What comes up must come down — can Bitcoin defy gravity or will it just crash?
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Let us determine what money actually is, first. Money is a kind of social agreement where we use a certain object as payment.
For the duration of its use, humanity has used many different kinds of assets as payment, — from animal skins to debentures. Currencies were constantly competing and evolving while the less effective ones would disappear or stay in the background of those in demand. Thus an economic model reflects the condition of the society bitcoin exchange rate volatility gravity which it is used. But, as we know, these models are not set once and for all. The liquidity of any currency is determined by the level of trust it gains from a society.
Nowadays, properties of payment processes such as security, anonymity, and confidentiality have become more valuable than ever. From this point of view, none of modern fiat currencies are reliable. As seen in the progression of history when an existing model becomes inefficient, a new one always appears.
As we know, the technology of the distributed ledger has now been invented, offering much more efficient solutions.
This invention initiated the migration of values into blockchain assets, in which technologies give birth to the principles of a new digital economy.
It is safe to say that at this point in our history, crypto-currencies have taken a firm position in our world. This can easily be seen by bitcoin exchange rate volatility gravity capitalization. Unfortunately, there is still no crypto-currency that has passed a qualitative milestone large enough to be considered a full-fledged payment instrument.
To explain this, let us imagine that we are buying a cup of coffee. We can pay in dollars or Bitcoins. The next day we can also buy a cup of coffee spending same amount of dollars, but the amount we might pay in Bitcoin is much more difficult to estimate or predict.
This is something Bitcoin cannot offer at the moment so we still measure it in bitcoin exchange rate volatility gravity dollar equivalent. As a result, crypto-currencies are not able to fulfill one of the key requirements of money, which is to be a measure of the value of goods, because using money as we've defined, market participants determine the prices of goods. It is clear that the disadvantages of current solutions inhibit the spread and adoption bitcoin exchange rate volatility gravity blockchain technologies.
Looking more closely at these disadvantages allows bitcoin exchange rate volatility gravity to learn from the current financial system. Let us take emission mechanisms as an example. The fiat money emission is controlled by the central bank of a country.
In bitcoin exchange rate volatility gravity case of economic growth and a national currency deficit, the country will accelerate emission so that the exchange rate of its currency does not increase excessively with respect to other currencies. This provides the economy with necessary liquidity. What is important to note is that emission speeds up the economy.
This shows us that the emission of fiat currencies is dynamic and is used with regard to the needs of the economy, ensuring its governability. The current situation in the crypto-currency market is the opposite. It is easy to see that all of the existing and developing blockchain protocols offer a fixed or algorithmically designated emission that is not tied in any way to the real growth of the network or its demands in liquidity.
The emission algorithms Satoshi Nakamoto put into the Bitcoin network as well as Vitalik Buterin for Ethereum or Dan Larimer in the case of EOS, are only abstract values which have no correlation to real network growth. Furthermore, the principles of distribution are also far from perfect. But now, this problems of the distribution is now solved in a brilliant way. Blockchain technologies allow for the algorithmic distribution of emission, with no intermediaries, directly into the accounts of market participants.
But further distribution there also has its problems. Because distribution is made via the miners or stack-holders in different consensus algorithms who are rarely active participants in the network in the context of real transactions.
These participants mostly adhere to an asset retention strategy with the aim of selling at a higher price later. Miners are also adding additional pressure to rates as they constantly need to pay the often bitcoin exchange rate volatility gravity electricity bills associated with mining,and frequently upgrade their hardware.
Holders do not benefit from using tokens as a payment instrument, bitcoin exchange rate volatility gravity even less so for practical solutions. As a result, they are focused on the speculative aspect of the currency.
If the share of real use was more than a speculative component, the rate of bitcoin exchange rate volatility gravity token would be much more stable.
Let's take Bitcoin as an example bitcoin exchange rate volatility gravity find the correlation between network growth and coin rate.
The recession of the crypto-currency market in February-March was a direct illustration of this. Both fast growth and the inevitable recession hinder the network development. Accordingly, on a blockchain, there is no relationship between the emission and the growth of the network on the economic level. Fortunately, we still learn from working solutions that we do have and create better technologies to replace existing non-effective ones.
To solve the problem, Gravity Protocol uses a special algorithm of adaptive emission to calculate the rate of emission on the basis of Gravity Network Index that bitcoin exchange rate volatility gravity according to the growth of the network. After the peak values of the Gravity Network Index are reached, the protocol does not release tokens until the next peak is reached. Token owners will receive the reward not in the form of the deflationary growth of the token rate, but instead, in the form of the increasing number of tokens on their account bitcoin exchange rate volatility gravity to the adaptive emission.
This will, in turn, motivate participants to create decentralized applications and businesses. For example, in the sphere of e-commerce, services which accept payment in the form of Gravity tokens, will receive an additional economic stimulus as a benefit of adaptive emission. This means tokens are only issued to cover the growing needs of the network. The Gravity Index solution protects against a speculative overvaluation of the bitcoin exchange rate volatility gravity at the protocol level and accelerates economic processes and growth of the network bitcoin exchange rate volatility gravity the intention to reduce the token rate fluctuations.
When the network gathers its critical mass and stabilizes, this will lead to the reduction in the base token rate volatility similar to that of fiat currencies. This will also make it a full-fledged payment instrument that would actually be a viable solution to the widespread crypto payment acceptance problem. We combine all of the best aspects from the real- and crypto-economy, and we get both monetary stock, which grows synchronously with the economy, as well as an efficient distribution system without intermediaries.
Thus, the network receives additional stimulus for growth as well as a harmonious redistribution of ownership at the protocol level, which contributes to efficiency and sustainability. It seems a pretty interesting solution to the current problem. Unlike, some of us are thinking, inflationary systems is not always adherence to the value of the system. Well, looking forward to it gravity-protocol great point of view. Traditionally gold was not a good currency as it was deflationary and it encouraged bitcoin exchange rate volatility gravity to hoard it.
I think there will be an healthy competition between a lot of stable coin that will be good for the overall ecosystem, we need storage valuedapps protocol platform and stable coin in order for the economy to. None of the assets gold, commodity, property, stocks, crypto are a good currency because of their deflationary nature. Though cryptocurrency is totally decentralized, people yet measure it against fiats. Until the volatility of cryptocurrency reduces, bitcoin exchange rate volatility gravity will be difficult to consider as mainstream currency.
Hope one day cryptocurrency will dominate the world and make the globe smaller. Thanks for the nice article. I only do small time trading but I like the information that you provided here. Please keep up the great work! I think the more complex the financial system is the more stable the economy it could be, so it's better not to put all your eggs into fiat, diversity is proven to be effective to prevent economic crisis like what happen in that they are so confident about the fiat currencies, but all it does is to create a chaos and war in bitcoin exchange rate volatility gravity countries and exploit their commodities.
While crypto money certainly introduces new challenges, it is still most certainly superior over fiat, especially the concepts of decentralization and being of a finite supply. The fact that Bitcoin, for example, is experiencing wild swings in terms of value, is something that we as humans will have to evolve in order to deal with.
I will check this out and create a feasibility study here in the Philippines if gravity-protocol can sustain a stable form bitcoin exchange rate volatility gravity a passive income.
Will check the channels that you posted. I think that nowadays there are few businesses in the world that are paid in cryptocurrency but as this currency and confidence continue to grow I think it will be the best alternative worldwide, as well as less and less people pay in cash and more with debit cards in the future people will pay only with cryptocurrency. And I can also add that the cryptocurrency has been a solution or help countries where people are drowned by bitcoin exchange rate volatility gravity economy such is the case of Venezuela and India I think are the countries that this year have joined with the largest number of people to the platform of steemit as an economic solution to the crisis that these two countries present as they get cryptocurrency in this case steem or steem dollar and change it to the currency of your country is much higher than a minimum wage being a solution for dress and food Yes, we also believe that a new economy model will emerge on the basis of blockchain technologies.
From Venezuela support your work friend, greetings and keep it up, showing good quality in your posts Blockchain economy a real especially for the countries with large population and where banking has not reached its will provide a great boon to the economy because technology will be much better than setting up an infrastructure.
For the developing countries Africa, South America bitcoin is already a currency and not an investment asset. And they need to have a currency with better scalability and economy design.
Keep it up greetings!! Hi gravity-protocolThanks for your nice updated information, This post is completely full of information, Hope you'll do this further. Gravity is a high thinking mater.
That's a complex subject. I believe as this crypto market gets more mature, it'll be more predictable You have completed some achievement on Steemit and have been rewarded with new badge s:. Award for the total payout received. To support your work, I also upvoted your post! For more information about SteemitBoard, click here.
If you no longer want to receive notifications, reply to this comment with the word STOP. Upvote this notification to help all Steemit users. This information is being presented in the interest of transparency on our platform gravity-protocol and is by no means a judgement of your work. Very good article gravity-protocol, it seems very interesting worth trying, I bitcoin exchange rate volatility gravity it is already proven very successful! You got a very good definition of what money really is gravity-protocol.
Good post and I agree! Hello friend, excellent publication, I liked it a lot. Count on me, I invite you to visit my profile and count on you too, Regards. Your post was mentioned in the Steemit Hit Parade in the following category:.