Emerging Markets of Cryptocurrencies

[dnprock]

Hi everyone,

Here's my view of crypto future. Cut through the noise and move forward!

Original Post: https://bitflate.org/post/2019/11/10/emerging-markets-of-cryptocurrencies.html

Ten years after Bitcoin whitepaper release, cryptocurrencies have advanced. But its progress is slow. All cryptocurrencies, including Bitcoin, are just niche speculative assets. We have Bitcoin, Litecoin, Dogecoin, Ethereum, Ripple, Stellar, and many others. Why has a single crypto made into everyday transactions? We still can’t purchase coffee with cryptocurrency. The world of finance remains disconnected from crypto.

I believe the problem is the lack of experimentation with crypto monetary policy. Crypto builders have focused a lot of attention on the technology. Monetary policy changes are hacks to fix temporary issues. For example, Dogecoin and Grin have tail emission. This kind of supply increase is intended to keep miners around. It does little to change long-term supply and monetary policy. Eventually, tail emission will behave like zero new supply.

I have advocated for more experimentation with crypto monetary policy. Facebook recently introduced Libra. I think it is an interesting improvement. Forward to the future, I develop a framework to understand emerging markets of cryptocurrencies.



Between centralization and decentralization, we have a range of currencies. Each of them will behave differently. Centralization will enable control of currency supply and price. With decentralization, we rely on computers to handle crypto operation. We will not be able to control supply and price. In exchange, rules are fixed. People cannot manipulate rules for their advantage. The game is fair for everyone who understands its rules.

Store of Value & Digital Gold Cryptocurrency

Bitcoin is the pioneer and leader in Store of Value (SoV). Limited supply feature makes Bitcoin a Store of Value. Bitcoiners understand the software and its rules. It is extremely difficult to change them. Other altcoins with limited supply will fall into this category. They are competing with Bitcoin for market share. For example, Litecoin positions as Digital Silver. Ethereum is Programmable Store of Value.

I see the following emerging markets of cryptocurrencies.

Centralized and Semi-Centralized Cryptocurrency

On centralization side, we will have improved centralized currencies and cryptocurrencies. Central banks will eventually integrate more technologies. They may record and publish their currency operation on a public digital ledger. Private companies have made strides in providing stablecoin connection between crypto and fiat. Tether is an example of stablecoin connecting crypto and fiat. Ripple and Stellar are trying to adapt crypto software for traditional financial system.

Libra departs away from centralization. Facebook introduced the Libra Association which includes reputable members. Libra software is open source. Libra governance can be more transparent than other centralized currencies.

Interesting development in this category will involve experimentation with software system and monetary policy.

Inflating Cryptocurrency

I think this will be an emerging type of cryptocurrency. Crypto market has overlooked inflation. Being dogmatic about limited supply creates a blind spot. Crypto builder historically dismissed inflation. I think this hinders crypto adoption. Inflation can stabilize price. It discourages HODL behavior. It makes the currency more suitable for transactions. Inflating cryptocurrency can be decentralized and governed by fixed rules. As people becomes more comfortable with using inflating cryptocurrency, they will understand the role of SoV like Bitcoin.

Bitflate is a cryptocurrency with a constant inflation of 7% per year.

[CjMapope]

its kinda strange this coin is so worthless given its block reward and distribution structure, 5% of the current supply is like 30$ on market right now : /
it seems like your actually trying to write and stuff, i think the scene is just too saturated with too many alts right now
people that have technical bandwidth should just work together, everyone and their programming mother is making a coin lately

[dnprock]

its kinda strange this coin is so worthless given its block reward and distribution structure, 5% of the current supply is like 30$ on market right now : /
it seems like your actually trying to write and stuff, i think the scene is just too saturated with too many alts right now
people that have technical bandwidth should just work together, everyone and their programming mother is making a coin lately

I do think Bitflate coin is really cheap now. But $30 is still real money . I own and buy the coins. I also spend my time writing and reaching out to people. I want to convince more people that this coin is necessary. It's not easy. The market is noisy. You can say given its price, it's a shitcoin. But on the bright side, if you believe in its prospect, it's a great price. The price is near mining cost. At least, you'll know it is not a scam. Someone spent real money mining these coins and sell you at close to their cost.

Speaking of crypto market, although it's saturated with many altcoins, it's stuck. Bitcoin is a lonely king. Nobody really has any idea where the space would go. Maybe, people will eventually come to see my proposal of inflating cryptocurrency. The hard, but great thing in crypto is you can decide yourself. Big money and big name investors have not been effective in crypto. You don't have to follow the marketing and hype. Do your own research and decide.

Bitflate is looking for collaborators. Anyone with technical/marketing bandwidth can buy Bitflate coins for cheap and join the project.

[Duncan.Idaho]

Store of Value & Digital Gold Cryptocurrency

Centralized and Semi-Centralized Cryptocurrency

Inflating Cryptocurrency

Good diagram.
The more visual cryptocurrencies concepts can be presented the better.

Centralized and Semi-Centralized and Decentralize

Only Decentralize crypto is a coin.  Code is the law.  It survives and thrives in the wild.  Look at coins/chains at least 5 years or older.

Centralized and Semi-Centralized are fiat, "FAITH" in a organization.  So basically the same, both require responsive leadership and development.  Semi-Centralized differs how?  I would suggest the code base is less subject to 'up-date' or frequent 'forks'  AND and projects types that can handle re-organization.

I don't think 'stable' is a necessary characteristic of  Centralized and Semi-Centralized crypto-fiat.  There can be many classifications:  fixed income, high yield, stable 1:1, etc.

Inflating Cryptocurrency

I think this will be an emerging type of cryptocurrency. Crypto market has overlooked inflation. Being dogmatic about limited supply creates a blind spot. Crypto builder historically dismissed inflation. I think this hinders crypto adoption. Inflation can stabilize price. It discourages HODL behavior. It makes the currency more suitable for transactions. Inflating cryptocurrency can be decentralized and governed by fixed rules. As people becomes more comfortable with using inflating cryptocurrency, they will understand the role of SoV like Bitcoin.

Bitflate is a cryptocurrency with a constant inflation of 7% per year.

Cryptocurrency with a constant inflation DOGE is the leading examples (10000 doge per block), UNO is in the same model (0.01 units per block) in perpetual production.
This helps forecast and predict pricing models.

"It makes the currency more suitable for transactions", IMO, regular transactions will never use crypto, NEVER.

It is easier/faster/cheaper to use a payment service that moves value off the chain, internally.   

The SOV is the sales pitch.

Hold your own keys.  (Bullion vault)

Send a few coins to payment service of your choice to maintain spending balances. (checking accounts)

[cichaescut]

There will be no complete decentralisation in the nearest future and I believe that your point is very interesting, because emerging decentralisation and centralisation could be a very important step towards the mass adoption.

[nanaimogold]

its kinda strange this coin is so worthless given its block reward and distribution structure, 5% of the current supply is like 30$ on market right now : /
it seems like your actually trying to write and stuff, i think the scene is just too saturated with too many alts right now
people that have technical bandwidth should just work together, everyone and their programming mother is making a coin lately

It is one of the demerits of decentralization. Its provides the leeway for every tom dick and harry to now launch a coin to feed their greed. This is why i call for regulation. To have more sanity in this space. Without it, i am afraid we cant do much to market crypto for better acceptance due to these incessant fraud

[dnprock]

Cryptocurrency with a constant inflation DOGE is the leading examples (10000 doge per block), UNO is in the same model (0.01 units per block) in perpetual production.

I feel like I will need to explain this a thousand times. DOGE has tail emission. It is not the same as inflating supply. It's tail emission will become smaller over time relative to supply. Eventually, tail emission will be so small that it'll behave as no new supply. I categorize inflating cryptocurrencies as those with percentage inflation of supply.

its kinda strange this coin is so worthless given its block reward and distribution structure, 5% of the current supply is like 30$ on market right now : /
it seems like your actually trying to write and stuff, i think the scene is just too saturated with too many alts right now
people that have technical bandwidth should just work together, everyone and their programming mother is making a coin lately

It is one of the demerits of decentralization. Its provides the leeway for every tom dick and harry to now launch a coin to feed their greed. This is why i call for regulation. To have more sanity in this space. Without it, i am afraid we cant do much to market crypto for better acceptance due to these incessant fraud

When there is price pump, people call it scam. When price is very low, people still call it scam. I launched Bitflate. It has 7% supply inflation. Eventually, everyone's bag will be worth less. Currently, you can buy them for less than 10 sats. This coin is not making me rich.

Bitflate is an experiment to bring inflation to cryptocurrency. I think this new concept will benefit everyone in crypto. I hope people will spend time reading my posts on bitflate.org.

[Febo]

Centralized and Semi-Centralized Cryptocurrency

On centralization side, we will have improved centralized currencies and cryptocurrencies. Central banks will eventually integrate more technologies. They may record and publish their currency operation on a public digital ledger. Private companies have made strides in providing stablecoin connection between crypto and fiat. Tether is an example of stablecoin connecting crypto and fiat. Ripple and Stellar are trying to adapt crypto software for traditional financial system.

Libra departs away from centralization. Facebook introduced the Libra Association which includes reputable members. Libra software is open source. Libra governance can be more transparent than other centralized currencies.

With cryptocurrenicies you have many shades of decentralisation. It is not black and white as many thinks. and also not just few options as your picture shows. They are many many more. Even when we talk of decentralization there are several. One and main is how is reach consensus. In PoW crypto currencies is with mining. And only here are so many variants how decentralised it is. It depends even on how affordable miners are.  Can they be bought in Afghanistan Guatemala and Uganda? A lots of coins is mined with ASIC miners that rare can buy.

But there is not only consensus that needs to be decentralised. It has to be same with development. How to decide what will be developed next.  There are probably other things. Exchanges. Merchants. Whole infrastructure. As I said there are many shades of decentralization. And we would be probably very surprised what coin is most decentralised at the end.

[dnprock]

With cryptocurrenicies you have many shades of decentralisation. It is not black and white as many thinks. and also not just few options as your picture shows. They are many many more. Even when we talk of decentralization there are several. One and main is how is reach consensus. In PoW crypto currencies is with mining. And only here are so many variants how decentralised it is. It depends even on how affordable miners are.  Can they be bought in Afghanistan Guatemala and Uganda? A lots of coins is mined with ASIC miners that rare can buy.

But there is not only consensus that needs to be decentralised. It has to be same with development. How to decide what will be developed next.  There are probably other things. Exchanges. Merchants. Whole infrastructure. As I said there are many shades of decentralization. And we would be probably very surprised what coin is most decentralised at the end.

Point taken. I agree there is variance in decentralization. My diagram only illustrated a few in each category. We can argue endlessly about how decentralized a coin is. I came up with a test of decentralization: Can I fork this coin to make something I want? I may not have anyone supporting my fork. But it's entirely possible to do. Bitcoin passes this test nicely. There are numerous forks of Bitcoin at many levels: chain soft fork, hard fork, source code fork. If we include all of Bitcoin's forks into Bitcoin, it'll be the most decentralized. Bitcoin forks also inherit this characteristic.

On the other hand, can I fork fiat to make something I want?
Can I fork Tether to make something I want?
Can I fork XRP to make something I want?

It's not easy.

I think Libra is semi-decentralized. They already published Libra source code. There's an effort to fork Libra with OpenLibra.

[coinfinger]

I think that there is too many politics that is surrounding this cryptocurrency and this has to do with the government. It is quite clear that not all government actually like cryptocurrency because they feel it will strip them off their power, so you see that they are trying everything possible to make sure that it is not fully recognized as cryptocurrency, but joining in making promotion of it more on the digital asset which they are using to divert the attention of its users and believers since there is nothing that they can do against it to actually destroy it.

You can verify this from the attack that was launched on Facebook Libra coin of recent after they know that this could really be the eye opener of cryptocurrency to the people of the world because of Facebook influence.

[dnprock]

I want to bump up this topic. Ray Dalio recently made a recent comment about Bitcoin. He doesn't think Bitcoin is money. It's neither Store of Value nor Medium of Exchange. He sees more potential in stablecoins like Libra but thinks they're far away.

https://u.today/billionaire-ray-dalio-on-bitcoin-and-stablecoins-possibly-never

I highlighted the crypto emerging markets in my OP. I think the future will have a variety of currencies ranging from centralized to decentralized. Check out my project Bitflate, https://bitflate.org. It aims to be a decentralized "somewhat" stablecoin.

[starblocks]

Libra is a huge project and is likely to have its own payment gateways through its partners, but the possibility to purchase commodities with it like Bitcoin which is digital gold will most probably be possible if its launch is a success and it becomes widely used