cryptonomics

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Bubbles: Cryptocurrencies, Dotcom, Tulips, USD

There are a few things that we need to look at when comparing cryptocurrencies to bubbles. First, supply and demand. Second, the market. Third, value of money. The cryptocurrency bubble and the tulip bubble have some similarities, as well as some differences. When farmers see the price of crop A increasing dramatically, they have some choices. Ignore the price rise and continue to grow crop B, losing out on the potential gain in income, which some will do. This has no affect on crop A. If they are already growing crop A, then they will be able reinvest excess profits and grow more of their cash crop, crop A. This increases supply of crop A. If they are growing any other crop, and see a price rise in crop A, they will have an incentive to shift from their current crop at the end of the season, and grow a crop that will bring in more revenue (crop A). Increasing supply of crop A. However, increasing the supply of crop A won't happen over night, as crops take months to grow. As c...

Running on Scarcity: An Argument for Bitcoin and Finite Supply

A world that uses Bitcoin (or another scarce cryptocurrency) as a base currency could create a better, more innovative one. One could argue that the velocity of money is driven by the demand for luxury goods and services. On top of that, an economy is only as good as the labour within it. The money hoarder will exchange the hoarded currency if there is a good or service that he/she desires. If there is no desired good or service, then there is no reason that the money hoarder should put his/her money back into circulation. This will give the markets a reason to innovate and create demand for luxury goods and services. There will be less complacency in the markets as companies and industries compete for your money. A historical example of complacency is the Spaniards post colonization of America. After the Spaniards colonized the Americas, they inherited vast amounts of gold. What was once a scarce commodity was less scarce. Instead of boosting exports to create more wealth, S...

Bitcoin, Cryptos, and The Adjusted Monetary Base '94-'18

If you think cryptos are worthless the scary reality is that your dollar is also worthless. You should become a gold bug. The reason for your dollar being worthless is because it isn’t backed by anything aside from a government that is set on devaluing your dollar by setting an inflation target of two percent. Does anyone remember when you could pick up a candy bar for ~$0.50? Better days, right? Now a candy bar is ~$0.89. Prices are increasing while quality is flatlining. Shouldn't the cost of a candy bar decrease over time as innovation/competition enters the market? @chriscanno The answer is: yes. Innovation and competition should lower prices, but the central bank is set the hold the cost of goods at a certain price with their inflation target. What is happening is that The Federal Reserve is digitally pumping money into the system to keep prices lower. What gives precious metals value is scarcity. If we all have ten ounces of gold because someone can just 3D pri...

Numismatics: Fiats & Cryptos

The philosophical thought process behind currency has been around for centuries, and has continually evolved. Aristotle gave three functions of money: a means of exchange, measure of value, and a store of value for future transactions. Cryptocurrencies meet Aristotle's three functions of money, but there is still a link missing from this cryptocurrency chain. Averroes added a fourth: a reserve of purchasing power. Not only does money serve as a store of value, but money could be spent at any time without having the need to be sold. This is where cryptocurrencies fall short, and it seems that this could be one of the reasons that we see such sell offs in the cryptoverse. Cryptocurrencies have come a long way since their conception, and have done well (so far) under the 2017 lime light. In order for cryptocurrencies to reach the end goal of a being a true form of money, we will need to see adoption for payments receivable (such as retail) sector. Until then we will continue to ...

ICO, IPO-SHMYPO

In my unprofessional opinion, an ICO (Initial Coin Offering) will replace the IPO (Initial Public Offering) just like the Decentralized Exchanges (DEX) will replace current exchanges, and Atomic Swaps will be fluid in our daily transactions. This will take time, as regulation will be made, and our understanding of blockchain deepens. However, we already have had many ICOs, and we already have a few DEXs. An ICO should be looked at as an unregulated way for a firm in the crypto-space to raise money, and fund their project(s). It is a way for crypto-firms to bypass regulation and raise funds quickly, while jumping onto the cryptocurrency hype, so caution must be taken as most crypto-enthusiasts see ~90% of ICOs failing. In the ICO's current state, when you purchase a coin/token, you don't own a share of that firm. The firm isn't required to disclose information as they would after an IPO. However, if there is a lot of buzz around said firm, their token value theoreti...

BitcoinCryptocurrencyBitcoin

I have been coming across some interesting readings; from the recent way to breed digital kitties on Ethereum to a pretty interesting piece from Hackernoon, " Bitcoin's Final Boss ". So, the Ethereum network has been congested again. This time it isn't being congested by ICOs, instead, Digital Kittens ( Cryptokitties ) that look... nice(?). Cryptokitties made up 11% of Ethereums traffic (12/05/2017). This is seen as problematic as new users continure to pile into the cryptocurrency space, and the problems of a congested network persist. This is problematic because this isn't just oddly adorable kittens unable to breed, this is people's money on the line. Forgive me of my inability to adequately tell this next story, but know that I tried. The last time that I had an experience with congestion (aside from all the times the coinbase app has crashed on me) I had a margin position open on Poloniex . In which I had gone long Ethereum, as it was ascending ...