act like a large power station but in reverse. The mines will absorb abundant renewable energy at times when supply outpaces demand, thereby monetizing these assets when there are no other buyers. And on the flip side, the mines will incrementally ramp down their energy intake, as demand on the grid rises.

In a sense, you can almost think of bitcoin miners as temporary buyers keeping these energy assets operational until the grid is able to fully absorb them.

"In times of scarcity, our data centers will go down, and those lines can carry the renewable energy to Houston, Dallas and Austin where they need the energy," said McNamara.

McNamara tells CNBC the net effect of this is retiring coal and gas faster, while rapidly adding wind and solar at the same time, essentially making bitcoin mining a fundamentally decarbonizing technology.

Bitcoin can also be used to unlock the state's sequestered deposits of natural gas.

For years, oil and gas companies have struggled with the problem of what to do when they accidentally hit a natural gas formation while drilling for oil. Whereas oil can easily be trucked out to a remote destination, gas delivery requires a pipeline.

If a drilling site is right next door to a pipeline, they chuck the gas in and take whatever cash the buyer on the other end is willing to pay that day. But if it's 20 miles from a pipeline, things start to get more complicated.

More often than not, the gas well won't be big enough to warrant the time and expense of building an entirely new pipeline. If a driller can't immediately find a way to sell the stash of natural gas, most look to dispose of it on site.

One method is to vent it, which releases methane directly into the air a poor choice for the environment, as its greenhouse effects are shown to be much stronger than carbon dioxide. A more environmentally friendly option is to flare it, which means actually lighting the gas on fire.

But flares are only 75% to 90% efficient, according to Adam Ortolf, who heads up business development in the U.S. for Upstream Data, a company that manufactures and supplies portable mining solutions for oil and gas facilities. "Even with a flare, some of the methane is being vented without being combusted," he said.

This is when on-site bitcoin mining can prove to be especially impactful.

Ortolf says that when the methane is run into an engine or generator, 100% of the methane is combusted and none of it leaks or vents into the air.

"But nobody will run it through a generator unless they can make money, because generators cost money to acquire and maintain," he said. "So unless it's economically sustainable, producers won't internally combust the gas."

Bitcoin makes it economically sustainable.

"50% of the natural gas in this country that is flared, is being flared in the Permian right now in West Texas. I think that is an enormous opportunity for bitcoin, because that's right now energy that is just being wasted," said Cruz in October.

Hertz-Shargel from Wood Mackenzie predicts that bitcoin could more than double demand growth in ERCOT's territory, but unlike Cruz, he doesn't think that additional demand is a good thing.

"The analogy I like to use is that if you start smoking two packs a day and then cut back to one pack on holidays, that doesn't make smoking good for your health," he says.

"The net impact is a very large addition of load onto the grid," agrees AdrianShelley, who runs the Texas branch of Public Citizen, a consumer advocacy and lobbying group. Shelley suspects that not all of that consumption is concentrated during times where there is a surplus of energy.

"I don't know that it would be the case that they would only use energy that there otherwise wasn't demand for," Shelley told CNBC.

Hertz-Shargel argues that ERCOT should be focused on grid improvements to make it easier to get power from solar and wind farms to big consumption centers, and that bitcoin miners aren't the right way to deal with demand fluctuations. Instead, he argues, "the intermittency of renewables should be met with demand response from societally-beneficial loads, like industrial facilities, commercial buildings, and residential air conditioners or energy storage."

But ERCOTinterim CEO Brad Jones thinks bitcoin miners can be helpful.

Jones has been touring the state and hosting public events to answer questions from Texans about the electric grid. Besides winter weather, the impact of cryptocurrency mining on the grid is a common question.

"I'm pro bitcoin...but I'm too risk averse to be an investor in bitcoin," Jones told a crowd of residents in Frisco, Texas on Wednesday night. The ERCOT chief went on to explain the mutually beneficial relationship between the grid and bitcoin miners.

"A lot of these solar and wind can produce power down to a negative power range, negative $23 per megawatt hour," Jones said. "These bitcoins see that as a great opportunity. They can get paid to use power. And that's why they're coming to the state. But that's not necessarily bad."

Jones makes the point that negative power isn't healthy for the market. Bitcoin miners "soak up" some of that negative power, and when the cost of electricity gets slightly higher than what they're willing to pay for it (around $100, according to Jones), they shut off.

"So I think it's really a valuable potential resource for us."

Continued here:
Bitcoin miners say they're helping to fix the broken Texas electric grid and Ted Cruz agrees - CNBC

We tend to think of the world as the past, present and future, and as these distinguished moments in time. However, we intuitively know that this is not the case. Instead, we are always in a state of flux, this slow progressive evolution in order to suit humanitys growing needs, knowledge and demands. However, with change comes adjustment, and what we are facing right now is an adjustment to the digital realm, the world of Bitcoin and our digital identity: a crossing of the chasm, a state of change away from the physical realm of traditional finance, legacy structures and the world as we know it. This article is meant to highlight some of these critical hurdles brought up by Raoul Pal and Robert Breedlove in an effort to get the collective consciousness thinking about how we can transition to this digital realm with minimal volatility and entropy.

One thing Raoul and Breedlove bring up many times throughout the talk is the metaverse. Therefore, lets first ensure we are on the same page when it comes to the metaverse. We often hear the metaverse is the future; however, what most deep down the rabbit hole may argue is that the metaverse has been blossoming into existence since the birth of the internet. However, we are only just starting to define it now. Lets go deeper ...

Most of us tend to interpret the metaverse as this digital environment where we hang out in a virtual world- the world Mark Zuckerberg is pushing with his Facebook ads, i.e., Meta. But, I would argue that the metaverse is not this virtual world that it is made out to be, but rather a digital interface to ones digital self. It is our digital identity where we interact with our online social community, manage our digital possessions and store our digital wealth, to name a few aspects which are currently easy to identify. With that being said, this osmosis into the metaverse is not a movement of people away from the physical world into the digital world, but rather a transfer of wealth and identity from the physical realm to the digital realm. Although many people already do and will continue to spend time in digital worlds in video games and social platforms, most of us will still very much be rooted in the physical world for the time being.

Building on this idea, what will happen to physical assets? An assets value is subjective and is worth something usually because it provides value to us in some way or another. At the moment, our physical assets offer greater perceived value than our digital assets. This explains the discrepancy between the value of physical versus digital assets globally, e.g., real estate is worth over $300 trillion while the complete cryptocurrency market cap sits at $2.5 trillion (recently as high as $3 trillion). The question now is, how does this value shift over into the metaverse? This, I believe, is a demographic shift. As our population ages, those in earlier generations with limited exposure to the digital realm (i.e., digital identity, digital assets or digital possessions), will slowly bequeath their wealth to their offspring, which will find greater value as technology evolves in the metaverse. However, it should be noted that you will find utility and value in different areas and offerings within the metaverse depending on your age, values, interests, gender and location. Some people may choose to stay primarily in the physical world if the metaverse doesnt seem to provide ample value to them. Others may dive in headfirst.

Where are we now? We are currently in a state of limbo, one toe in the digital plane and the rest of the body out. Most of us have exposure to the metaverse when it comes to our digital identity, but only a handful of us find greater value in digital assets over physical assets, although this is quickly changing. However, as we see greater adoption, we will also encounter greater hurdles (technological, political, financial etc.). Taking this into account, this shift towards the metaverse isnt something that will happen overnight. As previously mentioned, it is a generational demographic shift that has been underway since the invention of the internet. The transition from handwritten letters to email and social media was just the start. Now we should continue to see the transition of wealth, jobs, and identities to the digital plane.

When can we safely say the metaverse is our reality? Just like inflation impacts everyone differently, as it is dependent on your consumption habits, what you classify as the metaverse is unique to you. There are many ways to measure your presence in the metaverse, i.e., by time, wealth, reputation, interests, job, hobbies or knowledge. With that in mind, some people may argue that we are already in the metaverse due to the amount of time we spend engrossed in technology. On the other hand, others may say we havent reached that inflection point just yet, or that the metaverse will become our reality when:

- We spend more time connected to the digital realm than the physical realm - When digital wealth surpasses physical wealth

- When were able to vote for our politicians in this digital world

- When the majority of jobs are in the digital plane

- When we can digitally upload ones consciousness

...and some will say the metaverse will never become our reality.

My personal belief is that the metaverse is supplemental to our physical existence, and it is not one or the other. The metaverse eases our physical existence by dematerializing our limitations and constraints, such as distance, time, aging, wealth, connection, etc. However, there is and will continue to be an abundance of value in the physical world. But ultimately, this decision of whether we are or arent or what is versus what isnt the metaverse is not for me to decide. Ill pass that one onto you.

Opinions aside, although the definition of what constitutes the metaverse may be subjective, what's not so subjective is that we are and will continue to face hurdles as we see greater adoption.

Chart Source

Every new technology has to cross the chasm to reach mainstream adoption (the chasm is detailed in the image above). During this crossing of the chasm, we see creative destruction take hold, where legacy systems collapse and new technology changes the way we interact with theworld. All new technology has some form of disruption. Its just that some technology is more disruptive than others.

With the introduction of the digital camera, we witnessed the dismantling and disruption of the traditional film market. But from this, we saw the boon of photography and documentation. However, when it comes to cryptocurrencies, we have only just started to scratch the surface of what is possible. Here is an example of some of the sectors this new technology has the potential to disrupt:

- The financial system (banking, remittances, micropayments, credit markets, to name a few) - Social media and digital interaction

- The internet (our digital footprint)

- Voting

- Insurance

From everything mentioned so far, it should be evident that we are in the middle of a major global state change, a transfer of identity, wealth, possessions and interactions from the physical realm into the digital realm. As Raoul and Robert eloquently explain, with this state of change in place, we have to overcome some major hurdles. We need to ensure we are heading in the right direction collectively. Therefore, we should ask ourselves, how do we get there safely, without a consolidation of power or the crippling of our economy? These are a few key questions we have to figure out before conquering the chasm of adoption. Lets touch on a few key hurdles we have to face:

If an asset, such as bitcoin, is our primary currency and store of value and it is wildly outperforming the majority of other investment opportunities, then we will be disincentivized to transact and spend with it. Yes, there will be occasions here and there, but in general, the majority of the world we know will be starved of capital. This will push central banks to intervene and over-regulate in order to stop this capital flight from traditional assets to digital assets, but in doing so, itll only lock people into our failing system, delaying the inevitable and amplifying its negative effects down the line.

Eventually, if we can predominately move across into the digital realm, this problem of capital flight will be solved. At this point, bitcoin will reach market saturation, similar to gold today, where it protects purchasing power but is no longer an asymmetric bet on technology and a failure of the current system. But in the interim, how do we take advantage of bitcoins positive properties while also promoting the exchange of bitcoin between one another?

In the short term, if we were to see a seismic shift of capital away from traditional assets and into digital assets, this starvation of capital from traditional assets would create sizable losses. Suppose traditional assets start facing major losses, while at the same time, there is a lack of transacting in digital assets, creating a reduction in realized gains; then wed have a problem on our hands. We could see a significant decrease in capital gain revenue and an increase in capital losses, further eroding the tax base. This could push policymakers to implement overbearing regulation, resulting in measures such as taxation on unrealized gains. This would stifle the prosperity in the metaverse and limit the transition of individuals to the digital realm.

In the long term, if we embrace a currency such as bitcoin as a legal tender:

1. The government will no longer receive capital gains tax from any appreciation in the value of bitcoin. This would be in line with the fact that a countrys legal tender is not subject to taxation if/when it appreciates/depreciates.

2. We live in an inherently deflationary world, whereby technological advancement allows us to get more for less. Over time this advancement increases productivity and efficiency, causing the cost of goods, services and assets to decline slowly. However, this is only possible under a currency with a fixed money supply (such as bitcoin). The lack of monetary expansion causing dilution would allow the currency to capture these technological gains. This may sound positive; however over time, most assets may decline in price, resulting in increased capital losses, reducing tax revenue.

With that being said, one could argue that by adopting a currency such as bitcoin, the government will no longer be spending in a currency that loses purchasing power one day to the next. Therefore, all tax revenue will go further, making up for this reduction in tax revenue. If that is the case, then this may all come out in the wash. However, we should still be conscious of these potential taxation issues. With that in mind, how do we ensure that assets such as bitcoin are taxed appropriately, but as not to restrict their potential as a solution to our fragile system? And, how do we take into account an increase in capital losses?

We are in the middle of one of the biggest revolutions in human history, and alongside this revolution, we face an assortment of immense deflationary forces such as:

- Demographics (an aging population with limited purchasing power)

- Our major debt burden consuming productive capital

- Technologies such as artificial intelligence (AI) and robots consuming jobs

- Competition in the workforce due to overcrowding of what jobs remain

- Currency debasement, destroying our purchasing power

- Monetary intervention suppressing interest rates and traditional asset returns - Capital flight into the digital realm putting strain on the traditional system

As these forces become more pervasive, it becomes harder and harder for the lower- and middle-income segments of the population to survive. This is a big issue! The majority of the population is under immense pressure as they are being squeezed from all angles. How do we give them a voice, meet their needs and stop them from revolting?

One potential option Raoul proposes is embracing central bank digital currencies (CBDCs), allowing easier implementation of fiscal stimulus such as universal basic income (UBI). By doing so, we could redirect the flow of the capital away from asset owners and into the hands of the most at-risk individuals. This will aid in bridging the gap between the physical and the digital realm for the lower- and middle-wealth percentiles, allowing them to support themselves as these deflationary pressures take hold.

My worry with this view is that CBDCs have the potential to give governments globally immense power and control. If this power is used in the ways mentioned above, then I am all for it. However, if CBDCs are used with the interests of the few in mind, this will only further consolidate wealth and power and could potentially end this utopian decentralized vision of the metaverse. Therefore, is there a way to implement CBDCs but somehow define the boundaries for which they can be used, preventing misuse and the centralization of power?

However, regardless of which route we chose to bridge the chasm, Raoul does bring up a good point: if we are able to transition over to a decentralized metaverse and democratize this incredible technological boon in productivity and innovation, then we may be able to implement a natural form of UBI, where we could monetize our own digital identity. Although this is currently not possible, as our online corporations current structure is to capitalize off of our data by monetizing our every move, a decentralized metaverse shifts this power and revenue generation into the hands of the user.

As technology advances, we are and will continue to see robots and AI replacing our jobs. Additionally, as energy costs slowly trend to near zero, we should see the cost of living slowly decline. Adding in the fact that we are witnessing a giant demographic shift where people have fewer children due to the costly environment we live in, this should cause gross domestic product (GDP) per capita to skyrocket. This could mean we are about to face one of the most productive periods in human history.

However, with costs slowly working their way to near zero and jobs being replaced by technology, resulting in more time on our hands, will this considerable increase in productivity bring about:

1. A decentralized open-source world where we push for equality of opportunity and where technology is shared freely? If so, this could result in a renaissance period with a focus on culture, art, and science leading to immense prosperity, innovation, and growth;

Or,

2. A darker, more centralized productivity boon where the vast majority of the patents pertaining to this powerful technology that now governs our lives is under the control of a few key players? In this case, we would most likely see significant poverty and some of humanitys more challenging times ahead due to the centralization of power and wealth.

On top of all that, we are currently seeing major global exploitation of our digital identities. Not only are we seeing our online data being used in for-profit activities, but we are also seeing targeted media leading to psychological manipulation allowing these large monopolistic entities to sway the population.

Unfortunately, with everything mentioned above, the free market isnt going to solve these hurdles we face in the way we want. It is going to solve them with the total accumulation of wealth in the hands of the few. Therefore, what can we do to ensure this powerful technology of the future is in the hands of the people while also promoting the continuation of free markets?

With all that being said, how we approach these tough questions will define our future. Will crossing the chasm result in a:

a) Decentralized Metaverse? This would be a bright future where creative destruction is encouraged: Where there is a dispersion of power within a decentralized metaverse, brought about by rules and regulations that prevent the destruction and manipulation of the free markets, all while suppressing the overbearing powers of monopolies that asphyxiate competition. It should be noted that we may still have nation-state fiat currencies, but globally, wed embrace an immutable decentralized asset as our world reserve currency. This would lower the cost of living and democratize technology and finance, reducing wealth inequality. But more importantly, it would restrict the centralization of power with a technology that complements our deflationary world.

b) Centralized Metaverse? This would look similar to the current state of play, where a handful of large corporations have overwhelming control over our data and access to vast sums of capital, allowing them to lobby, protect their interests, and influence politics. In addition to the suppression of creative destruction, will we follow in Chinas footsteps and see the rise of CBDCs and social credit scores? This would give the government unfettered access to all our personal data, laying the foundation for the destruction of free markets and suppression of capital flows into any technology that poses a threat to the governments power.

Or will we walk the middle ground just like we have done many times throughout history, experiencing a give-and-take between centralization and decentralization?

We tend to think that when new technologies, such as Bitcoin and the metaverse appear, we all jump on board, and everything is hunky-dory. However, the reality is, if certain events had not happened the way they did, we might not have many of the innovations and advancements we see today. These technologies dont just appear. They are years in the making, a culmination of previous technological progress and human endeavours. They emerge from our experiences, needs and desires, and they are a byproduct of decisions we made ten, fifty, one hundred years ago. With this in mind, coming together as a collective, and understanding the unintended consequences of our choices will help guide us in making more efficient and productive decisions for the future.

The future is bright if we make it.

This is a guest post by Sebastian Bunney. Opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.

See the original post here:
Facing The Chasm: The Future Of Bitcoin And The Metaverse - Bitcoin Magazine

Bitcoin (BTC) is the granddaddy of cryptocurrencies. The original digital currency launched in 2009 and has already spawned over 15,000 crypto babies. It's by far the biggest coin by market cap and has grown a whopping 71,256,700% since it first traded.

According to CoinMarketCap data, Bitcoin has gained almost 100% so far this year. Many other cryptocurrencies have performed much better than that, but very few have consistently been able to generate strong returns year after year. This is why it is advisable to keep a proportion of your crypto portfolio in safer coins like Bitcoin.

It's fun to look at which cryptos have produced extraordinary returns this year, but we should also consider which ones might continue to produce results for long-term investors. Here are four cryptos that blew Bitcoin out of the water -- and may also be part of a long-term crypto landscape.

Who would have thought a game involving cute blobby cartoon characters would grow into a billion dollar enterprise with over 122,000 users? Axie Infinity did exactly that. The reason? It popularized a new type of gaming called play-to-earn which has changed the way people think about gaming.

Instead of gaining points that are only good for bragging rights in the real world as you might in a traditional game, Axie players earn AXS or SLP tokens that can be exchanged for real cash.

Non-fungible tokens (NFTs) are central to the growth of blockchain gaming. The ownership information is coded into the token, so it has value outside the game. For example, Axie Infinity players can use their Axie NFTs to breed, battle, and complete quests. Since each one is a unique player-owned NFT, it can also be sold in the marketplace.

Ethereum is the second biggest currency by market capitalization. There's regular speculation in crypto circles that it might eventually overtake Bitcoin, an event that's referred to as "the flippening." In spite of strong gains this year, with a market cap of around $540 billion, Ethereum has a long way to go before it reaches Bitcoin's $1 trillion.

Ethereum was the first cryptocurrency with smart contract capabilities. It's a programmable blockchain that can run other applications, making the Ethereum network the engine room that powers much of the decentralized finance system.

However, it has been a victim of its own success as the network is currently heavily congested and plagued with high transaction fees. It's in the process of an upgrade to Eth2, which -- assuming all goes well -- should help its performance. In the meantime, other cryptos have stepped up to the plate.

Solana is another of 2021's stand out cryptocurrencies. Its fast processing speed and low transaction costs have attracted investors and developers alike. Like Ethereum, it is a smart contract crypto. Unlike Ethereum, which processes 15-45 transactions per second (TPS), Solana can handle about 50,000 TPS. Right now there are over 500 projects running on Solana's ecosystem while Ethereum has almost 3,000.

Solana has made huge strides forward in the past year, but it remains to be seen how it will handle further increases in traffic and demand. Ethereum may have its problems, but it's been truly battle tested. In contrast, Solana's platform went down for 17 hours in September after it was overwhelmed by a flood of transactions.

Cardano is a top 10 cryptocurrency that's not only performed well this year, but could also continue to produce results longer term. It is a programmable blockchain that's taken a slow-and-steady approach to development. Each step is peer-reviewed before implementation, which has earned the project its share of both fans and critics.

One of Cardano's biggest strengths is its partnerships with various governments and organizations in Africa. For example, it has a partnership with the Ethiopian Ministry of Education to store students' academic records on the blockchain. Many blockchain applications are focused inward on other cryptos, so it's good to see these real world use cases.

A quick analysis of the top 100 coins by market cap shows that 79 of the top 100 coins outperformed Bitcoin in 2021. In fact, 30 of them produced returns of over 1,000%. Those eye-watering returns have tempted a lot of investors to open their first cryptocurrency exchange accounts.

The trouble is that it's not really a fair comparison. Bitcoin is a much safer and more established investment. Some see it as a form of digital gold or a store of value, which is a very different asset than, say, an online game like Axie Infinity.

People who buy less established cryptocurrencies may be successful in getting in on the ground floor (like early Bitcoin investors did) and making significant gains. But in doing so, they take on a lot more risk -- for every crypto that produces gains of over 1,000%, there are several more that failed altogether or posted significant losses.

As an investor, only you know your financial goals and overall strategy. But it is important to understand the risks involved and do your own research before jumping in. The four coins above are all good coins to have on your radar for the longer term. Just don't buy them hoping for another 23,000% gain.

Excerpt from:
4 Unstoppable Cryptos That Have Left Bitcoin in the Dust - Motley Fool

A recent paper authored by members of several universities, including Sydney and Macquarie, argues that recent changes in Ethereum monetary policy are making it a better store of value than bitcoin. The deflationary effect that the EIP-1559 proposal has caused in the issuance of the currency is said to be the main cause of this.

A new paper released by members of Australian universities last month is putting the spotlight on Ethereum and its possible future as a store of value. The paper, titled Better than Bitcoin? Can cryptocurrencies beat inflation?, is authored by Ester Flez-Vias of the University of Technology in Sydney and other academics, and compares the issuance of Bitcoin with the new issuance model of Ethereum, that is making the currency deflationary.

The paper states:

We show that following the recent change in its transactions protocol, the digital currency Ethereum displays a significantly lower net issuance rate of tokens than Bitcoin, achieved by destroying the feesassociated with each transaction.

This has to do with the activation of EIP-1559, a proposal that burns Ethereum in a proportional way to the usage of the network. While this proposal had some opposition when it was presented mainly from miners and mining pools it is now contributing to this new appreciation of Ethereum as a possibly deflationary currency in the future.

The implementation of EIP-1559 has caused the network to burn a significant amount of Ethereum in fees. This change has led to more than one million ETH being put out of circulation after just three months of its implementation on mainnet. Regarding this, the study remarks:

In many cases the amount of Ethereum burned outpaces the networks creation of new tokens, resulting in Ethereum potentially becoming the worlds first deflationary currency. We argue that this provides better inflationary hedging properties than Bitcoin, and Ether may therefore offer a superior long-term value storage than Bitcoin.

Other cryptocurrency projects are adopting similar burning schemes hoping to recreate the same effect. Binance coin recently activated an update to its network that also implemented fee burning. However, Binance coin and Ethereum are fundamentally different: The latter has no cap on its issuance, while Binance coin does have a hard issuance cap.

What do you think about the Better than Bitcoin? Can cryptocurrencies beat inflation? paper and its conclusions? Tell us in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Excerpt from:
Ethereum Might Dethrone Bitcoin as Best Crypto Store of Value, Study Argues Bitcoin News - Bitcoin News

Before debating whether to ban private cryptocurrenies, it is prudent first to understand what cryptocurrencies are

Virtual currencies created using blockchain technology have been the subject of great speculation and discussion in recent times.

Legendary investors Charlie Munger and Warren Buffet have gone as far as to call Bitcoin and other cryptocurrencies rat poison.

Before debating on whether to ban private cryptocurrency, it is prudent first to understand what cryptocurrencies are.

Cryptocurrencies are digital encrypted tokens that can be transferred between two parties without the need for a centralised regulator.

The facilitators of the transaction work to verify a transaction individually and maintain a public ledger open for anyone to see.

The elimination of a centralised entity is why we see the word decentralisation being thrown around very often. Cryptocurrencies are not untraceable as most believe; in fact, it happens to be more traceable than currency notes due to the public ledger leaving a clear trail.

In addition, when discussing the merits of cryptocurrencies, one must understand that it possesses no intrinsic value. Stocks provide partial ownership of a firm that produces goods and services, bonds provide a steady source of income, and gold has inherent metal value. Cryptocurrencies are non-productive assets that are merely traded because there is demand for it.

Ex-RBI Governor Raghuram Rajan had stated recently in a TV interview that a lot of cryptos have value only because there is a greater fool out there willing to buy.

Cryptocurrencies are eerily similar to the tulip mania of 1636, when tulips were being traded for the sake of turning a profit. Another essential point to note is that although theoretically there is a scarcity of Bitcoin and other cryptocurrencies, that does not mean anything in terms of economics because there needs to be a particular purpose that will sustain demand for the asset.

Some claim that Bitcoin and other private cryptocurrencies are a new revolution in currencies and the monetary system. No central bank or government around the world would be interested in relinquishing power over the money supply. Private cryptocurrencies being adopted as a legitimate currency in the nation will spell the end of regulation and economic intervention by the central bank. This is because central banks require the ability to manipulate the money supply to intervene during a crisis. Private cryptocurrencies strip the central bank of this power, leaving the central bank effectively unable to set interest rates and control the money supply efficiently. In a crisis such as the COVID-19 pandemic, it would become challenging for monetary regulators to step in and aid a wounded economy.

Therefore, it is improbable for any notable government to favour and encourage private cryptocurrencies for these reasons. Moreover, due to speculation, cryptocurrencies ensure that they can never act as a measure of the value of goods and services. For a cryptocurrency such as Bitcoin to be accepted as a currency, it has to price goods. Bitcoin, an extremely volatile cryptocurrency (like its counterparts), cannot act as a currency in a stable economy.

Although a particular country can choose to ban private cryptocurrencies, that this does not mean anything to the asset as a whole is untrue. The significant advantage which cryptocurrencies pose, which is decentralisation, leads to its downfall. Any government with large enough pockets can decide to take down the cryptocurrency by destroying its monetary value. The incentive for miners and other participants to maintain the system is financial.

If the price of a cryptocurrency such as Bitcoin were to drop to 0, it would be devastating. The act of a significant government announcing its intention to take down cryptocurrencies would leave a considerable dent in the price. Additionally, cryptocurrency mining takes up a substantial amount of a countrys resources which could be put to more productive uses.

It is crucial for governments worldwide to decide on a course of action regarding this growing technology and equip themselves accordingly.

The longer it takes for regulators to implement a plan, the greater there is to lose as the amount of money being channeled into the asset grows further. Unfortunately, all bubbles come to an abrupt end leaving many financially distraught.

Those who invest in cryptocurrencies need to understand that they are speculating rather than investing. It follows that while speculating, one takes comprehensive care to know what they are getting into. Therefore, it is vital that an individual does not stake their financial security upon this novel asset.

(Anand Srinivasan is a consultant and Sashwath Swaminathan is a research associate at Aionion Investment Services)

Read more:
Be aware of bitcoin, other cryptocurrencies - The Hindu