Misir Mahmudov, a widely-followed and respected bitcoin (BTC) analyst, has argued that “most educated people fail to appreciate bitcoin because they only specialize in one field.” In order to truly understand how bitcoin works, Mahmudov, a financial economics student at Columbia University, recommends having some grasp of basic computer science and economics concepts.
He has also suggested learning more about cryptography, game theory, central banking, psychology, and distributed systems. Having some idea about these fields, Mahmudov notes, should help people in truly appreciating bitcoin and what it aims to offer. While pursuing their undergraduate studies, most people usually choose one or two main areas of focus such as economics, business studies, or a more technical discipline such as computer or mechanical engineering.
Those who are more interested in gaining a deeper understanding of how the human mind works, or how nation states are formed, might decide to major in social sciences such as psychology, sociology, and international politics. However, it is difficult, if not impossible, to become a master of all these subjects. But that may not be necessary in order to understand why Bitcoin is one of the most important inventions in modern history.
First proposed in a whitepaper published in November 2008 by its pseudonymous creator, Satoshi Nakamoto, the Bitcoin protocol specifies how an electronic peer-to-peer (P2P) cash system should work. For the first time, modern cryptographic techniques were applied to create what’s now a multi-billion dollar experiment in monetary theory.
Understanding The Importance Of Purchasing Power And Deflationary Assets
Unlike fiat currencies, which are inflationary as central banks can print an unlimited amount of paper money, there can never exist more than 21 million bitcoins. Being able to understand the implications of this when it comes to purchasing power requires some research into the various problems related to the fiat-based currency system. In countries like Zimbabwe and Venezuela, the national currency has become practically worthless because it’s being created and controlled by a poorly managed centralized bank. Mismanagement of a nation’s money system by a single entity has led to hyperinflation in several areas of the world, which has made the cost of acquiring basic goods and services practically unattainable for the millions of citizens in these developing countries.
Acquiring The Background Necessary To Understand Arguments About Bitcoin
While prominent economists such as NYU professor, Dr. Nouriel Roubini, have argued that cryptocurrencies will not be successful in the long-term, there are other well-known economists such as Dr. Saifedean Ammous who firmly believe that Bitcoin’s decentralized value transfer system is a superior form of money. Although we may not agree with all the viewpoints expressed by Roubini or Ammous, our ability to interpret and analyze their arguments about decentralized cryptocurrencies would improve if we were more familiar with economic theories.
With Bitcoin being the first deflationary asset that has been adopted at a relatively large scale, the concept of scarcity and how it relates to an asset’s ability to become a long-term store-of-value (SoV) is perhaps best understood and articulated by former Google engineer, Vijay Boyapati. According to Boyapati, who’s known for his convincing arguments about why the world’s most dominant cryptocurrency will become a great SoV, Bitcoin has “never been useful as a medium-of-exchange (MoE) because the opportunity cost of using it as such is huge. The only people who can stomach that cost are people for whom the transaction cost of not using Bitcoin is even bigger than the opportunity cost (i.e., illicit market trades).”
Understanding Bitcoin At The Psychological Level
Although Boyapati appears to have a professional and academic background only in mathematics and computer science (as detailed in his LinkedIn profile), he has been able understand how and why Bitcoin could evolve into a legitimate currency and a globally recognized asset. As he has explained using many different examples and scenarios, Bitcoin would have to work effectively as a unit of account, MoE, and a SoV in order to become a currency that is widely accepted by merchants worldwide.
In addition to involving concepts from economics and technical disciplines such as computer science, Bitcoin has to be understood at the psychological level. Before a currency or asset becomes widely accepted, people need to feel comfortable using it. The more confident people are about something, the more receptive they will be towards (at least) trying it, in order to determine whether it will suit them or work for them.
In places where the country’s citizens have lost trust in the national currency and financial system due to corruption, it will become increasingly difficult for the same centralized institutions to regain the same level of trust they once took for granted. Because decentralized currencies like Bitcoin are designed to minimize trust, as they don’t require intermediaries to settle transactions, it can be challenging at first to become comfortable with this idea.
Becoming Comfortable Conducting Transactions Without Intermediaries
Becoming familiar with how Bitcoin transactions are transparently recorded on block explorers can give people the confidence they need to start using blockchain-based currencies. Put simply, a blockchain is a type of data structure that allows multiple parties to engage in transactions without requiring a trusted intermediary. In most cases, a counterparty is also not needed when conducting cryptocurrency transactions.
When the average person is first introduced to these crypto-related concepts, it can be challenging to fully understand how a monetary system like this could actually work. After carefully reviewing how a blockchain is designed to function, it becomes easier to start grasping how a decentralized digital currency such as Bitcoin can be reliably used to pay for goods and services.
In the coming years, cryptocurrency-related technology is expected to improve and a larger percentage of the world’s population will likely begin using the internet to learn and engage in business activities. Many believe that Bitcoin and other decentralized coins and tokens may just become a widely-accepted part of Web 3.0, which is a term used to refer to new and evolving set of protocols that will be used to power the internet in the future.
Litecoin (LTC) Price Analysis: Bulls Eyeing Upside Break Above $48
- Litecoin price is slowly recovering and trading above the $45.00 resistance zone against the US Dollar.
- LTC price is now trading above $46.20 and the 55 simple moving average (4-hours).
- There was a break above a major bearish trend line with resistance near $45.85 on the 4-hours chart of the LTC/USD pair (data feed from Coinbase).
- The pair is likely to continue higher if it clears the key $47.30 resistance zone in the near term.
Litecoin price is currently showing positive signs above $45.00 against the US Dollar, similar to bitcoin. LTC price could rally if it clears $47.30 and $48.00.
Litecoin Price Analysis
In the past few sessions, there was a steady rise in bitcoin, Ethereum, ripple, and litecoin against the US Dollar. Earlier, LTC price formed a support base above the $43.00 level and started a decent upward move.
There was a break above the key $45.00 resistance level to start the current recovery wave. Moreover, there was a break above a major bearish trend line with resistance near $45.85 on the 4-hours chart of the LTC/USD pair. The pair is now trading above $46.20 and the 55 simple moving average (4-hours).
A high is formed near $47.14 and the price is facing a major hurdle near $47.30. There was a minor downside correction below $46.00 level. The price dipped below the 23.6% Fib retracement level of the recent wave from the $41.65 low to $47.14 high.
However, the price remained well bid above the $45.00 support and the broken bearish trend line. It also remained above the 50% Fib retracement level of the recent wave from the $41.65 low to $47.14 high.
The price is currently rising and approaching the key $47.30 resistance level. A clear break above the $47.30 and $48.00 levels is must for a sustained upward move. The next key resistance is near $50.00, above which the price could rally towards the $52.00 and $52.50 levels.
Conversely, the price might fail to continue higher above $47.30 or $48.00. An initial support on the downside is near the $45.00 level and the 55 simple moving average (4-hours).
The next major support is near the $44.40 level, below which the bears are likely to aim a test of the key $42.80 support level (a multi-touch zone).
Looking at the chart, litecoin price is clearly recovering and trading above the $45.00 resistance zone. Overall, the price is likely to continue higher if it clears the key $47.30 resistance zone.
4 hours MACD – The MACD for LTC/USD is slowly gaining momentum in the bullish zone.
4 hours RSI (Relative Strength Index) – The RSI for LTC/USD is currently above the 50 level.
Key Support Levels – $45.00 and $42.80.
Key Resistance Levels – $47.30 and $48.00.
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
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