of Blockchain came into existence
around 1991. But it’s only around 2008, credit to the whitepaper from Satoshi
Nakamoto on “Bitcoin: A Peer to Peer Electronic Cash System”, the platform on
which a bitcoin could be utilized started becoming popular. As the
decentralized and digitalized currency seemed promising as an alternative, the
framework on which it functions came into limelight, and hence people
started taking Blockchain Ecosystem earnestly.
The blueprint of blockchain initially focused on financial services only. But
after observing and examining its potential, the architecture started being
employed in several other industries as well.
Inter-Connection between Cryptocurrencies, Stablecoins,
For someone who knows the inside-out of
the financial industry may observe the connecting points between Cryptocurrencies,
Stablecoins, and Central Bank Digital Currencies (CBDC).
For a layman, he/she may view these terms as different iPhones coming into the market
or the updates for the software making it more efficient. In the initial
interval since blockchain’s entrance, several hurdles came across in the forms
of scams, phishing, etc leading to the increment of volatility in the
structure. Just like in the scenario of the entrance of the World Wide Web,
with empirical evidence, the overall structure got modified. As
cryptocurrencies started being prominently utilized around 2014, various frauds
also occurred in that interval. Due to numerous cases of volatility being
compromised, Multinational Corporations and other stakeholders lost a big
proportion of money. To compensate and fix the issue, stable-coins came into
the picture. One key factor among others which appealed stakeholders because of
its similarity with traditional currency. That objective is acting as a store
of value and a medium of exchange and a unit of account as well.
A stablecoin at the core is a
cryptocurrency that maintains a stable value concerning the target price like
the US Dollar. Mostly, stablecoins combine the algorithmic techniques along
with the management of supply. Doing so makes the market incentivize by making commerce
the coin for $1 or less. A stablecoin unlike other cryptocurrencies can minimize
the exchange rate of volatility but isn’t entirely open and permission-less. Technically
speaking, stablecoins are fabricated over Ethereum Blockchain Protocol. The
reason for it is to swiftly modify the compatibility of the freshly issued
asset along with the pre-existing infrastructure. The most recent modification with
regards to stablecoins is in corporate governance. Specifically,
crypto-exchanges, clearinghouses, and many more to come can be categorized
under Electronic Shares on a Distributed Ledger. In a nutshell, the recent
version of stablecoins may establish an architectural layer for crypto assets.
Theoretically and practically as well, stablecoin could become the norm for
usage as it can permit liquidity to exchanges. To make the blockchain ecosystem
enter the mainstream financial institutions, CBDC’s would have to imbibe such
newer digital currencies and invest in them to regain the people’s trust.
Observing and using such technologies in daily activities will make them
(individuals utilizing the technology) want to use blockchain,
cryptocurrencies, stablecoins, consciously, or unconsciously.
Cryptocurrencies perceived as Speculative Bubbles:
The most recent bubble in the technology
industry was the dotcom bubble also referred to as the internet bubble. A
bubble or one may also call it an illusion, starts with an assumption that firms
in which venture capitalists invest may deliver profits in the future. But due
to several factors like non-genuine technology, discarding financial
accountability, focusing more on brand building, etc, the bubble or the
illusion busted. At the core, a
speculative bubble can be examined and
deduced of consisting economical and behavioral factors. A bubble is defined as
a scenario where the circulation or the broadcasting of some information
propels the investor’s eagerness psychologically from one individual to another.
Economists and people in the Financial Services Industry as well have
scrutinized prior bubbles busted. Some common factors/biases include:
- Purchasing an overvalued
commodity even after knowing it beforehand.
- Building expectations based
on preceding prices.
- Thoughtful disparity.
- Herd behavior.
- Fear of missing out.
- Exaggerated optimism.
According to Hyman Minsky, an American
economist, there consists of 5 phases in a life-cycle of a bubble, namely:
Displacement, Boom, Euphoria, Profit-Taking, Panic phase. In the displacement
phase, investors commence intriguing about a fresh idea’s prototype. In the
boom phase, a slight increase in the price is observed. The third phase or the
euphoria phase experiences a tricky scenario where a commodity is purchased at
an overvalued price knowing about it beforehand, just to sell it to an amateur
at a higher rate. In the profit-taking phase, financial institutions, institutional
investors, and several others start identifying a forthcoming crash and selling
assets for a profit before the bubble bursts (specifically those who’re able to
detect the unavoidable crash). In the last stage, the price of the
asset/commodity starts collapsing gradually.
The internet bubble happened around the mid-1990s
to 2002. The initiation took place with the launch of the Mosaic browser. The
displacement phase took off in 1993, as people were getting new ideas to do
business online, and fresh regulations to back them up. Credit to that, more
companies began opening up, and hence, more investors started investing in
firms being operated through World Wide Web. This made the entrance of the boom
phase. With investors becoming overly optimistic and confident, the euphoria
stage entered the picture. The simple reason being, the NASDAQ index indicated
a value of around 500 in the initial 1990s, while it reached 5048 in March
2000. As a large percentage of Dot-com firms believed the motto, “get big
fast”, the profit-taking phase started around 2000. Various pieces of research
imply that as the blockchain ecosystem is in its growth phase, stablecoins,
cryptocurrencies, and alike digital currencies would be of big aid in the long
Functional Approach against boasting of Regulatory Uncertainty:
Individuals or firms mostly tend to go
against the Rules and Regulations because of uncertainty in the policy designed
and implemented, loopholes not getting rectified, political or personal
vendetta, etc. As the overall Blockchain
Ecosystem’s policies and regulations
are still underway, some portion of the population has started boasting about
the regulatory uncertainty out of fear or constructive criticism. There’s a
saying in the sales and marketing field, “one should know the appropriate time,
place, medium of communication, and the psyche of the consumer to convince them
to purchase or think of buying a product/service”. Similarly, thorough research
needs to take place before implementing a policy, and that to which has a
nature of modifying constantly depending upon numerous variables. A premature
regulatory or postmature regulatory would have certain drawbacks and not offer
a desirable result. On one side, the blockchain
architecture and applications
run through it updates quickly, while policy drafting and implementing on the
ground is a time-taking process.
Political, Personal, and Economical Hurdles:
There are quite a handful of people who
prefer to view everything from a pessimistic perspective. Few economists who
might be renowned globally for their contributions in the area of economics,
but don’t know much about the latest technology, and still want to offer their
point-of-view just for namesake. One illustration of it is an individual by the
Roubini. The individual may not a lot about
economics, but not much about the inside-out of the technology. Him making a
decision that may impact hundreds of thousands of lives (socially,
technologically, economically) would not be a good idea. An individual or a
group of individuals who have expertise in both the financial industry and
technology industry should be allowed to make pivotal decisions and not create
fear among the population across the world just for their personal or political
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President Maduro: Venezuela Seeks Opportunities To Use Cryptocurrency For Global Trade
- Venezuela’s cryptocurrency story continues as the country’s President Nicolas Maduro has presented new use cases.
- A recent report informed that the South American nation is studying the possibility of using digital assets in trades alongside the national Petro.
- President Maduro has presented new anti-sanctions law in the Constituent National Assembly. In a recent speech, he asserted:
“The anti-sanctions law is the first response to give new strength to the use of petro and other cryptocurrencies, national and global, in domestic and foreign trade, so that all cryptocurrencies of the world, state and private, could be used. This is an important project that is under development.”
- The news comes after Maduro suggested last year that his country could adopt cryptocurrency payments.
- Additionally, Venezuela signed a new tax agreement this summer that enabled the nation to start collecting taxes and fees in the Petro.
- A study reported by CryptoPotato revealed that digital assets already play an essential role in the country’s struggling economy. Venezuela’s intensifying financial crisis has catalyzed significant interest in cryptocurrencies as people seek opportunities to escape the devaluating national currency.
- The Bitcoin peer-to-peer volume exemplifies the growing interest in the primary cryptocurrency within the country. As per data from coin.dance, the BTC P2P volume on LocalBitcoins has been continuously surging in the past several months.
Leader That Allowed Scams: TRON’s Justin Sun Responds to Claims by Ex-Employees
Yesterday The Verge published an elaborate article portraying a picture of Justin Sun’s leadership at BitTorrent post the peer-to-peer file-sharing site’s acquisition by the TRON foundation.
Sun later responded to the ‘false-claims’ made by TRON/BitTorrent’s ex-employees in the article with ‘An Open Letter to Anyone Who Cares to Read’ on Medium.
Claim: Megalomaniac Leader; Response: True Libertarian
In the supposedly expose piece, author
Refuting the above portrayal of his leadership, Sun, in his response, stated that he has devoted his entire life ‘to being a responsible, global citizen’. Adding to this, Justin said that is a true champion of libertarian principles for a significant portion of his life.
I have devoted myself to being a responsible, global citizen throughout my entire life, spending significant portions of my personal and professional life to activities promoting universal values of respect, liberty, equality, and kindness.
The TRON and BitTorrent chief impressed further on his ‘global’ approach to things. He explained that the TRON Foundation harbors a ‘global team of talented contributors and developers’. And that he takes ‘pride in working’ with this global community to make TRON ‘one of the greatest decentralized blockchain protocols’.
Claim: Freedom Suppressor; Response: Upholder Of Human Rights, Individual Values
Dunaway reportedly engaged in conversations with folks who are/were associated with the TRON brand and the work culture. From what he gathered, Justin enforced a draconian company culture, with employees officially following the ‘9-9-6’ norm.
According to the article, TRON’s HR had Slack replaced with its Chinese counterpart DingTalk. The communication platform had an in-built surveillance mechanism that would use ‘Apple Health to count people’s steps’. Also, DingTalk used to ping employees literally all the time.
To this, Sun responded by saying that he has left no stone turned in, establishing a work culture that respects.
diversity and individuality through a culture that cherishes fundamental human values freedom of speech, user privacy, intellectual property protection, kindness, a diversified working environment, and compliance with legal standards.
Justin went on to comment that TRON and BitTorrent operate with a ‘globally collaborative team’. One that upholds and respects the ethos of cross-culture teams. Sun claimed that the folks at TRON folks have ‘worked hard’ to create a collaborative work culture. One that values freedom of speech and individual privacy.
Claim: Suppressed Criticism, Allowed Scams; Response: No Control Over Protocol Functioning
The Verge piece mentioned that ‘decentralization’ was just a facade for what was happening behind the curtains. Justin Sun and his core officials exercised strict control over content moving about and within the TRON network.
This involved allegedly paying a Redditor to ‘erase negative posts’. Which later drew the ire of the community.
Free speech is part of the ideology of decentralization, where ideas flow without gatekeepers. Tron started deleting any post it wanted.
The article also claimed that TRON’s administration team was silent and allowed the perpetration of scams on the network. While this happened, scammers and the scammed continue to grow in numbers while the management did nothing to interfere.
Justin, in his Medium post, said that he and the entire TRON administration team function sans control. Even though the team at TRON works to upgrade the platform, they do not exercise any censorship/regulation.
…we have no control or discretion over what applications use the protocol, what data is transmitted, or how its community members use it.
Sun went to add that he and his team are proud of TRON and BitTorrent’s achievement over the years. He went to quote that both have collectively ‘served 2 billion users around the world. These include ‘numerous enterprises, universities, and governments’.
Lastly, the TRON and BitTorrent boss struck down all claims made by ex-employees Lucasz Juraszek, Richard Hall, and Cong Li. Justin declared that the TRON foundation’s legal counsel has submitted all the requisite proofs and evidence pieces to the court. “We believe the decision will speak for itself”, he said.
BTT and TRX’s price didn’t seem to undergo any correction following the release of the bitterly scathing Verge piece. On the contrary, BTT is actually up 2.3% in the last 24 hours.
Featured image courtesy of QZ.com
Ethereum Price Analysis: Will ETH Surpass 2019 Highs Towards $400?
ETH/USD – Bulls Struggling To Pass 2019 Highs
Key Support Levels: $350, $336, $325.
Key Resistance Levels: $364, $378, $390.
Ethereum pushed higher last week to reach the 2019 highs at around $364 over the weekend. Unfortunately, it has not been able to overcome this resistance in the past four days of trading as bearish divergence popped up on the short term charts – highlighted in our last analysis.
For now, Ethereum is finding strong support between $350 and $355; however, it is looking increasingly likely to break this support soon as the short-term bearish divergence continues to play out.
ETH-USD Short Term Price Prediction
If ETH does penetrate back beneath $350, the first level of strong support lies at $336 (100-days EMA). Beneath this, additional support lies at $324 (.618 Fib), $320, $310, and $300.
On the other side, the first level of resistance lies at $364 (2019 highs). Above this, resistance is expected at $378 (bearish .382 Fib), $390, and $400.
The Daily RSI did dip beneath the mid-line to suggest that the sellers are battling to gain control of the market momentum.
ETH/BTC – Bears Continue To Face Resistance at Falling Trend Line
Key Support Levels: 0.033BTC, 0.032 BTC, 0.0315 BTC.
Key Resistance Levels: 0.0337 BTC, 0.0347 BTC, 0.0352 BTC.
Against Bitcoin, Ethereum continues to face the resistance at a falling trend line that has dictated price action during September. Each time ETH attempted to break above this falling trend line, the coin was rejected and headed lower.
On Monday, ETH attempted to push beyond the March 2019 support at 0.0337 BTC but could not pass it. As a result, ETH moved sideways this week and has returned to the falling trend line. Here, it can be expected that ETH should be heading lower – especially with the daily RSI flattening out in the bearish territory.
ETH-BTC Short Term Price Prediction
Looking ahead, if the trend line rejects the sellers, the first two levels of support lie at 0.033 BTC and 0.032 BTC. Beneath this, support lies at 0.0315 BTC (100-days EMA & downside 1.414 Fib Extension), 0.0311 BTC (.618 Fib Retracement), and 0.0305 BTC.
On the other side, if the bulls can penetrate the falling trend line, the first level of resistance lies at 0.0337 BTC (March 2019 Support). Above this, resistance lies at 0.0347 BTC, 0.0352 BTC, and 0.0361 BTC (March 2019 High).
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Cryptocurrency charts by TradingView.
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