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What will recession do to bitcoin? We analyze the Pros and Cons

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What will recession do to bitcoin?

There is a sense that we are heading toward a global economic slowdown. Some say, we will experience a mild recession in 2020 while others think this will be as big as 2008. That prompts an underlying question that many crypto lovers ask:
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What happens to bitcoin when a recession hits?

Will bitcoin survive a financial recession?

Will recession kill bitcoin?

What happens to bitcoin price if a recession hits?

If someone says they have an affirmative answer to these questions, they are just playing you for your money because no one knows for sure. However, we can look at the common market patterns and experiences we have gone through since bitcoin’s inception to draw probabilities that might help.

Let’s break it down in simplistic terms.  

Topics discussed under the Green category below are all in favor of bitcoin performing well in the event of a recession and topics in Red are the ones that may work against bitcoin.

Green: Bitcoin is still a nascent technology

In the world of progress and adoption, bitcoin is still in its infancy.  This means two things:

  • People do not know whether they can truly trust it or not
  • It has wild upside potential

To address the first point, bitcoin only has 35 million wallets as of 2019. 35 million represents 0.00897435% of 3.9 billion individuals with internet access. To reiterate, that’s 1% of 1%.

Pie Chart showing Bitcoin wallets across the globe

When thinking about blockchain and bitcoin, we have to think past people with bank access and people without it because blockchain promises to wipe out that difference. So for our purposes, we have to consider every single internet user as a potential bitcoin user of the future.

As I said at the beginning, we haven’t even started our journey when it comes to bitcoin and Cryptocurrencies.

From a potential perspective, we are yet to see a 1000+ fold in potential adoption. This sentiment is supported by Clem Chambers’statement“the whole cryptocurrency space is still only the size of a single Nasdaq blue chip, so there is a long way to go yet.”

Just to reiterate that statement, the whole cryptocurrency space is at a size of single Nasdaq blue chip company; One company. What happens when bitcoin alone reaches the market cap of Amazon?

Red: This 1000 fold potential also indicates ignorance among the masses

Bitcoin awarenessWhat is not even adopted by 1% can be easily forgotten or ignored by 99%.

During the period of a recession, people don’t think about HODLing or a bright technological future or a decentralized utopia; they think about keeping a roof over their heads, food on the plate, and safety & wellbeing of their loved ones.

This means we may even lose some early adopters and speculators in the 35 million list to the real FUD that the recession could induce.

A recession could mask the rational judgment of the pragmatic amongst us. This will be truer in case of those who flocked to bitcoin in the hopes of becoming millionaires overnight. They will be the first one to be scared out of bitcoin when the market goes to dumps during the recession.

These sellouts will cause mass hysteria and panic, which will further worsen the situation before the true visionaries and those with a long-term mindset endure the turbulent waters of a recession.

Green: Failing fiat systems could fuel bitcoin adoption

InflationBitcoin traded at a premium of 40% in Venezuela and 40% in South Africa and at a similar premium in Argentina. What is the common factor underlying these countries?  

Inflation. Failing fiat.

When inflation rises to uncontrollable levels, people hesitate to buy gold because it is easy to steal, difficult to carry around, and needs to be converted to fiat to spend. As a result of these inherent issues, some people have been turning to bitcoin, which is safe to hide with private keys, easy to move, and has been steadily increasing in value, much better than gold.

The U.S. National Debt has reached a whopping 22 Trillion dollars. Printing money to pay off this debt will simply not work, anymore.

When people realize that Russia, China, and North Korea are accumulating bitcoin alongside gold to back their fiat, and that the U.S. is sinking under the weight of its own debt, it will be difficult to trust the fiat that is backed by the big nothing.

This realization could work in bitcoin’s favor since it is the only currency with worldwide recognition and absolute zero need to rely on one authority or the other.

Red: USD reemerges as the world currency in case of a war, recession, or depression

According to some theories, whenthe USD weakens, there will be a recession or a war, and sometimes both.

This forces the nations around the world to put their faith behind the Green almighty. The U.S. invests in its national security heavily and does not shy away to showcase its power once in a while to keep the place of its U.S. Dollar intact.

In the event of a recession, the 99% we talked about earlier will be laboring for dollars. Since a recession marks pay cuts, job cuts, and an inherent shortage of fiat dollars in the hands of common households, the U.S. dollar quickly becomes the safe haven again to survive.

This scenario could work against bitcoin.

Green: Logistics issues around gold could prompt a bitcoin rally

Gold vs Bitcoin

Every time we talk about bitcoin in the context of the store of value, we inevitably compare it with gold. Most people in the current workforce or those who are just venturing into the workforce may not know that the U.S. Government at one point outlawed gold.

During the FDR era, gold was outlawed overnight, and people were forced to surrender their gold to the government.

Even when gold is legal, there are numerous restrictions on moving physical gold. First of all, it is a metal; that means it is heavy to move anywhere. If you move gold to another jurisdiction in substantial quantity, you will probably have to disclose it to the customs and may invite unwarranted attention from every single federal agency.

Moving 1000 grams of gold worth $45,000 (June 2019) will bring a lot of attention, and even if you succeed in moving it, how are you going to liquidate it safely?

To move $45,000 worth of bitcoin will take nothing more than a piece of paper with private keys or your phone with a secure wallet, with zero interference from any outside force.

Many outlets are springing across the globe that either accept bitcoin directly or convert it for you at competitive rates to any fiat you desire, to the fraction you need.

This convenience could slowly gain traction for bitcoin from gold aficionados.

Red: Gold has been in existence since the birth of the financial system

While logistics work in bitcoin’s favor, history favors gold because it is the oldest form of money known to man.

People trust gold because you can touch it, store it, and sell it when you need to. Gold has held its value steadily over the centuries.

Bitcoin, on the other hand, lives in the digital world and continues to swing up and down wildly; sometimes dipping 80%. This volatility has deterred many concerned investors from putting their faith in bitcoin.

Green: Bitcoin has been the best performing non-correlated asset, ever

Bitcoin’s performance over the last year (even during this crypto winter) or to that matter even close to a decade has been unmatched.  There is even a math around how if you were doing dollar-cost averaging irrespective of bull or bear markets, you would come out with a decent upper hand; we are talking double digit gains.

If bitcoin lives up to its non-correlated asset narrative, then theoretically, when the traditional markets sink and gold stabilizes, bitcoin should move in the opposite direction.  Even when everything comes back to normal and slow pace of normalcy is returned, bitcoin should perform on its own terms.

This independent movement may give bitcoin the needed attention during the time of recession and push it higher.

Red: Gold and USD are backed by trust of nations

Gold and US DOLLAR

While bitcoin is people’s currency, it is still in its first decade. That is infancy in the finance world. Gold and USD have been cornerstones of our financial system for the longest. Gold especially has been in use since humans evolved out of barter system.

The USD is backed by the great strength of American armed forces and hard work of the people that toil to earn their wages in dollars.

When a recession takes place, people are going to trust what they have accustomed to trust all their lives. They may not put faith in something that they hardly know about.

 

Green: All classes of people can participate with no minimums

Anyone can purchase bitcoin

Bitcoin is not controlled by governments or financial institutions. Anyone can invest in it, whether through an institution or buying it from other individuals who own it. Owing to the fact that there are no minimums, everyone gets a fair shot at investing in it.

In the traditional world, only super-wealthy or accredited investors get to invest in the ground floor of lucrative projects. Blockchain and cryptocurrencies are changing that unfair culture.

This means, there is a possibility that when fiat bubble bursts, people flock to bitcoin and a few handfuls of crypto projects.

Red: Highly manipulated space

cryptocurrency bitcoin manipulated spaceBecause there are little to no-restrictions (although this is quickly changing), many questionable practices are thriving in the crypto space.

The rumors around Tether pumping the prices of bitcoin to benefit its own wealthy customer base have made rounds in the crypto circles for some time.

Many exchanges have shut their doors and vanished with all the funds. Many people were scammed into investing in con projects using outright unethical marketing practices.

During a market panic, one such story of crypto scam could send the whole market tumbling down, taking bitcoin along with it.

Red: First recession may be the toughest for bitcoin

While bitcoin is used to facing volatility of 85% and yet continue to march on, an actual financial recession might put unprecedented stress on such a dip.

As bitcoin has never been through an actual recession, it could have a drastic negative impact, at least at the outset, on it.We wouldn’t be surprised if prices slash down to 80% from its peak.

This potentiality of the wild dump in case of a recession will force some blockchain companies to close their shops since they will not have the fluidity to run the business using crypto. This further increases the selling pressure in the market – lowering prices even further.

Green: First recession may be the last recession that bitcoin will ever face

After bitcoin goes through its first recession, the narrative around it being a non-correlated financial asset and a better store of value will catch on.  When this happens, bitcoin will steadily find its ground and will start its uptrend.

Unlike gold, bitcoin’s finite supply may help drive its price higher each year making it better than gold for those who are looking for a safety net that can withstand or beat inflation.

Green: Finite supply of bitcoin will help its value

Bitcoin’s finite supply and its halving event have always pumped the value of bitcoin. Now that more people are assigning a small portion of their portfolio into bitcoin and institutions are entering this space, the demand is constantly rising while the supply shrinks.

It is a simple economic principle. When demand is high and supply is limited, the market sets the price at a premium.

When this factor plays out, even during a recession, people will continue to put money into bitcoin to keep it afloat or thrive during the economic meltdown.

Red: A bitcoin alternative currency could kill the bitcoin mania

blockchain vanishAlthough a long shot, it is still in the realms of possibility that an alternative much better than bitcoin, both in terms of network strength and trust, could emerge that could send bitcoin to the dumpster.

Just to set the record straight, we are big fans of bitcoin. However, when considering the pros and cons, we have to be ruthless about what factors could work against bitcoin.

MIT announced that it has developed a cryptocurrency that reduces data users to join the network and verify the transactions by 99%. Of course, new types of cryptocurrencies do not mean bitcoin is going to be made redundant tomorrow; however, it may drag its price down dramatically.

And if such innovation is announced during a recession by a reputed body (like MIT or Harvard or NYSE) – then that could hurt bitcoin really bad.

Conclusion

Based on all the factors discussed above, you can draw your conclusions and place your bets on the scenario you think will play out the most.

In our opinion, even with a temporary dump of bitcoin in the event of a recession, things should bounce back quickly to help bitcoin find its ground and get back on its uptrend.

Thank you for reading the article.
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About the author

RK Reddy holds two Masters degrees, one in Accounting and another in Business Administration with over 15 years of experience in the financial services industry.

RK Reddy is an ardent fan of Blockchain and Cryptocurrencies. You can see the excitement about this new blockchain technology in every article on Cryptotapas.com. Sometimes this excitement leads to an overly optimistic view. Guilty as charged. RK Reddy says what may seem like an ‘overly optimistic expectation’ today may become an everyday norm in 5-10 years; look at the history of cars or airplanes, Blockchain and Cryptocurrencies belong to a similar frame of reference.”  Of course, that is just his opinion.

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Devaluation of the US Dollar Could Decimate Savers! Strategies to Hedge Risk

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Devaluation of Currency

Devaluation of the US Dollar

Quiz: Will devaluation of the US dollar impact your financial life?
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What to expect in this article?

  • What is devaluation of currency
  • How devaluation of currency impacts us
  • Strategies to hedge against the currency devaluation

There is an apparent disconnect between Wall Street and Mainstreet.

This divide has not been as apparent and blatant as it has during this COVID crisis.  

As the number of unemployment claims are rising to levels never seen before, Wall Street is rallying at full swing.

In the middle of this disparity and economic unrest, some economists are warning us to brace yet another crisis called Devaluation of Currency.

What is devaluation of currency?

InflationDevaluation of currency is essentially reducing the value of currency.  

This can be done through:

  1. Printing more money:  When supply increases, price falls.  This simple economic principle applies to everything
  2. Policy makers decision:  Policy makers may decide to ‘devalue’ the currency to keep the country’s exports competitive.  The US is a heavy importer, so this strategy, if implemented, could hurt the US more than other countries
  3. Selling off reserves: A country could dispose its reserves that pegs the fiat and then set a new exchange rate for its own currency (the disposal of reserves to buy its own currency either by taking out of circulation or printing more)

Sometimes devaluation of currency is not voluntary.  

Look at countries like Argentina, Venezuela, etc., their currency devalued by multiple folds because their economy was deemed to be unsustainable.

Why devalue the currency?

Countries devalue their currency primarily for following reasons:

  • Exports

Let’s say if I export Saffron from India at 2 bottles per $1.  IF India devalues its currency by 50%, now I can get 4 Saffron bottles for $1.  

This drop in currency value encourages exports.

Countries like China, India and others who rely on exports (of goods and services) can reap greater economic benefit by devaluing its currency.

  • Trade Buffer

When a country notices that its imports far outweigh the exports, it can use the currency devaluation as a buffer measure to balance the trade equation.

Generally speaking, a weak currency encourages people to buy more from the nation (win for exports) and discourages people buying from outside the nation (a loss for imports).

  • Debt

Let’s say you owe me Indian Rupees 75,000, at the time of this writing, that would be around US$1000.  Let’s say, India devalues its currency to 50%.  

This means, I can still pay you back your Rs. 75,000 with $500.

While this strategy might not be great to service ‘outside’ debts that are denominated in foreign currency, it is a strategy used to service obligations within the country.

Devaluation of the USD in the wake of Yuan devaluation

The US is the number one importer in the world.  It ranks number two as an exporter.   

In theory, devaluation of its currency may help increase its export footprint.

However, due to recent devaluation of Chinese Yuan, the devaluation of the US dollar could work against the US, in the short term.

For one, devaluation of the US will simply equalize the impact of Chinese devaluation.  

Two, it will make the imports more expensive thus might encourage demand for home products thus reducing the reliance on Chinese imports in the first place.

In addition, as things become more expensive in dollar denomination consumer demand could see a sharp decline which will further slow down the economic recovery.

Why should I be worried about devaluation?

us dollar under threatAnyone holding their savings in the US dollars might have to pay attention to the possibility of devaluation of the US dollar.

If the US declares that it is devaluing its currency by 30% then your savings lose 30% value overnight.  

In reality, the fear might set into the market and crash the valuation even further.

For example, if you were planning to retire with your $100,000 savings and the government devalues the currency by 30%, all of a sudden your $100,000 will only buy you goods and services worth $70,000.

That is a huge blow for people who have meticulously planned the mileage of their savings.

Can the US devalue its currency?

In theory, yes.

The United States has adopted a Strong Dollar policy for over 3 decades now and this gives it the status of global reserve.

If President Trump were to shock the markets to make a mark in global trade, he could order to devalue the US dollar.

If we know anything about Trump, he is all about shocking the world.  So the realms of possibility of devaluing the US dollar are not out of the question.

Strategies to hedge against devaluation of currency

Lot of financial gurus and speculators are expecting the US government to use devaluation as a strategy to make good on its debt.

If this were to happen, you don’t want all of your life savings held up in the US dollar which could see a drop in its purchasing power.

Following assets have come to act as ‘hedge’ against any potential volatility in the US dollar value.

Real Estate

Real Estate cryptoWhile the market is currently hyped up in real estate, it still could offer a safe haven in the event of devaluation of USD.

For instance, if you bought a property for $200,000 today with a fixed interest rate, in the event the US dollar is devalued to say 30%, then someone coming into the market will have to pay $260,000. 

And because you have picked up the property for fixed interest, in theory, you could be paying lower interest compared to the rental costs in the post devaluation world.

This strategy may not work if the US undergoes a long recession as a result of devaluation and then falls into deflation (which will reverse the above strategy). 

Bitcoin

bitcoinMany financial veterans are turning to Bitcoin because of its deflationary supply and potential to change the financial markets forever.

Obviously, being a relatively new asset class, it is not a guaranteed safe-haven.  Although many believe Bitcoin to be Gold 2.0.

A small stake in Bitcoin could turn into ZERO or a 10x of investment.  No one knows which side the tide will turn.

Economic models based on demand and supply (and stock to flow ratio) suggest that Bitcoin has only one way to go: UP.   

Bitcoin has a history of proving economic models wrong and shocking the world. Will it go upward into millions or crash and burn into oblivion?  

Only time will tell.

Gold & Metals

Gold vs BitcoinWhile Bitcoin is considered money of the people and Gold has been regarded as the god’s money by Robert Kiyosaki. 

Silver is considered an underdog at this point.  

Between gold & silver, the metal duo has been long acting as a safe-haven for market volatilities.

Obviously, you cannot compare Gold and Silver trajectory to that of stock markets or bitcoin since these metals are designed to act as ‘hedge’ not as wealth multipliers.

Stocks

MarketIf looked at the stock market from a macro level, it has been on an upward trajectory, generally speaking.  

Even with the occasional recessions and rare depressions, Stock market has in general kept an upward trend from a macro perspective.

Within the stock market, there are some up and coming industries where the returns could be extraordinarily high, like for example:

Blockchain industry: Companies involved with blockchain space could see a great momentum in the coming decade.

Cannabis industry: Cannabis industry is slowly spreading its claws and becoming 

mainstream in the similar fashion how Liqor once did.

5G: Beyond the conspiracies surrounding 5G, we know that this is the next phase of the 

internet evolution and

BioTech: Whether it is advancing surgeries, or reversing age with stemcell inventions or 

simply decoding the DNA to make medicine more personal, BioTech is a place where the next level of innovation will take place. 

Artificial Intelligence: We are clubbing Augmented Reality, Artificial Intelligence into one basket and I think this space could hand out handsome returns.

Just because we do not invest in stocks doesn’t mean they are not a viable investment vehicle.  DYOR and see if you can find some gems.

Few things to remember

Do not over-correct

You do not want to find yourself in a situation where you invest 100% into any one type of asset and that asset tanks in value.

For instance, if you invest 100% of your fiat into Bitcoin, what happens if Bitcoin crashes?

If you invest 100% in real estate, what if we face deflation instead of inflation and the price tanks or paying mortgages becomes too expensive?  

You will then be forced to service a loan that might be higher than the rent you receive.

Point is, you want to hedge into different asset classes so that you are not putting all of your life savings in one type.

Safety net

Whether we face extreme inflation or deflation, we all need cash on hand to meet our daily needs.

You cannot easily sell your gold or real estate if you need cash flow. Bitcoin’s volatility makes it a bad choice to be looking to liquidate in the time of emergency.

You always want to keep a certain amount of money in liquid fiat to meet your immediate needs while you secure your financial future with an appropriate hedging model.

In conclusion

The topic of devaluation of currency is one that we all need to be at least aware of.  

Having an hedging plan to withstand any surprises introduced by market volatility is important so that you are not wiped away, financially speaking.

The above hedging tactics are based on what we are looking to do personally. We cannot tell you what to do.  

Thank you for reading and sharing this article. We appreciate you.

Thank you for reading and sharing this article. Stay safe and healthy!

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Is Elrond better than Ethereum? Should I invest?

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Elrond Token review

Elrond(ERD) Token Review

Would the modern magic of internet work if we were still using dial ups? If you are from the generation that doesn’t know what a dial up means, it looks like this:

AOL Dial Up Internet Connection Sound + You’ve Got Mail (America Online) 90’s

Take a walk down memory lane and listen to the AOL (America Online) Dial-up internet connection sound and the famous You’ve Got Mail. Subscribe to Adventures…

Essentially, it would take you 30 seconds to 3 minutes to connect to the internet and open a text email.

If you were to load the YouTube website at the 56kbps speeds (considered good in those early internet days), it would take you probably 20 minutes.

We tried to load YouTube at 56 kbps speeds and after 7 minutes we were still waiting for the page to load. Compare that to the broadband that loads YouTube in a split second.

You can test what it feels to browse at 56kbps here.

While it is quite an extreme and dramatic example, I think that is the closest you can come when you try to explain what Elrond is in comparison to Ethereum.

At its current state, Ethereum processes 15 transactions. Compare that to Elrond which processed 35000 transactions during the test net run.

Obviously, the test environment is different compared to the real world.

Ethereum 2.0 could solve some of Ethereum 1.0’s flaws with claims of 100,000 to Million TPS. That is something we have to wait and see.

OK, what is Elrond?

There have been at least 100 Ethereum killers on the market since the birth of Ethereum.  Ethereum (Classic) couldn’t kill Ethereum, so we are not sure others will.

What is Elrond

Ethereum currently has serious scalability and TPS issues. Listen to this clip where Vitalik admits that Ethereum 1.0 cannot scale.

No Title

ICO prospectus: “Build scalable apps on Ethereum.” Mod: “Youre saying the concept of launching something that doesn’t scale then rebuilding it as something thats scalable was part of initial the plan.”Lubin: “We knew it wasn’t going to be scalable for sure.”Vitalik: *nods* pic.twitter.com/MBSFkQeugj

Ethereum 2.0 could be a whole another story.  However, it is not a reality at the time of this writing.

Elrond on the other hand already delivers on what Ethereum 2.0 is ‘aiming’ to.

In a somewhat hyped elevator pitch, Beniamin Mincu, CEO of Elrond, said that Elrond is a 1000x improvement over other protocols in the blockchain space.

In a nutshell, Elrond offers a high throughput blockchain ecosystem that makes use of sharding that ‘scales’ (adapts) with the demand put on the network.

This adaptive sharding helps Elrond to be efficient, secure, scalable and provide a high rate of TPS.

This is why Elrond boasts itself as A highly scalable, fast, and secure blockchain platform built for internet scale.”

ERD Scaling

What makes Elrond Special?

The strength of Elrond, in our opinion, is not in its novel or groundbreaking innovation.

It is in the simplicity of picking the ‘best’ of all the blockchain protocols that preceded and only solve the issues that these protocols failed to solve.

For instance, Elrond picks sharding from Zilliqa but makes it ‘adaptive’.  It picks interoperability from Cosmos and implements it at Virtual Machine level.   

Elrond says it as much in its whitepaper: “Elrond was designed upon and inspired by the ideas from Ethereum, Omniledger, Zilliqa, Algorand and ChainSpace.”

If we are to compare blockchain revolution to the internet, we have to assume that many companies will be replaced by newer solutions. 

Whether Elrond is that ‘next generation’ blockchain or if it will be eaten away by another project is something we have to wait and see.

For now, let’s focus on what Elrond promises that makes it special.

“1000x improvement” over its predecessors

“Elrond is a new blockchain architecture that can bring 1000x cumulative improvement in scalability, throughput, transaction speed and transaction cost,” that is how Beniamin Mincu, CEO of Elrond, explains the project.  

Scaling

Elrond promises to be able to ‘adapt’ to the scaling needs of the network.  The project uses what is called ‘adaptive sharding’.

For the technically inclined, here an excerpt from the whitepaper:

“Elrond proposes a dynamically adaptive sharding mechanism that enables shard computation and reorganizing based on necessity and the number of active network nodes. The reassignment of nodes in the shards at the beginning of each epoch is progressive and nondeterministic, inducing no temporary liveness penalties.”

Sharding is the process of breaking down a big problem into small ones to solve it faster.

Security

Elrond uses a modified version of Algorand’s Secured Proof of Stake concept.

Secure Proof of Stake randomizes the ‘selection of a node’ so that security is not compromised through 51% brute force.

Elrond goes one step further on this sPoS model where it introduces ‘stake and rating’ criteria to be even eligible to be randomly picked as a node.

Adaptive sharding is the ability to scale up or down the number of shards depending on the transaction at hand.

Obviously, that is a dumbed down English explanation of it, as we understood it.

This makes selection of nodes ‘random’ while taking meritocracy into consideration.

The rating is dynamic and is recalculated at the end of each execution.

ERD Token

Many investors in the crypto space don’t care what the project does if the tokenomics are weak.

  • Transaction fees

Elrond’s utility is acting as the ‘native’ token on the network to pay for the transactions. The more transactions that take place on the network the more Elrond will gain in demand.

  • Staking

Elrond offers crazy returns on staking. This means, there is a probability that many tokens will be locked out of circulation which could boast the price.

  • DApp Deployment

Like any other blockchain network, Elrond token acts as the ‘utility’ on the DApps deployed on the network.

  • Validator reward

Validators are rewarded for their work and Elrond token is used in disbursing these rewards.

Team

Crypto space is excited about the team that is involved in the Elrond project.

Just looking at the profiles of CEO, COO and CIO showcases that you are not dealing with a group of wannabes.

Elrond Team

The team brings in the right mix of technical prowess and business acumen.

Many blockchain projects either lack a strong technical forte or suck at running the business.  Elrond may not have that problem due its ‘experience mix’.

Partnerships and Integrations

This is one project that is making a lot of buzz in the past two months, with continuous updates and partnerships. Here are a few:

ERD and Indacoin

ERD and Indacoin

Indacoin is a fiat gateway with over 500K users which allows users to buy crypto with Visa or Mastercard using USD, GBP, EUR and many other currencies.

ERD and dfinance

elrond and dfinance

Elrond will work together with dfinance to enable users to build Elrond native assets as well as allow Elrond users to access DeFi platforms on dfinance.

ERD and LDV

Elrond and EDV

ERD tokens are now available on LDV, a Romanian crypto exchange and a fiat gateway. ERD/EURO and RON/ERD pairs will be available on the platform.

ERD and Crypto.com

elrond and crypto.com

Users of Crypto.com can now buy ERD token on their app. Crypto.com is considered one of the easiest modes of buying and selling crypto. With deposits and withdrawals of erd token enabled on crypto.com, the token is now available for over 3 million users of crypto.com

ERD and Utrust

Elrond integrated with one of the leading payment gateway for ecommerce, Utrust.

ERD and Swipe

Swipe partnership elrond

ERD is partnered and now available on swipe, a multi currency digital wallet. Swipe has over 500K users.

The other partnerships and integrations include Stateless Money, Staked, Moonpay, FinNexus, and many others.

Elrond is gaining traction fast and furious. Will it amass enough steam to surpass other blockchain protocols?  

We have to let the time answer that question.

ERD Token Metrics

ERD Token Metrics

Source: Elrond

*These token metrics are about to change after the EGLD swap.

Some pump and dump chat

You will notice that Elrond is showcased on the Samsung official video introducing Samsung Blockchain.

Samsung Blockchain wallet elrond

First and foremost thing everyone is excited about is its mainnet launch. 

We believe the rise in price is not just because of its mainnet launch, but also the high staking rewards that are expected to yield after the mainnet launch. 

With over 5 Billion ERD tokens already staked during the testnet, it is possible that more users will stake their tokens for passive income.

Risk factors

Late to the party, not to the town!

There are a lot of blockchain platforms in the blockchain space. Many promise sun and the moon with 100K to a million transactions per second.  

Most of these promises are just that as of now, promises.

Elrond is late to this TPS race, however, it could do what others have failed: Actually live up to its claims on the Main net.

In this sense, Elrond is late to the TPS party but it is not late to ‘make a mark’ for itself in the blockchain town.

More advanced projects in the space

What happens when Ethereum addresses its TPS issues, scalability aspects and makes it incredibly easy for people to launch DApps?

Ethereum already has a massive penetration in the space that it could leverage.

Beyond Ethereum, there are other projects like Zilliqa that could pose stiff competition to projects like Elrond.

And, do not forget Cardano, a project that is preparing its arsenal for a hostile takeover of the crypto space.

What is a head in Elrond’s Roadmap

Elrond Roadmap

Source: Elrond

Elrond Swap

ERD to eGLD

With the launch of Elrond Mainnet, Elrond token (ERD) will be swapped for Elrond Gold (EGLD), at a 1000:1 ratio. Simply put if you hold 10,000 ERD tokens, it will be swapped into 10 EGLD. In terms of price, if the current price of one ERD is $0.024, the price of 1 EGLD (*1000ERD) will be $24.
Elrond has garnered quite a lot of buzz before the mainnet, now it all comes to how the project is going to progress beyond mainnet.

How to swap ERD

As per their official Telegram channel, exchanges are making preparations to support Elrond swap to Elrond Gold.  The tokens will be swapped in about 30-60 days and the ERD(ERC20, BEP2) will be replace with eGLD. Check with your exchange and look out for communication about the swap support. Till then, ERD trading will run as it is over the exchanges.

Pros of Elrond Token Swap

The swap is expected to reduce the current total volume of 21 Billion ERD tokens to 20 million eGLD and to 30 million over the next ten years which in theory should make the coins dearer.  How this will work in reality is something we have to wait and see. Case in point but in reverse is VeChain, which was trading at $9 before the swap at the ratio of 1:100 and the price dropped so low that it has not yet recovered.

Cons of Elrond Token Swap

In our opinion, it is easy for a coin to jump from 1 cent to 2 cents and 2 cents to 4 cents, however, there is a psychological barrier from investors to let a coin trading at $20 to move to $60. However, if you see from a percentage, the underlying gains are the same. 1 cent to 4 cents is a 400% jump, however, it will take a lot for a $20 to jump to $80. If Elrond proves its value in the blockchain space then the project may pump in spite of the denomination.
Thank you for reading and sharing this article. Stay safe and healthy!

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V-ID is bringing real world use case to Blockchain, can it succeed?

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Vidt Token review

VIDT Review, use cases, future prediction

What follows is the byproduct of our research on whether or not V-ID is a good project.  

We have a tendency to FOMO, so read everything with a grain of salt and always DYOR.

What is V-ID?

Anything digital can be altered. How then can you be confident about the authenticity of the digital files you are dealing with?

“V-ID is a blockchain powered document certification service. The VIDT API enables organisations to certify and secure their digital data against fraud and manipulation.”

You can tag digital files using V-ID and anyone around the world can verify its authenticity by simply using V-IDs free checker.

If any information is changed within the file, V-ID flags it.

This technology has an immediate use case in the real world to fight digital frauds. Especially in dealing with:

  • Invoices
  • Scientific papers
  • Contracts
  • Official documents
  • Diplomas/certificates
  • Data from Internet of Things

Watch this quick video to learn about V-ID.

Introduction to VIDT V-ID Blockchain Powered Validation

The V-ID validation service uses blockchain technology to end all document fraud. Our client base, with customers like Airbus Space & Defence, operates in va…

Take a simple example of purported crypto ‘recommendation reports’ that float on the internet. How do you know they are what subscribers were given?

How can you be sure that the document is not manipulated by someone to ‘alter the buy up to and sell at’ prices?

In this simple situation, using V-ID, one could verify the authenticity of the document.

In a world of Deep Fakes, a solution like V-ID can be a lifesaver.

How big is the problem that V-ID solves? 

According to the Javelin Strategy report, Identity fraud cost $16.8 Billion dollars in 2019 alone.  

Obviously this includes credit card and account takeover frauds. However, when a solution like V-ID becomes integrated, there is an opportunity to curb these identity thefts as well.

Fraud Detection and Prevention which was valued at $17.33 billion is expected to grow at an 18% (CAGR) rate from 2019 to 2025.

The more diverse our technology becomes with the advent of Internet of Things, Artificial Intelligence, Cloud Computing, Augmented Reality and reliance on smart mobile devices, the more we grow vulnerable to fraud.

In our opinion, the fraud space is only going to grow bigger and faster.  

V-ID has an opportunity to place itself as a reliable solution by leveraging the blockchain’s resilience.

VIDT Technology

Source: V-ID

Using V-ID

Any solution’s success will depend on its ‘ease-of-use’. We tested the V-ID ‘certification’ to get a taste of the platform.

When we scanned the QR code of the document, it took us straight to the document where we could easily verify that it was indeed ‘authentic’.

The ease at which you can verify someone’s credentials, certifications, diplomas, etc., is simply awesome.

Users can verify the authenticity of other documents through their free online checker. Obviously, the company has to be signed up with V-ID for the documents to be ‘stamped’ on blockchain.

V-ID promises verification in 5 seconds.  Here is a video that shows how the verification works.

VIDT V-ID verification live demo

The V-ID validation service uses blockchain technology to end all document fraud. Our client base, with customers like Airbus Space & Defence, operates in va…

All in all, the concept behind V-ID is quite simple and easy to use.  

This ease of use accompanied by an amazing use case is what forms the basis for blockchain’s adoption.  The tool makes you forget about the blockchain altogether.

Does V-ID need Blockchain?

Yes. We think V-ID has a blockchain use case.

When it comes to providing a hack-resistant environment and resiliency to the underlying system, blockchain really shines.

The V-ID makes use of blockchain the backend without inundating the end users with the intricacies of ‘how blockchain works’ is quite admirable.

“Currently V-ID offers anchoring in Ethereum, Bitcoin, IBM Hyperledger, Fantom, LTO Network, Digibyte and Binance Chain.” 

For V-ID, in our opinion, Blockchain is not just a fancy jargon to allure people to the project but rather it is a smart technology choice to meet the business objectives.

Team

Vidt Team

Source: VIDT

Marnix van den Berg, Founder & CEO, has over 17 years of experience.  He is supported by 3 other Founders on the project.

Pim Voets is the Founder and Lead Concept Design, Ceciel van Helden is the Founder and Lead Programmer, Wico van Helden is one of the Founder.  

The teams section of the website shows about 9 team members and 6 advisors, including Chris Robinson, Ex-CTO of American Express.  

Just between the 4 founding members have a combined experience of over 70 years. Wico van Helden has hands-on experience in taking a company IPO.

Progress, Case-studies and traction

V-ID has been associated with many brands.  They showcase few case studies on their website:

VIDT Case study

AMSPEC is using the V-ID technology to verify the authenticity of their inspection reports

How AmSpec protects data integrity with V-ID

Amspec has started to utilise V-ID blockchain validation technology to protect the authenticity of their inspection reports. This means that recipients of a …

V-ID made history by bringing 17th Century Rembrandt to the blockchain.  This verification was made possible with CMS Law acting as notary, collaboration with Duowes Fine Arts and V-ID.  

VIDT Rembrandt on chain – V-ID collaboration with Douwes Fine Art and CMS

For the first time, V-ID’s validation platform, known for securing digital files against manipulation, extends its activities into the physical world, by val…

V-ID is bringing certificates and diplomas onto the blockchain.  To this end V-ID has collaborated with NYENRODE and HBO Drechtsteden.

V-ID successfully installed the first IBM Watson-connected IOE sensor with V-ID data anchoring.  

IBM & V-ID install first IoE sensor on IBM NL headquarters’ roof

www.internetofenvironments.org

V-ID partners with Caltrix Consultancy to offer a tailored solution for any financial organisation to comply with KYC/AML challenges. 

LTO Network and V-ID entered into a partnership by rolling out an immediately applicable, GDPR-compliant blockchain solution for companies and governments. 

This alliance allows for any party to verify the authenticity of the diamond using the certificate, and the authenticity of the certificate using the V-ID service.

The brands with which V-ID has worked with and the diversity of the projects they have been involved in bring a lot of confidence in this project, in our opinion.

Price – Revenue Model

Companies need cash flow to sustain and grow. It is important to have a revenue plan for the company to thrive.

V-ID offers 3 different pricing options that you can see below.

VIDT Price chart

Euro 2 per file may seem like a big deal but companies have the option to use the verification only for sensitive documents.

For example, on invoices or contracts, to ensure authenticity.  

Challenges to consider

Icon Latest UpdatesOne of our favorite projects, ICON, also rolled out the Broof concept which helps organizations verify certification.

Blockchain projects, like ICON, with existing capabilities could potentially ‘extend’ their solutions in the verification arena.  This could pose stiff competition.

The verification problem is so big that it can accommodate more than one player, however, the more players you have the more it dilutes the upside potential.

What Blockchain identity verification will not solve!

Demand for counterfeits

When all is said and done, counterfeits exist because they have market demand.  Without demand a product doesn’t sustain long.

There are millions of people who want to experience luxury on budget, by choice or because of lack of choice.

The projects like V-ID cannot solve the counterfeit market for those who specifically seek them out.  

However, the project does solve the ‘authenticity assurance’ demand for people who are paying the full price for the genuine product.

Market for ‘copies’

Digital products have an amazing advantage which is its major flaw and that is: it can be replicated without much effort.

If someone is deliberately seeking out for a pirated copy of something, there is so little you can do.

VIDT, Coinmarketcap and where to buy and sell?

V-ID Blockchain has its own native crypto with ticker symbol: VIDT.

We have to specify this because there is another project on coinmarketcap with VID symbol and we had few folks who seemed to be confused.

At the time of this writing, VIDT was ranked at 224.

At this time, you can buy and sell VIDT at KuCoin.

In conclusion

Blockchain finds a great ‘real-life’ business use case in V-ID.  

The association of the project, even if indirectly, with big brands like IBM, AirBus and more is just a testament to the viability of this solution.

While it may be possible for other projects to try and emulate the V-ID solution, the focus and dedication of the V-ID team could put up a mighty fight, in our opinion.

Ultimately, the problem of fraud is quite big and could easily accommodate success of multiple players.

In the end, we are coming to the same opinion about V-ID that Chris Robinson, ex-CTO of American Express, did and that is “V-ID is a rare combination of 3 things — A great idea in a large and almost green space market. A company with a proven track record and real-world customers. And, finally, an exceptionally high quality team and advisors.

Thank you for reading and sharing this article. Stay safe and healthy!

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IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

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