Benzinga
Bitcoin is not a precursor to economic change, but Defy
Posted by: Tim Fries The closer you are to the sun, the less visible you are. These words of wisdom can somehow be found, telling the simple truth about human effort. The closer you are to the subject, the more likely you are to miss important concepts that are out of focus and engage in confused thinking. This applies in many ways to the complex and pioneering world of blockchain. Fortunately, after crossing many milestones, you can take a more objective view in the rearview mirror. Bitcoin has become mainstream-but is its usefulness promising? It is no exaggeration to say that Bitcoin has broken many barriers after reaching a market capitalization of $ 1 trillion and being integrated into global payment processing flows such as PayPal and Square’s Cash App. In the past few months, Canada has approved four Ethereum ETFs, which were launched in February by Purpose Investments on the Toronto Stock Exchange. In the US, we have not yet confirmed Bitcoin ETFs on NASDAQ or NYSE, but the crypto-in BTC ETF is currently under consideration by the SEC. But there are other types of milestones in the United States. Coinbase Cryptographic Exchange was listed on NASDAQ as COIN this month following BTC price fluctuations. Source: TradingView, Bitcoin (BTC) vs. Coinbase (COIN) stocks (April 2021). It is no exaggeration to say that Bitcoin has become a reliable cryptocurrency for large corporations, asset management groups, and hedge funds. Michael Saylor convinced many at the “Bitcoin for Corporations” conference on February 3rd. They now see Bitcoin as digital gold to protect wealth from the devaluation of the US dollar and the negative interest rates that some Federal Reserve Boards may advocate. Meanwhile, as the list of companies integrating Bitcoin grows day by day, even automated accounting software such as Freshbooks has begun to account for balance sheets containing Bitcoin. To this end, the trend towards becoming Bitcoin’s financial reserve continues to accelerate. It’s true that decentralized assets have achieved such status, and while Bitcoin can be used that way, it can no longer be pretended that Bitcoin is the payment method. Nor can it be pretended to be as revolutionary as Bitcoin is depicted. Indeed, it’s a more convenient way to store value. It also makes the world available to autonomous currencies, regardless of a particular nation-state or economy. Similarly, Bitcoin is at the mercy of the government. If North America and the EU decide to impose more restrictions, or if they decide to lift the Bitcoin platform altogether when deploying the CBDC, it will see the value of Bitcoin collapse. It Is difficult. El Elian, Allianz Chief Economic Advisor, told CNN last month: This is an asset that you want to establish itself, but you can only establish it if the government allows it. And it robs the government a lot. Imagine the government banning Bitcoin is certainly not out of the realm of possibilities. This happened with physical gold in the United States. They may innovate this time and decide to lift the Bitcoin platform within the framework of climate change. Since Tesla has invested heavily in Bitcoin and made more profits than selling EVs in 2020, the headline lamenting Bitcoin’s carbon dioxide emissions has been avalanche. This view is in full agreement with the existing views of major banks such as Bank of America, citing Bitcoin’s low ESG ratings (environmental, social and corporate governance). After all, it doesn’t really matter if Bitcoin survives. In the eyes of many, that mission has been accomplished. It is to show the concept of decentralized assets to the whole world. More importantly, Bitcoin is remembered as the project that brought the true revolutionary power behind it, the smart contract. Danger of Centralization If one BTC someday becomes worth $ 1 million, it’s not as valuable as the destructive power of smart contracts driven by the Ethereum blockchain. To understand its value, you can quickly explore Citadel Securities to get a better understanding of your existing system. The Citadel Conglomerate has a very strong power. Composition: Market maker. Clearing house. A hedge fund that regularly short-sells. Citadel Securities trades in about the same amount as NASDAQ, and while being a participant in DTC (Depository Trust Company), it purchases order flows from securities companies such as Robin Hood. DTC holds ownership of almost all securities as a digital qualification. Conflicts of interest and potential areas of greed, exploitation and corruption are enormous. When a DeFi Breaking Perpetual Oversight Lag entity is motivated to circumvent a rule, it does it at a more creative pace. They become very creative and create a new phenomenon of regulated prisoners of war. This phenomenon makes it difficult to distinguish between regulators / policy makers and the people they are supposed to regulate. While this arms race is not lost, it creates as much friction and instability as it may be. Of course, unless the entire stadium changes. For the first time in history, we can reinvent the way the financial world operates. At its basic level, the world is now based on contracts enforced by the perishable human spirit. This is a big picture of the banking sector and financial markets, from equity brokers like Robin Hood to major forex trading platforms. Instead of occupying an institutional labyrinth to make money in this arena stream, blockchain-powered smart contracts can occupy that space. The smart contract, first proposed by cryptographer Nick Sabo in 1997, includes the blockchain, an important element that was first needed. As a computer program stored on the blockchain, you can automatically execute contracts without the risk of being tampered with. In other words, there are no longer any barriers to replace all the functionality that an entity such as Citadel is currently performing. From Market Maker to Automatic Market Maker (AMM): A smart contract (dApp) without permission to use the liquidity pool on behalf of buyers and sellers. Turn the clearinghouse into a distributed data store (blockchain). Centralized exchange to decentralized exchange (DEX) using AMM and liquidity provider tokens. Uniswap is just one of these candidates, and it doesn’t even have to create an arms race between regulators and corrupt people. Similarly, central banks (loans and borrowings) can be diversified by using cryptocurrencies as collateral. Smart contracts can automatically scan crypto wallets to “see” how they are already being used. In addition, existing traditional assets such as stocks can also be tokenized to inherit key immutable blockchain properties. Binance, the world’s largest cryptocurrency exchange, already offers two stock tokens (Tesla (TSLA) and Coinbase (COIN)) on the Binance Smart Chain (BSC). Like DeFi, an inevitable and innovative printing press, smart contracts are toothpaste that can’t be returned to tubes. The pace at which certain aspects of DeFi absorb the corresponding parts of the legacy financial system depends on two factors. DeFi needs to be simplified so that it can be used with the lowest common denominator. This includes interoperability between different blockchains, so end users don’t even have to think about in which blockchain space the transaction resides. Many believe this is likely to be Ethereum, as they are a little closer to completing the ETH 2.0 upgrade and offer the long-awaited scalability and environmental sustainability. Top-down instructions. Ironically, to avoid staying in the financial margins, DeFi requires top-down orders with space to thrive. On paper, one governing layer above banks is government. It may be funny to think that they put such pressure on them. But just as you mock the idea of a printing press for a monk’s lobby, it can be laughable to ignore smart contracts. In conclusion, Bitcoin is, in many respects, the red herring in the cryptocurrency world. It’s my first time so it’s big. And it’s getting bigger because of the stupidity of the central bank. The latter can still stop it in its orbit, but what it can’t stop is DeFi, a new financial-aware framework, including how it is distributed and protected. .. While Bitcoin has played a key role in integrating this new crypto recognition, DeFi is an ecosystem that can be built to create a less corrupt world. Learn more about Benzinga Click here for Benzinga options trading. 70% of millennials spend an hour each year comparing insurance quotes. 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