“Time to say bye-bye to 750 days of bear market,” says analyst as XRP climbs above $0.260
XRP seeing lot of traction in Mexico, the Philippines, and Australia
Today’s winner of greens in the crypto market is XRP.
The third largest cryptocurrency has been failing to see much action despite Bitcoin recording substantial gains since we entered into 2020. Even altcoins like Bitcoin SV (BSV), Bitcoin Cash (BCH), Dash, Cardano (ADA), Ethereum Classic (ETC), and IOTA has been climbing up crazy
But today, among the top 15 cryptocurrencies, XRP is the top performer with 7.15% gains recorded in the past 24 hours while trading at $0.257, a level last seen in November. In the BTC market as well, XRP is up by 6.32%.
According to trader Scott Melker, “It’s finally time for XRP,” as bullish divergence on daily finally plays out.
“Alarms went off,” he continued as XRP breaks through key resistance at 0.00002533 against BTC. A close above the descending line at 0.00002709 and a potential retest here at support, he said would be “positive” for the digital asset.
Any “dips are for buying!
Ever since hitting its all-time high at $3.93 in early January 2018, XR price has been on a decline, putting in a new low. Last month, the digital asset went as low as $0.179 level. But looks like, the best performing asset of 2017 bull run is getting ready for a new bull run.
Trader XO also feels there is an uptrend coming as he said, “Wouldn’t short this,” which means any “dips are for buying!”
Previously, he shared a chart portraying a Wycoff method according to which XRP could have experience spring with another lower leg before taking off but it looks like the digital asset is skipping it this time and had enough of the losses.
Meanwhile, the XRP community is also enjoying the amount of traction XRP is seeing in Mexico, the Philippines, and Australia, where Biso, MoneyGram, and other partners of Ripple are facilitating cheap and fast cross border payments via the digital asset.
XRP will become a better store of value than Bitcoin.
Another positive news doing the rounds is an official document of the partnership between Indian bank Federal Bank and Ripple.
Dated March 2019, the document states the reason for the partnership, “accelerate cross border remittances.” This partnership, Federal Bank said would help it explore new corridors where Ripple is “aggressively pursuing new partnerships.”
Days after Poloniex announced it was going to delist Digibyte (DGB) following its founder’s criticism of of TRON’s Justin Sun as well as Binance, the crypto is still tradable in the crypto exchange platform.
According to Beincrypto, Poloniex had announced its intention to buy Tron but later removed the announcement from its Twitter account. The crypto exchange firm had stated that it was going to delist Digibyte from its platform but its now eight days later since their announcement and nothing has changed.
Rudy Bouwman, Digibyte Foundation vice chair, asked Poloniex to clarify the issue in a tweet account. Rudy also indicated that Digibyte was ranked 15th on the exchange on the basis of trading volume.
Poloniex did not give a substantive reason as to why it was planning to delist Digibyte only saying that the crypto does not meet its listing standards. In addition, the crypto exchange platform did not reveal it listing standards and why Digibyte did not meet them. The exchange has also failed to give any update on the matter after the delisting announcement. This has led to speculations that it is a punishment for the crypto’s founder criticizing Sun.
The delisting announcement has led to massive transfer of DGB assets from Poloniex. Recently, more than 100m DGB coins have been drawn from Poloniex. Despite the mass exodus, about 500m DGB coins still remain in Poloniex’s wallets. Majority of people within Digibyte community are urging more users to transfer their funds from Poloniex and make the exchange suffer more than the users.
Some DGB users and holders have expressed concerns that coins stored in Poloniex may be subjected to freezes or manipulation leading to future problems. To avoid this, the users are urging for quick withdrawals and transfer to other exchanges.
To date, Poloniex has remained silent on the issue after it issued the threats last week. It is anticipated that DGB could be delisted before the end of the year. However, their silence could be taken as a sign that they are rethinking their earlier announcement.
Decentralized finance (DeFi) apps are getting pretty popular these days and you can see that from the amount of Ethereum these apps are using. This week, the amount of ETH used reached an all-time high of $2.36 million ETH, around USD 420 million.
With the use of DeFi apps, you can lend money, borrow it or make several investments. Most of the time, for this to happen securely, the money needs to be locked up as collateral and this is why the number of ETH being locked in these apps is so high at the moment.
Smart contracts are generally used to only release the money at an appropriate time, so this means that nobody will lose out unfairly. The only issue is that by locking up that much ETH, the supply is considerably reduced. This means that the success of the app affects the network.
The effect is not 100% clear, however. Some people argue that reducing the supplies can push prices up, but others disagree with this and believe that volatility can go up and down.
From all these apps, MakerDAO is possibly the most famous. The stablecoin locks ETH to keep its price stable and this has worked out so far, despite how the ecosystem had to hike several fees at the beginning of the year, due to issues.
In MakerDAO alone, the amount of ETH locked went from $14 million only two months ago to around USD 25 million now. It seems that the DeFi segment is about to grow even more, especially if it depends on popular projects such as MakerDAO.
Bitcoin price rises from $7,400 to over $10,000 BTC/USD briefly
exactly 200 days before the bitcoin mining halving
Last Week Today: Recap of the Top Bitcoin News Stories in the Past Few Days
The price of Bitcoin was under $7,500 USD less than 24 hours ago and has now soared over 30% to rise above $10,000 in the past 10 hours.
Now, there are so many things to talk about in this bitcoin price analysis and the greater cryptocurrency market, which rose from $205 billion to $261 billion in the past day.
Below we are going to cover the latest bitcoin news event in our signature ‘last week today’ crypto headline updates.
But before we do, many are weighing back in on the bitcoin price prediction of $16,000 by October 2019 after a previous 4chan’er successfully predicted bitcoin’s bear market current low in December 2015 of $3,131 BTC/USD and then got the April 2019 forecast of $5,300 as well as July 2019 of over $9,000. And now with just under one week left before the halloween month, Bitcoin has surged nearly $2,000 in a matter of half a day’s time.
And another interesting headline circulating the crypto twitter community is this:
Many what if’s are circulating about this trending storyline but the crypto community will always remain bullish when intriguing topics of interest are start to pop up as the permabulls await their second big wave of sunshine on the leading cryptoasset in the industry.
There’s so much more to add, from Bakkt updates to Tom Lee sharing more stats:
+12% rally in #Bitcoin coinciding with strong equity day as S&P 500 nearing all-time highs…
– a reminder of the ‘unpopular’ opinion that the bitcoin performs best when S&P 500 rallies.
– best years Bitcoin when S&P 500 return >15%.$BTC mostly retail, thus, mostly ‘risk-on’
Between Mark Zuckerberg appearing in front of Congress to talk Libra crypto project or the president of China Xi Jinping declaring the desire to seize the opportunity of blockchain technology, let’s take a look at the latest news we published about bitcoin’s price rally as well as the bitcoin mining halving countdown timer:
Latest Bitcoin Price News and Crypto Market Updates
Now let’s get into #LastWeekToday and recap what exactly happened in the past week in cryptoland and see how we arrived at today’s $2,000 price jump that is bringing all the bitcoiners to the school yard.
Last Week Today: Bitcoin and Crypto Weekly Digest
Let’s review all of the main stories of the latest crypto news from October 16-23, 2019:
18 million milestone a timely reminder of Bitcoin’s scarcity
Bitcoin blockchain transparency helps authorities bust dark web website
Undeterred by recent desertions, Facebook drafts Libra charter
New HTC Exodus blockchain phone can run a Bitcoin full node
Only 3 Million Bitcoins Left to be Mined, or 300 trillion satoshis!
To cap off a week of escalating fiat crises across major economies caused by inflation, Bitcoin scaled another aptly timed milestone last Friday as the 18 millionth bitcoin was mined, leaving just 3 million bitcoins to be mined over the next 120 years.
In a little over six months, the issuance of bitcoins as mining reward will be halved from 12.5 bitcoins to 6.25 bitcoins, reducing the daily supply from approximately 1800 bitcoins to 900 bitcoins and weekly supply from roughly 12600 bitcoins to 6300 bitcoins.
If you’re wondering about why the figures are approximate, it’s because block generation lacks hard-coded temporal constancy. It is a Poisson process, meaning that, simply put, the discovery of each block is an independent event unrelated to the previous or the next block.
Bitcoin bulls on social media have been referring to the upcoming halving as “the most dramatic in Bitcoin’s history”, citing the value of coins in dollars that will be pulled from daily supply, but this line of reasoning is flawed and misleading.
Bitcoin’s price during the 2012 halving was $12, which meant that despite a reduction of 3600 bitcoins in daily supply, only $43,200 in dollar value was made scarce. During the 2016 halving, Bitcoin’s price was $650, meaning that with a daily supply reduction of 1800 bitcoins, nearly $1.2 million was pulled from daily supply.
Each successive halving in fact reduces new supply by fewer bitcoins. The most dramatic thing about this halving is that it will reduce the daily supply to merely 900 bitcoins, which is a significant scarcity from a daily supply of 7200 bitcoins before the 2012 halving.
But for those who still want to swear by the most dramatic halving in terms of dollar valuation of Bitcoin, rest assured that the next halving on 2024 will reduce the supply by many more millions, if not billions, worth of… 3.125 bitcoins!
A couple of other talking points emerged from this latest spotlight on Bitcoin’s scarcity – Could deflationary money actually work in the long run? Is the reduction of mining reward a disincentive for miners to keep going without better fee compensation?
Big Four accounting firm Ernst & Young’s global innovation leader, Paul Brody drew upon the economic history of deflationary models to dismiss Bitcoin’s practicability as money, citing in particular The Great Depression which was exacerbated by the gold standard,
“If bitcoin were to become a substantial part of the global monetary system, we would need to address [the hard supply cap] because a lot of economists agree deflationary systems are not necessarily the best thing.”
This prompted discussions in the crypto universe, with some suggesting that the cap could be changed if deemed necessary. The argument regarding incentivizing the miners is very much tied into the discussion regarding Bitcoin’s disinflationary model.
Let’s first expose the folly of gold standard comparisons by so-called economists. The key selling point of Bitcoin, unlike gold, is that it is infinitely divisible and that makes Bitcoin infinitely more practical as money than gold. Sure, there’s only 3 million bitcoins left to mine but that’s 300 trillion satoshis!
Over the next 120 years, even as mining reward keeps halving, the actual value of bitcoins gleaned as reward is likely to appreciate, just as it has done over the last 10 years. When the reward drops to zero in 2140, it is just as likely that fee-based incentives are sufficient to make mining a profitable endeavour.
Bitcoin’s transparency exposes South Korean Criminal
When a criminal uses cash, nobody hears a thing and as a result, nobody talks about it. But when a criminal uses bitcoins, the cheap rags start circling the story to lazily associate bitcoins with criminal activities and pander to the establishment.
Bloomberg reported last week that a US and South Korean authorities busted one of the largest darknet markets for child pornography, a crime that is “proliferating at a furious pace with the rise of cryptocurrency.”
A 23-year-old South Korean citizen, Jong Woo Son, owner of a child porn website named Welcome to Video (WTV) was charged by a US federal grand jury and convicted in a South Korean court and held in custody in the country.
The darknet website is said to have attracted 337 registered users from 11 different countries including, shockingly, law enforcement officers from the US. 92 individuals in the US were nabbed by authorities and 23 minor victims from the US, Spain and the UK were rescued.
By using KYC forms submitted to exchanges and tracing the flow of funds on the blockchain using blockchain analytics firm Chainalysis’ Reactor software, law enforcement was able to link all the offenders’ addresses to the darknet website.
U.S. Attorney for the District of Columbia, Jessie K. Liu delivered a scorching warning to offenders, “Our message for those who produce, distribute and receive child pornography is clear: you may try to hide behind technology, but we will find you, and we will arrest and prosecute you.”
What she failed to mention though was that the finding, arresting and prosecuting of these offenders would be impossible without the transparency afforded by the very same technology.
Facebook and friends plough on with Libra in forlorn hope
Sometimes, you almost feel sorry for Libra. Just when they thought things couldn’t get any worse after the calamitous departures from a couple of weeks ago, on the day of the inaugural Libra Association meeting, another member abandoned ship.
What was to be a 22-member meeting became a 21-member meeting, as travel aggregator Booking Holdings dropped out from the project. The company’s CEO Glenn Fogel said that they wanted no part of the controversy that’s developing around Libra.
At the meeting, the group elected its board of directors – a five-person board headed by Calibra CEO David Marcus and comprising four other executives from Kiva, Andreessen Horowitz, Xapo and PayU. An executive team was also appointed at the meeting.
The Libra Association issued a statement after the meeting, assuring to placate regulators around the world before launching the coin, “We are committed to building a better payment network. As an association, members will continue critical work with applicable regulators around the world, begin the important process of standing up a governance and policy structure and create a transparent membership criteria and admissions process.”
On Monday, in a development which highlighted Facebook’s desperation, Marcus was quoted by Reuters as having told bankers that Libra would be open to changing the structure of Libra by pegging the stablecoin to individual sovereign currencies, rather than a basket of currencies, “Instead of having a synthetic unit … we could have a series of stablecoins, a dollar stablecoin, a euro stablecoin, a sterling pound stable coin, etc.”
At a hearing before the House Financial Services Committee on Wednesday, Facebook co-founder Mark Zuckerberg was grilled on a variety of controversies regarding the social network, including Libra.
After reiterating that Facebook would not launch Libra without regulatory approval, Zuckerberg added that the company would leave the association if the other members decided to launch regardless of approval.
Zuckerberg also made it clear that the company had no intention of creating something that’s unregulated or decentralized, which makes us wonder why they decided to resort to blockchain buzzwords or even call that darned thing a cryptocurrency.
HTC unveils affordable successor to Exodus blockchain phone
Taiwanese smartphone maker HTC last Friday released a new blockchain phone, Exodus 1s. Further to housing a hardware wallet similar to its popular predecessor, Exodus 1, the new iteration is also capable of running a Bitcoin full node.
Being able to run a full node on a device housing the wallet is an added layer of security for users reluctant to trust third party wallet servers to interact with the blockchain. The device comes at a very attractive price of just $240.
Despite the advantage of being able to run a full node, Exodus 1s is unlikely to be popular as a primary smartphone with its underwhelming specs. The device runs Android Oreo on a Snapdragon 435 SoC, has a 5’7″ HD display, 13 MP front and back cameras and is powered by a 3075 mAh battery.
Those specs are outdated by at least 2 years, but regardless of the poor specs, Exodus 1s offers a lot of a niche audience by combining as a smartphone, hardware wallet and a Bitcoin full node, which makes it an attractive for its price.
However, with an internal memory of just 64 GB, to function as a full node the device requires the addition of a memory card since the Bitcoin blockchain’s size is currently 260 GB. HTC’s chief decentralized officer, Phil Chen was optimistic that the device will help the company stand out in a sluggish smartphone market rife with stodgy fare with little innovation,
“The Exodus 1 is still available and is hitting our internal targets. We’ve been delighted with the response. Exodus 1s is a completely different device. It allows you to relay transactions, confirm transactions and validate transactions. Crypto technology is the next frontier of smartphone innovation. For the smartphone category to grow again, we need more adoption of crypto phones.”
HTC may be way ahead of the market with their blockchain smartphones but by being the first to test the waters with the co-option of smartphones as a key interface for the digital economy, they’ve afforded themselves the crucial first mover advantage for this market, just like Apple did a decade ago with iPhones.
Bitcoin Price Analysis: BTC/USD Trading Insights
No surprises there then. Another CME monthly futures close, another flash crash for BTC/USD.
After closing last week at 8235, the pair struggled to hold the level leading up to Friday, when the October futures are settled and predictably broke down from key support at 7750 to fill the futures gap from May.
Having now filled that gap, we’re at a knick point. It’s now make or break as a further move down could be pretty disastrous and would seem unreasonable six months out from the next halving.
The only thing that matters on the daily chart is that we’re precariously close to a death cross, an event that’s certain to spook bullish traders into capitulation and with good reason.
The 50/200 death cross is historically one of the most trusted indicators of trend shift and has an accuracy of 79%, meaning that it precedes a shift to downtrend on roughly four out of five occasions of the cross occurring.
But there’s some solace that having filled the long-standing futures gap and with indicators showing oversold, such as slow K descending to extreme oversold territory, we may still see a recovery to prevent the death cross.
At the time of writing, BTC/USD is showing some signs of a quick recovery but before we can say that the pair is truly out of the woods and clear of a potential bear trend, the price needs to cross back above the 200-day average at 8900 and re-assert its bullish momentum.
Things are also at a fairly critical juncture in the weekly chart and the close next Sunday could be important in determining if there is a primary trend shift.
Receding ADX indicates that the momentum from the flash crash is relenting, and a bearish DI crossover hinges on this week’s close. As does RSI keeping above bull-cycle low of 40.
BSV, BCH and LINK were the best performers among leading altcoins last week for BTC pairs. ETH and XRP posted marginal gains before slipping to 0.021 BTC and 3500 sats respectively. After briefly dropping to under 65%, Bitcoin recovered to assert a market dominance of 66.3%.
Latest Bitcoin Price News and Crypto Market Updates
Bitcoin might have dropped more than 20% in less than 7 days but these day-to-day fluctuations shouldn’t deter the investors, said hedge fund veteran Mark Yusko on Thursday.
Speaking with CNBC in an interview, Yusko compared Bitcoin’s a decade old history to that of Amazon (AMZN).
While talking about Bitcoin price, that dropped below $7,800 on Sept. 26, with “Fast Money” host Melissa Lee, he said BTC is a buy opportunity.
“All the indicators of the network and the network value are rising; the price of any asset fluctuates,” he explained.
This year not only the price surged over 200% before taking a hit, other fundamentals like hash rate, wallet numbers, and transaction volume, have also been on an upward trajectory.
“Buy it,” said Yusko as the daily price “doesn’t matter.”
He further said the user base of the leading cryptocurrency has grown during these last 10 years. Although, he agrees that the network is still small.
He then compared the cryptocurrency to Amazon, saying: “the price of any asset fluctuates.” Selling Bitcoin now would be like selling Amazon shares, meaning not a smart thing to do.
“In every year, including this year, it’s had a double-digit drawdown. The average peak-to-trough: 31%, twice 90%. When was the right time to sell? Never,” he said.
Earlier this year, Yusko said the cryptocurrency would hit $30,000 before making the next major pullback. “We are in the next parabolic move,” he said at that time when BTC was around $12,000. Bitcoin would rally when S&P 500 hits a new high.
Bitcoin price has lost more than 23% of its value in the last 5 days, as it crashed from about $10,100 on Sept. 23 to $7,733, today’s lowest point.
Every other day we have been breaking a new level, on this basis before this week is over we would be in the $4,000 price range. And this BTC crash has brought about those bears back on the CT.
First, gold proponent Peter Schiff took to Twitter to share his two bits about Bitcoin which he believes would go to $4,000 or lower.
“Bitcoin has finally broken below the support line of the large descending triangle it has been carving out for months. This is a very bearish technical pattern, and it confirms that a major top has been established,” said Schiff.
“The risk is high for a rapid decent down to $4,000 or lower!” he added.
Schiff’s bearish statement about BTC price propelled Tone Vays, a New York-based cryptocurrency analyst and blockchain consultant, to share his beloved BTC price prediction.
Agreeing with Schiff, he said, “once it finds a bottom: above, at or below $4k, I will be going ALL IN on BTC w/ whatever I can sell that’s not nailed down!”
You might think that’s a bold prediction. Umm, No! It’s not. Vays’ previous prediction before BTC broke all records and surged 200% in 2019 was $1,200. Back in December 2018, when BTC hit its bottom at $3,200, Vays said BTC would trade at $1,200 for over a year.
Well, we all know how that went. At the time of writing, Bitcoin has been trading at $7,879 with 24 hours loss of 5.45 percent. Now it’s to be seen how low we would actually hit this time before BTC flies high yet again.
This week has seen one of the worst-performing days of 2019 for the cryptocurrency market, as digital assets experience a massive sell-off of over $30 billion, with major coins like Bitcoin plummeting by more than $1,000 before stabilizing at $8,300, shedding 17% of its initial value this week.
Along with this backwards slide for Bitcoin, significant coins like Ethereum and Litecoin also saw losses of more than 15% and 20% respectively before bouncing back at what is beginning to look like their new support levels.
Does this descending triangle come as a surprise? Not according to Goldburg’s Peter Schiff, who sees the reversal as being in the making for some time. And spells a broader, and more unfortunate correction by a further 50% for Bitcoin and others:
“Bitcoin has finally broken below the support line of the large descending triangle it has been carving out for months. This is a very a bearish technical pattern, and it confirms that a major top has been established. The risk is high for rapid descent down to $4,000 or lower!”
One of the interesting points from this week is that XRP experienced a massive dip in liquidity as more than 250m XRP were moved from anonymous wallets, according to Whale Alert.
Meanwhile Tether actually successfully overtook Bitcoin Cash during the tumult, making it the 4th largest cryptocurrency, and the largest stablecoin.
Crypto Futures Responsible for Drop?
So what can we attribute this bearish descent to, exactly? Investors have pointed to the recent launch of Bakkt’s Bitcoin futures contracts for institutional investors. To the outside observer, these developments would seem divorced from one another.
That is, of course, until you look back at the kind of reversal experienced by the crypto market after the introduction of futures to the Chicago Exchange in November 2017.
This mixture of speculative futures trading, along with Bakkt’s unfortunately lackadaisical performance over this week has, therefore, if this theory is to be believed, undermined confidence in cryptos and contributed to this sell-off.
To attribute this to just one factor would be a little irresponsible, however. As Schiff argued, Bitcoin, among other cryptocurrencies, has been trading sideways for a matter of weeks and may have been due for a correction.
This position is substantiated by other arguments made that Bitcoin’s positions are ‘overbought,’ making a correction inevitable.
Doom and Gloom? Or Rays of Sunshine?
While Schiff is adamant about the trajectory of Bitcoin in the coming months, opinions are much more scattershot about where it, and the crypto market, are heading.
The more unpopular of these opinions come from Fundstrat, which concludes that Bitcoin won’t be breaking a new high until you see the same from the S&P 500 – the USA’s industrial index.
Unpopular opinion, Bitcoin won’t make a new high until S&P 500 makes a new high.
– $BTC has been rangebound because macro trendless. Confirmed by our Bitcoin Misery Index falling from 66 (50 now)
More optimistic investors like Clem Chambers of Intelligent Investing, for example, who believe that the ongoing trade war between the US and China, will mean ‘good news’ for long-term HODL-ers.
Time will tell if this turns out to be accurate, however, as Chambers concedes.
“This is only a theory, but if it is correct, bitcoin will either rally vertically if no news breaks or the news will appear very soon. This is being written at 12 p.m. GMT September 25 and the news ought to be out there by no later than the end of the week.”
The Ethereum network is too clogged these days. This one of the most unfortunate side-effects of creating a successful network. As time passes, they tend to become too clogged and slow for their own good and people start to abandon them. This will not happen to Ethereum, though, if the devs have any say on it.
Several developers, including Vitalik Buterin, the co-founder of Ethereum, have recently claimed that there are people testing new ways to reduce transaction fees and increase the performance of the ETH network.
Now, some of the developers are considering to shift to 10 million gas (the token that is paid for performing operations in the network), which would increase the capacity of the whole network by 25%.
One of the main reasons why the network is so expensive and slow right now is because the popular Tether stablecoin has decided to launch Ethereum-based tokens. As they work on top of the Ethereum network, they make it harder for people to use Ethereum because several transactions are being made with the newly-created assets.
The impact on prices was so big that people went from paying around $0.11 USD per transaction to $0.39 USD, over three times more than that. Transactions are so important because all Ethereum-based apps need to pay them to work properly.
Initially, these changes impacted the price of the token, which went up but started to go down soon afterward, as the price of BTC lowered and took the whole market together.
The introduction of BakktWarehouse comes as the firm is poised to launch Bitcoin daily as well as monthly futures later this month within the US. according to the company, the futures platform will allow two forms of physical BTC futures that will have end-to-end regulated markets as well as custody.
According to the Cointelegraph report, the futures platform by Bakkt will be the inaugural platform that provides physical Bitcoin futures, this will depend on whether the launch will be a success. Compared with the already available cash settled Bitcoin futures that are provided by the Chicago Board Options Exchange well as the Chicago Mercantile Exchange, the Bakkt backed platform will allow traders to get payment in the form of Bitcoin after the expiry of the futures contract.
After the roll out of the futures platform, the trading part will be handled by Bakkt’s parent corporation, the Intercontinental Exchange (ICE), however, the clearing part will be handled by ICE Clear.
According to Bakkt, the custody of the funds will be handled by its sister firm Bakkt Trust Company that was recently awarded a charter to store customer crypto funds by the New York State Department of Financial Services. The idea is to let Bakkt Warehouse to move Bitcoin at small to long positions after the expiry of the contract, this will allow the platform to deliver Bitcoin to the users.
A forum post from the early days of Bitcoin is going viral on Crypto Twitter.
The post was from Harold Thomas Finney, who was an early Bitcoin contributor and also the one who received the first bitcoin transaction from Satoshi Nakamoto, pseudonymous and mysterious creator of the Bitcoin software.
A cypherpunk, Finney had said at that time that the problems of loss of privacy, more centralization, and creeping computerization can be targeted by using the computer as a tool to
“liberate and protect people, rather than to control them.”
In his post from January 10, 2009, he talked about how interesting the bitcoin system is in the way that it can be configured to allow only a certain maximum number of coins to be ever generated.
The idea he said is that the amount of work needed to generate a new coin will become more difficult as time goes on.
However, the immediate problem with bitcoin as is with any new currency is how to value it, he contemplated.
“Even ignoring the practical problem that virtually no one will accept it at first, there is still a difficulty in coming up with a reasonable argument in favor of a particular non-zero value for the coins,”
Here, he makes an “amusing thought experiment,”
“Imagine that Bitcoin is successful and becomes the dominant payment system in use throughout the world. Then the total value of the currency should be equal to the total value of all the wealth in the world.”
As per this, he puts the value of one Bitcoin at $10 million.
And this was about a week after the genesis block on January 3rd, 2009.
The value was calculated on the basis of total worldwide household wealth estimated to be in the range of $100 trillion to $300 trillion at that time.
“So the possibility of generating coins today with a few cents of compute time may be quite a good bet, With a payoff of something like 100 million to 1! Even if the odds of Bitcoin succeeding to this degree are slim, are they really 100 million to one against? Something to think about…”