Opinion on bitcoins: long life to the king



If you're wondering how you should treat Bitcoin as an investment vehicle, let me share my non-expert opinion with you.

End of story, thank you very much for reading. [19659004] See you next time.

– this article should not be taken as financial advice as it represents my personal opinion and opinions. I have some savings invested in cryptocurrency, so take everything I write with a pinch of salt. Do not invest what you can not afford to lose and always read as much as possible on a project before investing. Never forget: with great power comes a great responsibility. Being your bank means you are always responsible for your money

Investments in cryptocurrency are one of the hottest topics we can discuss today, as there are many different opinions about what the future might hold for Bitcoin.

Because of regulatory bodies around the world that have different approaches to the subject while at the same time Bitcoin is decentralized and does not belong to a single entity / organization, investors usually feel uncertain about the & # 39; future use of digital cryptocurrencies.

An important point, however, is that from the point of view of money, which is what matters at the end of any investor Bitcoin is undoubtedly one of the strongest profit vehicles since he came to life – probably the best resource ever created: digital gold.

The Bitcoin Timeline

First we take a price level, as when Bitcoin was around $ 8200. Now, if you want to know if that price level is interesting, consider the following: the probability of having invested in Bitcoin at any time in its period since its inception while in fact it takes advantage, it is about 97%.

Sounds too good to be true, right?

Except it is not.

Making a rough estimate, we can quickly see that Bitcoin has only exceeded USD 8200 for around 137 days. Since it is trading for around 1917 days, there is a ~ 97% chance of buying Bitcoin when its price was less than 8200 USD.

Of course this also means that you only had 3% chance to sell at the right time. [19659004] There's always a dark side in everything, is not it?

My point is still valid: if we take into consideration only price and time, in reality it is much more probable that you have made a bet at the right time, than in front of you.

I know these statistics are fun to play, but they hardly bring you any real value. Knowing when you may have bought and sold is important from a learning standpoint, although real investor education takes place in a very special way; usually, making bad bets and suffering for the bearish seasons, this is

What you want to know is not how much money you could have made. What you and everyone else really want to discover is how much you can still do.

And today, this is what I will discuss.

With some twists, some side-track topics and the usual delicious shenanigans.

Before moving forward, remember the following warning:

Anyone who tells you that there are not money for money or do not need to worry about money because they have so much, diversified on so much goods, their risk is quite low.

Return to what matters.

The Future Bright?

Depending on where your political and economic standpoint is, Bitcoin can be the savior of the world or its end.

In my humble opinion, as an economist, I think most of us are completely wrong about how he thinks money works. I will not go into too much detail on the subject, since I really want to write an exploratory paper on how (I think) money should be earned and accessible. The point that is worth extrapolating is that, contrary to popular belief, I think there are many different ways to properly redistribute wealth and create incentive systems for anyone who can earn cryptocurrency.

It seems illogical that the biggest problem in cryptocurrency (adoption) could easily be solved by creating ecosystems where users earn tokens to do things.

Literally anything.

Part 1: The Bitcoin Market

When we look at how the market has evolved, since its inception, I would expect this "bubble" behavior to continue, perhaps indefinitely.

There are many factors that are balanced in price behavior, especially market manipulation, regulatory actions and, of course, both institutional money and other financial investment vehicles (such as futures or Bitcoin ETFs).

Historically speaking, Bitcoin has been kind to long-term investors

Short-term investors can not complain too much, since Bitcoin is one of the most (or not the most?) Volatile assets out there.

In addition, I believe smart-money is coming to full capacity, as usually happens after every bitcoin bearish season.

Remember what happened after the mini-crash in March 2017?

Do you want an expert opinion on the real value of Bitcoin and possible triggering factors for mass adoption?

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As with everything in life, there is good and bad (sometimes even ugly); and Bitcoin is not an exception.

If there are many factors that could trigger a price increase, such as mass adoption, there are others that can have an opposite effect.

We check which triggers can potentially call bear and bull markets.

Manipulation of market prices

For me this is definitely the great master behind the main price run we saw at the end of December 2017 and January 2018. a little bit of time to really understand why, but because of the fantastic work of so many different people, we now have a better and clearer picture of what actually happened.

Tether manipulated the markets by manipulating the price of Bitcoin. There has been no technological advancement in either Bitcoin, nor large amounts of stupid money entering the market.

The key argument pointed out by Prof. Griffin on the research paper "Bit" was that "When the price of Bitcoin collapsed, purchases with Tether tended to increase, helping to reverse the decline. where Bitcoin has risen, Griffin said he did not see the opposite. "It seems that Tether was protecting the price of Bitcoin from crashing.

To do this, large amounts of Tether were emitted and used to buy Bitcoin on Bitfinex. Of course this would not be a big problem if Bitfinex were not owned by the same people who own and coin the Tether. But it's not even worse. Consider this: would not you expect a company that claims to hold reserves in a 1: 1 ratio between Tether and USD, is fully externally verified and proves proof of those USD reserves?

Another huge red flag if you ask me.

To those who now claim " oh but some lawyer guys have just come out and have said that Tether's bank accounts are fully supported, so it's all good ", please, please do actually excavation. [19659004] The only thing that Freeh, Sporkin & Sullivan LLP (FSS) said about Tether was: " FSS is convinced that Tether's unlimited assets exceed the balance of the fully-hedged USD Tethers starting from 1 June 2018. "

This does not seem to me to be a real guarantee

Especially when considering the "official" news source, which was not signed by the FSS committee on the Tether website, it also has stated that "the procedures performed are not intended to provide guarantees"

Bitc oin Futures

My opinion about futures is a little fuzzy. I understand their purpose and I also recognize their effectiveness in the markets of taming, especially in the short term. Does it work in the long run?

In 1974 the first gold futures contract was traded on the COMEX exchange in New York. Trading started on December 31st.

Three years ahead, and gold has returned to new highs.

Exactly. No one can tame the ambition of human beings to increase their wealth exponentially from time to time; there is no futures market that can ever stop speculation. Money speaks louder and this means that there will always be new smart money that will enter the current business, raising the price. What will happen is that those same people will have an extra incentive.


As we have seen in the past, the usual trigger for adoption is smart money that enters any market. Bitcoin, of course, is not different.

Smart-Money -> Media Hype -> Adoption

One might think that this oversimplifies the functioning of things perception of Bitcoin public.

Is it a good investment vehicle? Do I need to store money in Bitcoins? Do other people really accept it?

The response to world adoption is acceptance; but the acceptance comes only with adoption.

It is the dilemma of the hen's egg. The most beautiful redundancy.

This means that both adoption and acceptance walk hand in hand; one leads to the other and nobody can exist alone.

That's why the manipulation of the market or the future of Bitcoin, although it is the bad one the bad one. Manipulation usually means high volatility, which in turn brings huge profits.

Of course, I understand that it is not useful to achieve the ultimate goal of cryptocurrencies, which for me is the ability to shift the redistribution of wealth.

t exclude the hypothesis that this feature of the cryptocurrency will not be the catalyst for its destruction; however, if we apply logic and reasoning taking into account the recent history of Bitcoin prices, we can clearly expect volatility to bring more people into the market.

Price volatility

Highs and lows are usually a simple and easy way

And, as you may know, bubbles have a certain tendency to pop.

History has taught us that it is usually not a question of if, but when.

[19659004] When the downward price movement dominates a market, the only thing you can do is usually sit down and wait. Cryptocurrencies, particularly bitcoins, are subject to huge falls, yes; but we can also expect massive rebounds at some point

There are always some unbreakable rules followed by successful investors in order to be successful.

Again, please remember that this is not a financial council

For me those are:

  1. Invest only what you can afford to lose
  2. Buy when there is fear, sell when c & # 39; is hype,
  3. The market behaves in a wavy way. Be patient and wait.

Because I follow these rules I'm not afraid of bear markets. Heck, remember only 2012-2013.

Whatever goes around, being passive in this way is sometimes a better decision that anticipates everyone.

Think: what are the chances that you have actually imagined how to beat the whole market?

That's why I personally do not trade, but I envy those who do it successfully.

You need cunning, agility and steel balls; otherwise emotions will most likely triumph over reason.

In any case, the chances of getting stuck at a very low price level (for example, if you bought bitcoins close to USD 20.00) over a long period of time, are not

However, since the time is a relative thing, even our ability to be patient is relative. What I consider to be an acceptable amount of time, you could see it unbearable.

  • Would you wait 1 year to increase your 100% wallet?
  • What if I could increase it by 500% in a space of 2 years?
  • Even better, and if it grew by 5000% over 3 years?

Are you thinking "I'm sure I could do it"?

Okay, then do a quick exercise: [19659004] Have you ever done anything in the long run, at least how long are you going to invest, which costs you time, money and does not pay back anything?

If so, then I'll fight you can surely be able to joke .

Otherwise, perhaps you should consider a different approach.

Patience is not an easy skill to learn when we live in an inflationary world: tomorrow's money will be worth less, which means you have to continue to have more and more current value, instead of focusing on future value.

Faster payments, less taxes [19659058] Since the introduction of the Blockstream Store in January, the Lightning network has grown enormously. Around the ad, the Lightning network had a total of 46 open channels and 0.682 BTC of capacity. Today there are around 7,800 open channels with 26 BTCs of capacity. This is a 16.856% increase in channels and a 4.084% increase in channel capacity in 6 months!

With the increase of the Lightning network, additional integration options will become available that could provide users and exchanges with security and benefits of ease of use beyond the two integration strategies of base described above.

  1. Exchange specific app, Lightning

With Lightning, it may become possible to allow exchange users to perform operations from within dedicated local apps, making deposits and withdrawals transparent for users. These apps can be run on desktops, smartphones or on more secure hardware devices such as Ledger Blue. With the integrated exchange functionality with a Lightning portfolio, funds can be transferred under the control of an exchange for the minimum time required to execute a transaction. Immediately after an order has been completed or has expired, funds will be returned to the user's app / wallet control via Lightning. This could potentially create a simpler user experience and reduce the risk of exchanges in case of security breaches, as the amount of funds stored in hot wallets could be much lower.

  1. Deposits and withdrawals through the public network of Lightning

With the two integration strategies described above, it is assumed that users will open channels directly with exchanges. This will be economical for large-scale merchants who often transfer money in and out of exchanges. However, with the development of the Lightning network, it will be possible for users to have open channels in the public network of Lightning and allow those users to route deposits and withdrawals via intermediate nodes. It will probably take some time before there is enough connectivity within the Lightning network to work, but when this is possible, it will allow the use of a user's channels for a variety of different types of payments and multiple exchanges. With channel configuration costs across multiple applications and counterparts, Lightning transactions will become cheaper and cheaper.

There are many ways to improve scalability and external chains are a great way to get it.

Why increase the size of the block is a better solution, if the stress on the small transaction will increase due to the increase in tariffs?

Scalability will happen, just a little bit differently than one might expect.

We already have the single piece that allows scalability to happen: an underlying asset can use a deposit of value.

Whatever is built at the top does not matter if the underlying layer, the bitcoin blockchain, is still used as the level of regulation.

From Shnorr's batching and signatures, Lightning Network and atomic swaps, there are many ways to improve transaction throughput, as long as our imaginations extend. You could potentially convert fiat digital currencies to Bitcoin. You can have other side chains that interface with a single app, in the sense that if it is easy to exchange tokens and other cryptocurrencies with Bitcoin, you will still use it as a base level to store your "earnings".

The point is: do not focus too much on something that will eventually happen. All (including myself, complete disclosure) have focused on technology and price so much, we forgot to take a couple of steps back and review some key debates, crucial to the overall acceptance of Bitcoins.

Part 2: Tokenomics, The Key To Adoption

If you wonder how tokenomics can encourage user adoption, think about the best way you can redistribute the value. In Bitcoin, this is done through the extraction and sale of the current currency.

At the moment most of the projects we see, generated here and there, which actually try to implement token-based business models, are forgetting some key aspects of the most important metric of everything: purpose .

Andreas usually says: what can benefit from your decentralization?

I say: what can your business give to decentralization? [19659004] The reason is simple, if you create a system where you need to "subscribe" or spend money on tokens to participate, then the system is not inclusive.

If you build a system where participants are rewarded for participation, as Bitcoin rewards blokchain security miners, then you can build any system of incentives that users can see as real value.

By combining the power of fast payments with tokenomics, I can easily see a world where the value is simply traded and gains

Decentralization does not mean "screwing the intermediary" .

In reality, decentralization depends very much on the middle man. Except we can all become that intervention because while we spend time on a certain network, doing certain things, we are rewarded.

Decentralization means implementing systems that correctly balance the payments of the reward, to all the participants, in many different ways.

The intermediary is always well received, I strongly doubt that the world would survive without platforms and distributors and companies that link networks of producers and consumers, investors and start-ups, even creditors and debtors.

And all work must be paid in kind, is not it right?

If cryptocurrency correctly uses its core technology, there is no reason why atomic swaps do not allow the emergence of many different media -men, paying very low rates, competing to maintain power to convert some crypts into another.

If cryptocurrency is easy to convert into other forms of money, why should not we just use cryptocurrency? Trust is supported both by the number of users in a network and by its internal security of the registry.

Because currently Bitcoin seems to be the most technologically available system to store money, it is only a matter of time that it becomes the safest and most economical way to transfer and use money.

However, do not expect the path to the bottom of the rainbow to be without danger.

No technological progress, which promoted controls and balances to avoid the centralization of power and decisions, was never received in nature.

Why would the world be different from cryptocurrencies?

How the financial system sees the cryptocurrency

When we hear that countries prohibit cryptocurrencies, exchanges are blocked by the rule of man (like India), attacks to promote the uproar and the fear among small investors is the moment when we know we are afraid.

Decentralization means breaking concepts and viewpoints of the world as we never would have thought

Companies that develop encryption or savings apps, encryption apps, decentralized storage and infrastructure sharing, cryptographic tokens or any other encrypted system , they will soon realize that the simplest way to bring value is to give value.

Yes, go ahead, create your money.

It has no value, they say?

It's useless, they say?

Fantastic! So nobody would think if I just gave you everything. How did the bitcoin.

The more you give to people, the better

If a company has a product that holds value and then decides to distribute a token with a clear purpose inside the ecosystem of that product or organization, why should not people consider this precious token

If everything holds true only because we believe it has value, I see no reason why Bitcoin has limited growth.

As long as the user network continues to grow, the price will end for

Because of its deflationary properties, if people keep saying that bitcoin has value (buying it), then I see no reason for a ceiling of price.

* Maybe we're really going to the moon!

My opinion may be wrong, one day the bitcoin could disappear into oblivion and we will continue to remain faithful to the fiduciary currency.

If this were not the case, the probability that the price of Bitcoin would skyrocket would one day be incredibly high, simply because it has weighed thousands of times in the past – and history has a tendency to go around in cycles.

I know: past performance does not indicate future performance. However, I have not heard of a network that has grown in numbers and not in price.

If I had to bet on the success of the cryptocurrency, could you bet on a system that no nation or group of people controls, or in a fiduciary system based on a pyramidal logic?

I hope you enjoyed the article!

Give him a comment below and leave a comment. Tweet me @febrocas

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