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Blockchains Unlock Institutions with Internet Scale

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From Promises Enforced by Law to Promises Enforced by Code

Blockchains are the first technology ever invented that gives software systems the ability — without trusted intermediaries — to make highly credible promises. These promises are enforced by a novel combination of technological innovations spanning peer-to-peer networking, encryption, and consensus mechanisms.

The first blockchain was created in 2009 by Satoshi Nakamoto as a solution to the long-standing problem of how to create a digital currency that operates outside of the control of banks and governments. This solution was named Bitcoin, and it successfully coordinated the establishment and maintenance of a new, independent system of money that is native to the internet. Bitcoin works and has grown magnificently because it makes several very important promises that are deemed highly credible by the individuals and businesses who use it.

The invention of blockchains represents a paradigm shift because the institutions that coordinate resources and activities in human society are fundamentally built on promises.

Take for instance the banking system, which we fund in exchange for promises to help us save and invest, operate businesses, and manage financial risks; or the legal system, which we fund in exchange for a promise to enforce a set of societally and economically beneficial rules; or the institution of the US Dollar, which we fund in exchange for promises to facilitate trade and maintain economic stability.

With blockchains, we can represent many of these promises in software. But why would we want to do that?

Today’s Institutions Will Not Scale for the Internet Age

The aforementioned institutions (along with many others) have pushed society forward immeasurably and have greatly improved our standard of living, but they have critical limitations that have only become clear over the last several decades — namely, in an increasingly global world, their promises don’t extend across borders, and too often those promises are broken altogether, in ways that irreversibly destroy trust and hinder progress.

This insight leads to the understanding that blockchains, by providing a means of making stronger promises, are an institutional innovation that has arrived at a most opportune time. They are a technology that enables us to architect new types of institutions that are purpose-built for a global, internet-connected society.

The World Needs Scalable Institutions

As we continue to transition from life driven by analog institutions and fragmented across national boundaries, to an internet-based, digital-first society, the need for globally scalable institutions has never been greater.

The internet sector made up over 10% of US GDP in 2018 and grew 9 times faster than the US economy as a whole from 2012 to 2018. It is likely that the GDP of the Internet will far surpass that of any individual nation-state within the next decade or two.

This underscores the potential gravity of the opportunity presented by blockchains: in a world defined by instant, global communication and global markets, what types of institutions will people use to coordinate resources and economic activities?

Bitcoin Exposed Latent Demand for New Institutions

The growth of Bitcoin and the ecosystem surrounding it serves as evidence that blockchain-based institutions have the potential to fill in the gaps left by our analog institutions and allow the internet economy to thrive. In its first 10 years of life, Bitcoin has facilitated over $2 trillion worth of money transfers and has spawned one of the most liquid, global marketplaces in the world.

On the back of its growth, some of the world’s fastest growing startups in history have flourished — the crypto brokerage Coinbase grew from 0 accounts to more than 30 million in 5 years, vastly outpacing the reach of traditional brokerages, and the crypto exchange Binance generated over $1 billion in cumulative profit less than 3 years after launching.

These are not merely vanity stats; the first use case of blockchain, internet-native money, offers tangible benefits that no other form of money has ever been able to offer. In particular, Bitcoin is the first form of money that is resistant to inflation, censorship, and involuntary seizure, and it is accessible to anyone in the world with an internet connection.

These properties make it attractive to a number of different parties:

1) to investors, as a form of digital gold;

2) to people that reside in countries with weak or restrictive monetary systems, as a means of participating in the global economy; and

3) to businesses that facilitate large amounts of cross-border trade, as a cheap and efficient means of settlement.

The use case for money alone has a total addressable market in the tens of trillions, and the growth of internet-native money will propel blockchain startups to a much greater scale than they have already achieved.

From Money to Other Institutions

Outside of money, a generation of entrepreneurs are asking what other blockchain-based institutions might be able to flourish in the internet age, and there are exciting early developments spanning the fields of financial services, identity, cloud computing, social networks, and more. In financial services, new institutions are being created to fundamentally rethink how lending, trading, investing, and insurance could be architected for the internet economy.

The promise of these institutions is to offer similar benefits to Bitcoin: highly secure, tamper-proof services that mitigate counterparty risk and are accessible to all people with an internet connection.

These new institutions are not replacements for our analog institutions. Rather, they augment their capabilities and extend the places that we are able to do business with the comfort that promises will be delivered on. Simply put, these developments have the potential to expand the size of the internet economy by orders of magnitude.

Where Are We Today?

Today we’re at a critical juncture in this technology’s arc of evolution. Only in the last several years has it become clear that Bitcoin has been a successful experiment, but the tools to make it widely usable have not yet reached maturity, making apt an analogy to the internet before Netscape.

However, all future blockchain-based applications benefit from the infrastructure build-out that Bitcoin has catalyzed, and vice versa. This is particularly relevant in light of major new entrants to the space both from the financial world (Fidelity, Square), Big Tech (Facebook/Libra) and governments (China’s central bank digital currency), who will contribute to this infrastructure build-out and may ultimately serve as massive on-ramps to a blockchain-powered digital economy.

If Bitcoin’s growth so far is any indication of the potential of internet-centric institutional innovation, the blockchain space is positioned to offer many attractive investment opportunities with asymmetric return profiles, both in new institutions directly and in the ecosystems that form around them.


Thanks to Spencer Bogart and Kinjal Shah for reviewing.

Source: https://blockchain.capital/blockchains-unlock-institutions-with-internet-scale/

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MicroStrategy Outperformed Nasdaq After $175M Bitcoin Foray

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Microstrategy outperformed Nasdaq after its $175 million Bitcoin foray suggesting that the asset class is luring in more traditional investors. Microstrategy made its second BTC purchase and pushed the total cash holdings to more than $425 million as we are reading more in today’s bitcoin news.

The company’s stocks increased by more than 9.3% after the news emerged so the investors responded as well and this could indicate a positive sentiment towards crypto assets. Microstrategy outperformed Nasdaq as the stocks increased by more than 9 percent and their CEO revealed the company purchase another $175 million in BTC. The investment makes up the part of the company’s strategy to diversify into crypto.

The company made a huge purchase of Bitcoin which marks the second time in two months. The first purchase was in August when it diverted more than $250 million worth of cash holdings to assets such as gold, silver, stocks, and Bitcoin. With the latest $175 million BTC purchase, the Delaware-based software company showed even more trust in BTC as a store of value as the company holdings stand at 38,250.

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Public filings with the SEC show that the company could exceed holdings into Bitcoin above $250 million. Microstrategy’s move into bitcoin seems to be pleasing the market participants as the company’s stocks jumped by 9 percent while Nasdaq Composite sat a one percent gains. The competitor IT services companies saw slight movements. Cognizant increased by 1.2 percent, Infosys was up by less than one percent as well as Citrix System that was up under one percent as well.

The intention of the company was capital preservation with the company CEO Michael J. Saylor saying that the first bet on BTC was:

 “A dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash.”

The famed investor Paul Tudor Jones, the investment in Bitcoin futures in May by Tudor BVI, the money managers and corporations are swimming in cash and this could have been the reason for the given green light to make investments in BTC for the capital preservation properties. Jones’ approval provides cover to institutions to make such similar moves. There has yet to be large-scale migration to digital assets but the market’s response to MicroStrategy could show that betting on Bitcoin could be appealing to investors that never actually openly bet on BTC.

DC Forecasts is a leader in many crypto news categories, striving for the highest journalistic standards and abiding by a strict set of editorial policies. If you are interested to offer your expertise or contribute to our news website, feel free to contact us at [email protected]

Source: https://www.dcforecasts.com/uncategorized-en/microstrategy-outperformed-nasdaq-after-175m-bitcoin-foray/

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Analyst Expects Bitcoin to Fall by $2K Despite Bullish Fundamentals

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As Bitcoin attempts a breakout move above $11,000, an analyst sees the cryptocurrency moving in the opposite direction.

TradingView contributor Vince Prince placed the latest BTC/USD moves inside a descending channel. The chartist wrote in his Thursday analysis that the pair is heading into a so-called distribution zone inside the Channel. The area earlier clipped Bitcoin’s upside attempts twice.

That led Mr. Prince to expect a third climb rejection.

bitcoin, btcusd, btcusdt, xbtusd, cryptocurrency, Euro, EURUSD, cryptocurrency, dollar, dxy

Bitcoin eyes an extended upside towards $11,500 while risking a sharp pullback towards $9,000. Source: TradingView.com

The chart above illustrated the bearish outlook. It showed that BTC/USD could extend its upside retracement to as far as circa $11,500. But then, the pair could undergo a sharp bearish correction towards the first downside target near $10,200, followed by an additional plunge towards $9,000.

The level serves as the bottom of the so-called Accumulation Channel, an area that, according to Mr. Prince, could renew Bitcoin’s bullish bias.

“When Bitcoin bounces again in the accumulation channel after the next markdown, the possibility for a bullish breakout increases,” the analyst added. “Nevertheless, it needs to gain substantial strength to move above the upper boundary. Otherwise, a bounce-back can already set in as the distributional channel still remains.”

Bitcoin Fundamentals

Mr. Prince’s statements followed a retracement rally in the Bitcoin market.

The cryptocurrency broke out of a tiring $10,000-10,400 range ahead of the Federal Reserve’s September meeting on Wednesday. It formed a cyclical top near $11,099 right after the US central bank’s chairman, Jerome Powell, committed to keeping inflation rates near-zero until 2023, as well as targetting inflation above 2 percent.

Market observers noted that Powell’s dovish approach could have Bitcoin aim for higher price levels. Jim Cramer, the founder of the Street, indicated that the central bank’s policy to aid the US economy by printing money makes Bitcoin an attractive hedge against fiat-led inflation.

“The $3 Trillion the FED printed changed everything that I believe in. I am concerned that I am not being prudent,” said Mr. Cramer. “And I now think that Bitcoin is prudent.”

Morgan Stanley’s Head of Emerging Markets and Chief Global Strategist Ruchir Sharma also pitched Bitcoin as an alternative to stocks amid central banks’ quantitative easing policies.

“To have about 5% or so of your portfolio in gold is not a bad idea, and if you’re a bit more adventurous, and I guess it’s more to do with demographics, then obviously search for bitcoin and other cryptocurrencies.”

Technical Outlook

Against Mr. Prince’s $9K target, other analysts expected Bitcoin to drop further but while eyeing a pullback from $10,500.

bitcoin, btcusd, btcusdt, xbtusd, cryptocurrency, Euro, EURUSD, cryptocurrency, dollar, dxy

Bitcoin trade setup by Posty. Source: TradingView.com

“BTC rejected at the $11.1k we marked out yesterday,” said one analyst. “It was always going to be a tough ask to break that on the first attempt. Could possible retest ~$10,550 before attempting $11.1k again. If bullish, no reason why this level wouldn’t hold as support.”

Meanwhile, another analyst extended his downside target towards $10,000-$10,200 should Bitcoin fails to hold $10,500 as support.

Source: https://bitcoinist.com/analyst-expects-bitcoin-to-fall-by-2k-despite-bullish-fundamentals/?utm_source=rss&utm_medium=rss&utm_campaign=analyst-expects-bitcoin-to-fall-by-2k-despite-bullish-fundamentals

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CREAM Shoots 54% After Binance Listing, Are We Reaching A Dump?

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CREAM shoots 54% after the Binance listing in a sharp reversal rally, as we are looking into it some more in the latest altcoin news.

The Malta-based trading platform will list the CREAM/BNB pair as well as the CREAM/BUSD trading pair according to the announcement. This will enable the users to deposit and trade their CREAM tokens against Binance Coin and the US-regulated stablecoin BUSD. The trading pair surged by about 54% in the past three hours of trading after the announcement was made. The pair hit an intraday high of $120 and the gains also came after the prolonged price action on the market. CREAM shoots up after the weekly rally of the lows at $0.001 to as high as $279. The upside move took cues from the market craze in the DeFi space.

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CREAM/USD hits fresh intraday high after Binance listing. Source TradingView.com

CREAM is a part of the decentralized lending platform named Cream Finance and serves as a governance token for the protocol that users are able to use as a permissionless borrow or lend service. Rather than the interest rates being set by individuals, CREAM determines them “algorithmically based on the proportion of assets lent out.” The project grew into the conscience of yield hunters after binance decided to support the protocol of the newly launched blockchain Binance Smart Chain. This protected CREAM finance from the ETH gas fees.

cream daily
CREAM 24-hour price (Source: Coingecko)

Despite the strong fundamentals, the drop started appearing on the Defi market due to the bad technicals. The CREAM/USD pair became the first victim of the massive dump which started during the $279 high. The profit-taking spree started and crashed by 73 percent at 0600 GMT today. It rebounded sharply after the news of the listing emerged which left many in the crypto space worried about the pump-and-dump movements. Micahel van De Poppe said:

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 “I sincerely don’t understand the fact of projects needing months to get a potential listing on Binance,” he said. “But, then, complete garbage like $CREAM and $SUSHI gets listed instantly with a bullshit reason of ‘becoming obsolete’. A complete sh**show for crypto and space.”

In the meantime, traders argued that binance was attempting to compete with the emerging decentralized exchanges such as Uniswap. The concerns got bigger when Cream finance confessed about facing a bug in the software in its source code. The DeFi platform commented that it paused staking due to the input error.

DC Forecasts is a leader in many crypto news categories, striving for the highest journalistic standards and abiding by a strict set of editorial policies. If you are interested to offer your expertise or contribute to our news website, feel free to contact us at [email protected]

Source: https://www.dcforecasts.com/uncategorized-en/cream-shoots-54-after-binance-listing-are-we-reaching-a-dump/

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