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Bitcoin and Cryptocurrency Trading in Iran Illicit

Bitcoin BTC Iran

There have been reports that cryptocurrency miners have
increased Iran’s energy consumption by 7 percent.  The Iranian government has, nonetheless, been
very accommodating to the miners. The West Asian nation has ratified a bill
that officially acknowledges cryptocurrency mining. The Iranian government,
however, has not been so friendly towards cryptocurrency trading.

The ratified bill has failed to give cryptocurrency trading the same merit as crypto mining. As per the approved bill, the Iranian government does not recognize digital currency trading done within its borders as lawful.  Tweeting about the issue, Global Coin Research says:

 “Iranian government claims that it will not recognize as lawful any trade activity carried out inside Iran involving cryptocurrencies. It will also not view the digital coin as legal tender, and the Central Bank of Iran would not guarantee their value.”

More Accommodation for Bitcoin

The harsh stance taken on crypto trading, might not do much to dampen the mood of the growing Iranian interest in digital assets. Iranians are turning to digital coins to enable them to access international currencies. Iran is currently stifled by unending US sanctions targeting the Islamic Republic’s already ailing economy.

Cryptocurrencies have allowed Iranians to bypass the Trump administrations sanctions, over its nuclear deal with other global players. The Bitcoin craze has been the subject of many Iranian newspapers headlines, even discussed by the nation’s top ayatollahs. There also have been police raids on mining farms set up to make a profit from the digital currency.

Many government officials have decried crypto mining’s energy-hungry process. Most miners have also been abusing the nation’s system of subsidized electricity. The threat of raids and conflicting statements from authorities have nonetheless, driven crypto mining into the shadows, with miners wary of identification.

A New Dawn for Iran’s Cryptocurrency Mining

Now as the nation, joins the list of the progressive countries that have acknowledged cryptocurrency mining as a legitimate industry, the situation is bound to ease up. Crypto mining has been a gold mine for Iranians at a time when the rial has tumbled heavily against the dollar.

Iran had banned the importation of mining machines until the
bill on cryptocurrencies was ready. This issue will hopefully change as per the
ratified law.  The new law says that
mining will be allowed under certain conditions.

First, the miners will require approval from the mining
regulators. Additionally, there will be no mining in a 30-kilometer boundary
around all provincial centers. The only exception to the boundary rule is
Tehran, the capital city, and Esfahan, the central city, which has more
stringent restrictions.

The miners are also expected to adhere to rules set by the country’s communications and standardization authorities. This is in the areas about mining machines. There will be fees too that miners will need to cover to mine digital currencies in the country. The base price for energy used on mining farms will be as per the export costs.

Taxes will also be levied on mining farms, now classified as
industrial manufacturing units. There is, nonetheless, an exemption for miners
that return the profit earned from the mining activities back to the nation’s
economic cycle. Iran is also ready to set up industrial zones for foreigners
out to take advantage of the nation’s cheap energy. 

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Bitcoin Bulls Raving, the US Fed May Ease Going into 2020

Bitcoin BTC US FED

The Federal Reserve has finally cut its interest rate, its first
reduction since the financial crisis. Bitcoin bulls like Anthony Pompliano, could
not be more excited. The rather aggressive Bitcoin investor has predicted a BTC
price of $100,000 in the next two years. Pomp says that the Fed’s lowered
interest rates coupled with the coming 2020 Bitcoin halving are the ingredients
required to get the BTC bulls on the run.

On Twitter, the American entrepreneur and co-founder of Morgan
Creek Digital Assets wrote:

“Bank of America believes the Federal Reserve may have to resort back to quantitative easing as early as Q4 this year. Step 1 was cutting interest rates. Step 2 is printing money. Step 3 will be the Bitcoin halving. You can’t write a better script for the rise of Bitcoin.”

Is This Good For Bitcoin?

The US has been enjoying a strengthened economy, but their president’s war with China has increased recessions risks. This is particularly so in the face of a broader slowing down of economies across Asia, Latin America, and Europe. Add to this turmoil the Brexit situation in the European Union and Jerome Powell, has had no choice but to implement what he called a “mid-cycle adjustment to policy.”

The Fed’s 25 basis points cut and dovish talk is meant to keep the US economy chugging along. The US President Donald Trump has pushed for these cuts to promote the movement of currency that will, in turn, aid US exports. Investors have been waiting for a more aggressive cycle of easing and are largely disappointed by the one-notch cut.

Powell has spooked them further by his suggestion that he would be
approaching the easing more cautiously. There is a lot of pessimism, therefore
that the Fed’s actions could prop the nation’s economy.

The same factors that have precipitated the cut in rates are the same that have fueled the BTC Bull Run. Tom Lee, another Bitcoin bull, says that the digital currency is the perfect hedge against a risky investing environment. A weakened USD and the prospect of inflation have, therefore, profited BTC.

Bitcoin Is More Than a Currency

This year though Bitcoin has still kept its value rising despite a
strong USD. The cryptocurrency has stayed positively correlated to gold, both
being choice assets for their store of value characteristic. Gold, for
instance, has hit its highest prices in six years this year. Bitcoin’s value,
on the other hand, has quadrupled in the last six months, and despite its
recent dip, the bulls are up again.

Despite its high volatility, Bitcoin’s fundamentals are as strong as can be. There has been immense interest from institutions as well as the retail market. The digital currency’s hash rate has hit a record 74,548,543 TH/s. Its blockchain is, therefore, more secure than ever. Weekly transaction volumes have also stayed above $50 million since 2017.

The cryptocurrency is now more than just a currency. It is also a
haven. A report by Grayscale
Research says that there is a correlation between BTC and macroeconomic
developments. As central banks around the globe turn dovish, cutting interest
rates and printing more bills, Bitcoin is going to achieve mainstream adoption
and more. According to Misir Mahmudov, ” Bitcoin will be a major force against the
destructive wave of high-time preference, instant gratification, rent-seeking,
and short-term thinking. The ability to store value transforms individuals and
enables sustainable future and societal long-term orientation
“.

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3.2 Million BTC Remaining and Forward Looking Investors are Ramping Up

Invest in Bitcoin

As we near the next Bitcoin halving event, only 15 percent of the 21 million BTCs are left to be mined. Now, miners are scrambling for the remaining scarce coins estimated to be 3.2 million.

As per the Bitcoin emission code, these will take more a century to mine. The last BTC will be mined in 2140. Interestingly, 85 percent of Bitcoins were mined and spend in 11 years. Another key point to realize is that in the whole of 2018, only five percent of Bitcoins were mined. In January 2018, the total amount of mined Bitcoins stood at 80 percent.

One Block, 10 Minutes, 12.5 Bitcoins

The Bitcoin network approves a new block after every 10 minutes depending on difficulty. For each confirmed block, the miner earns 12.5 BTCs. However, with the halving event set and projected for May next year, the successful miner-often mining pool- will be pocketing 6.25 BTCs for every new block.

Miners
are individuals or groups who contribute to the security of the chain by
supplying computer power, that is, hash rate. In turn, the network incentive
the pool, made up of individual miners, with these scarce coins.

The
halving event, which is hard-coded into the Bitcoin blockchain, occurs every
210,000 blocks. Expected, when there is a reduction in rewards, miners may
abandon the Bitcoin blockchain leaving it open to attacks.

However,
to counter this effect, the price of Bitcoin tends to be re-priced higher,
overshadowing the possible losses of reduced rewards. In a natural correction
determined by supply-demand dynamics, the resulting scarcity will draw demand
for the asset and the shortfall in BTCs received from every confirmed block will
be covered better prices. Additionally, the drop in rewards may be compensated
by a rise in the transaction fees on the Bitcoin blockchain.

Currently, the most compelling evidence so far points to an increase in the transaction fees. For example, the transaction fees on the Bitcoin network are reportedly at $500 million.  These fees are hovering around $1.50 per transaction. However, there are times when they spike to $6, mostly depending on the network activity. The busier the Bitcoin network, the higher the propensity that miners will charge higher prices to approve transactions.

Bitcoin
Demand from Cash App

Perhaps highlighting how investors are accumulating in expectation of a rally by Q2 2020, , BTC purchases on Square’s Cash App more than doubled.

In a tweet,
a Bitcoin diehard, Kevin Rooke, said:

“Square customers bought $125 million of Bitcoin last quarter on [Square’s] Cash App! That’s 5 straight quarters of accelerating revenue growth for Square’s Bitcoin business, and 237% growth YoY [Year over Year].”

In its second-quarter earnings report,
Square, a payments firm founded by Jack Dorsey, announced that its Bitcoin-focused
Cash App drew $125 million in revenue.

According to Square, through a letter
to shareholders:

“In the second quarter of 2019, Cash App revenue comprised of $135 million in subscription and services-based and transaction-based revenue, and $125 million in Bitcoin revenue. During the quarter, Bitcoin revenue benefited from increased volume as a result of the increase in the price of Bitcoin, and generated $2 million in gross profit.”

It’s important to realize that the
gains made in Q2 tramps those made in Q1. For instance, in Q1, Square reported a revenue and profit of $65.5 million and
$832,000, respectively. Interestingly, in the whole of 2018, Square reported Bitcoin
sales volume of $166 million.

Square’s Cash App is available on both
iOS and Android-powered mobile phones. In June, it added support for direct
Bitcoin deposits. Previously, Cash App’s users were only able to sell,
purchase, and transfer Bitcoin to other wallets.

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Peter Schiff: “Let Not Assume Bitcoin (BTC) Will Succeed”

Bitcoin BTC Schiff

It’s exactly 2 years when Peter Schiff, the president of Euro Pacific Capital, reinforced his sentiments that Bitcoin is a bubble. In August 2017, when Bitcoin touched an all-time high of $4,500, Schiff was adamant that the coin was in a bubble. But, two years down the line, Schiff could be banking on the power of cryptocurrencies.

Talking
to CoinDesk, the EPC president then said:

“There’s certainly a lot of bullishness about Bitcoin and cryptocurrency, and that’s the case with bubbles in general. The psychology of bubbles fuels it. You just become more convinced that it’s going to work. And the higher the price goes, the more convinced you become that you’re right. But it’s going up because it’s going to work. It’s going up because of speculation.”

Fast
forward to July 2019, Schiff said that he’s responsible for the decline in the
price of Bitcoin in July. In a tweet on July 17, 2019, Schiff said:

“On my Bitcoin challenge Live Stream on YouTube on Monday, I recommended selling Bitcoin and buying silver. Since then the price of Bitcoin has fallen by over 10 percent (even after a 10 percent rally from the low), ad silver is up 3.8 percent, its biggest two-day gain in two years. Coincidence.”

Interestingly,
in July, the Bitcoin bear admitted holding Bitcoin. The Bitcoin was donated by
the co-founder of Morgan Creek Digital, Anthony Pompliano, among others. But,
instead of liquidating or donating, Schiff said he would “have to hodl it
and go down with the ship.”

But
it didn’t stop there. Towards the end of July, when appearing on CNBC with
Pompliano, Schiff said:

“I’m already kicking myself, I had that opportunity [to buy at $10]. I could already be a billionaire if I had only bought it back then… I should have bought it when I first heard about it.”

But
is he a Bull?

In 2019, Schiff is slowly morphing from being a bear into a bull. In his latest comments, the goldbug founder acknowledges the revolutionary power of cryptocurrencies. However, he doesn’t see Bitcoin to be the one to lead the revolution necessarily.

Cautioning
investors, he compared the state
of Bitcoin to that of initial development of the telephone:

“The first telephone was not the best telephone; it was improved upon. If cryptocurrency is to work, why would we assume that Bitcoin is the one to succeed? Why would the first attempt be the best attempt? …better, quicker, secure, reliable.”

Unfortunately,
while on CNBC’s Crypto Trader with the co-founder of Morgan Creek, Schiff
stated that gold is a better alternative to Bitcoin despite its price.

Price
is not Always a Good Pointer of Growth

Fortunately, instead of bashing gold, Pompliano took a somewhat cautious route. In his view, Bitcoin and gold can co-exist in the same basket, adding that “I do think it’s a little bit short-sighted to say gold but not Bitcoin.”

An important point to note is that he is solely relying on the price of Bitcoin. To this end, the EPC president considers the 2017 bull run to be the last. For Schiff, “when the market really dropped, people now have a more balanced view, because before that it only went up.”

However, unidirectional view based on price leads to a biased analysis. For example, an analysis of on-chain activities reveals that the interest in Bitcoin is still high. Then again, what Schiff doesn’t understand is that in the last rally, retail investors played a pivotal role while institutional investors are driving the imminent rally.

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Embattled Tron Creator Sun Apologizes to China in Deleted Social Media Post

Tron’s founder pledged to temper aggressive marketing strategies in social media posts that were subsequently deleted.

Blockchain platform Tron’s founder, Justin Sun, sparked fresh controversy this week after he first posted and then deleted an online apology in an ongoing PR debacle. 

Cryptocurrency-focused news outlet Cryptoslate reported the events, providing their own translation of comments Sun wrote and later removed from Chinese social media platform Weibo on July 25.

Sun was due to have lunch with infamous Bitcoin (BTC) naysayer Warren Buffett on Thursday, a date he recently abruptly postponed due to reported ill health. 

At the same time, Sun’s intense marketing of Tron, for which he himself became well known, appeared to backfire as Chinese authorities allegedly raised suspicions over the platform’s legal status. 

Those suspicions went public courtesy of local media outlet Caixin, which also reported he had been banned from foreign travel. Sun then named Caixin in the apology, which appeared to be an attempt to placate Beijing. The translation reads: 

“I didn’t sleep all night yesterday, and deeply reflected on my memories and was introspective for my behavior and words — I felt ashamed for my over-marketing. I want to deeply apologize to the public, media, leaders, and the related regulatory authority who cared about me.” 

As Cointelegraph reported, Sun produced evidence he was in San Francisco, the original venue for the Buffett lunch, to disprove reports that he had been prevented from leaving China.

The entrepreneur has not offered an explanation as to why he chose to delete the apology, in which he pledged to change the tone of his marketing activities. He wrote:

“In the future, I will repair my shortcomings, reduce my vocalizations on Weibo, reduce the media interviews, and translate all the research and development from marketing hype to true blockchain technology.”

Despite the controversy, Tron’s TRX token was still trading up around 2% as of press time Thursday.

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Bitcoin Block Size, Explained

The block size debate is among the most contentious discourse in Bitcoin, having spawned numerous community rifts and contested proposals.

Why did Bitcoin fork and split?

The inability of the community to find consensus regarding a proposal to increase the block size resulted in a user-activated hard fork of the Bitcoin blockchain in August 2017.

While numerous proposals advocating a change to the block size limit had failed to gather the support required to manifest change, transaction fees had skyrocketed by mid-2017. During August 2015, the average BTC transaction fee was just $0.50. However, by June 2017, median fees had increased 10x to approximate $5. With nearly half of the world’s population living on less than $5.50 per day, high fees appeared to have rendered BTC completely unusable for the world’s developing populations, driving a renewed push from within the crypto community to conduct a user-activated hard fork that would raise Bitcoin’s block size limit. 

On Aug. 1, 2018, Bitcoin Cash (BCH) successfully forked away from BTC, splitting the Bitcoin network in two. BCH introduced a block size limit of 8 MB, in addition to implementing a difficulty adjustment algorithm. The fork also rejected the implementation of the Segregated Witness soft fork, which was activated on BTC on July 21, 2017. Rather than explicitly increase the BTC block size, SegWit introduced a “block weight” of 4 MB for Segregated Witness transactions.

During May 2018, BCH underwent a hard fork to increase the block size to 32 MB. However, it then went on to undergo a hard fork once again during November in a network split that saw the emergence of rival chain Bitcoin SV. Initially supporting a block size of 128 MB, Bitcoin SV’s Quasar upgrade further lifted the maximum block size to 2 gigabytes in July 2019.

What is SegWit?

Segregated Witness, or SegWit, is a process by which the data capacity of a block is increased by removing signature data from a Bitcoin transaction. When certain parts of a transaction are removed, capacity is freed up to add more transactions to a block. WIth SegWit, each byte of data only counts as one-quarter of a block, facilitating four times as many transfers to be recorded within a block.

Following a year of intensifying debate regarding the block size limit, a proposal for SegWit 2 MB was published on March 31, 2017. The proposal advocated the activation of Segregated Witness via a soft fork and then a subsequent hard fork to raise the block size to 2 MB.

During the following month, Digital Currency Group published an article titled “Bitcoin Scaling Agreement at Consensus 2017.” It outlined what became known as “The New York Agreement,” expressed a commitment to the activation of SegWit and the implementation of a 2 MB block size limit on behalf of the 58 major Bitcoin companies that then controlled 83.28% of hashing power and represented $5.1 billion in monthly on-chain transaction value. Despite attracting notable support from leading actors within the cryptocurrency industry, the “SegWit2x” fork was canceled just days from its scheduled activation.

Which block size increase proposals garnered community support?

Bitcoin XT, Bitcoin Unlimited, Bitcoin Classic and Segwit2x were among the initiatives to increase Bitcoin block size that received the greatest community support during 2016, but none have succeeded in forcing a block size increase.

In January 2016, BIP101 was removed from Bitcoin XT’s protocol in favor of a one-time block size increase to 2 MB, which preceded the rapid collapse of support for Bitcoin XT. By January 2017, less than 30 Bitcoin XT nodes were maintained by miners — down from approximately 650 one year prior. Despite the collapse of Bitcoin XT, proposals in favor of a block size increase proliferated, such as Bitcoin Unlimited, which was launched in January 2015 and allowed users to signal block sizes.

At the time, Bitcoin Classic emerged as the means to a block size increase that appeared to garner the greatest community support following its launch on Feb. 10, 2016. The proposed fork would support a one-time 2 MB block size increase, with the Wall Street Journal’s Paul Vigna describing the proposal as having “emerged from the ashes of the XT/Core debate.” Despite appearing to quickly gain support, Bitcoin Classic failed to attract support from more than 75% of miners and, as such, failed to emerge as the dominant chain. Bitcoin Classic would eventually cease operations after the project’s developers pledged support for the Bitcoin Cash chain during 2017

On Feb. 20, 2016, Bitcoin Roundtable — a consortium representing many of the leading businesses, exchanges, wallets and mining pools of 2016 — outlined a plan for a hard fork of the Bitcoin blockchain that would force the introduction of the Segregated Witness (SegWit) protocol alongside a 2 MB block size increase.

What was BIP101?

BIP101 proposed that the maximum block size be raised to 8 MB as of Jan. 11, 2016, before increasing linearly to double every 730 days until January 2036. 

The 8 MB limit was estimated to be able to facilitate the processing of 24 transactions per second. The BIP101 proposal was well-received by large segments of the public, including leading Chinese mining pools.

However, the Bitcoin community remained divided on the issue of block size, with Bram Cohen, the creator of Bittorrent, publishing an article titled “Bitcoin’s Ironic Crisis” on June 23, 2015, in which Cohen argued in favor of transactions fees being determined by market forces amid the maintenance of the 1 MB block limit:

“The proposed ‘solution’ to the ‘problem’ of hitting the transaction rate limit is to raise the limit from 1 megabyte to 20 megabytes. This sort of change flies directly in the face of the ethos of Bitcoin.”

Cohen asserted that the prevalence of high fees would evidence Bitcoin to be “providing real value” and emphasized the incentive such an option would offer to miners in exchange for securing the network. Furthermore, Cohen added:

“In the long term the mining rewards for Bitcoin will go away completely (there’s a strict schedule for this) and all that’s left will be transaction fees. Attempting to ‘solve’ the problem of transaction fees would in the long run undermine the security of Bitcoin even if it were done perfectly.”

On Aug. 16, 2015, Andresen’s BIP101 was merged into the code of Bitcoin XT. Despite BIP101 receiving widespread support from the crypto community, the inclusion of BIP101 into Bitcoin XT’s protocol failed to spark widespread adoption of the alternative client. During the second half of 2015, users of Bitcoin XT alleged that they were the victims of a coordinated attack against the chain.

Why increase the block size?

Over the years, Bitcoin has seen numerous proposals advocating that an increase is needed in order to reduce fees, process more transactions per second and allow Bitcoin to scale to compete with mainstream payments technologies.  

On May 4, 2015, Gavin Andresen published an article titled “Why increasing the max block size is urgent,” further escalating the perceived gravity of the block size debate, despite the average BTC block then being only 30-40% full. Andresen warned:

“If the number of transactions waiting gets large enough, the end result will be an over-saturated network, busy doing nothing productive. I don’t think that is likely — it is more likely people just stop using Bitcoin because transaction confirmation becomes increasingly unreliable.”

Later that month, Andresen asserted that he would shift his work toward alternative client Bitcoin XT should the community fail to reach consensus regarding the implementation of a block size increase. The 0.10 version of Bitcoin XT had been launched during December 2014 by Bitcoin Core developer and prominent critic of the 1 MB block limit Mike Hearn.

On June 4, 2015, Andresen advocated that the miners and node operators should be able to autonomously decide the size of blocks, arguing that the community should either maintain the limit and “see how high transactions fees must rise until miners realize they’re ‘leaving money on the table’ and raise the -blockmaxsie themselves” or alternatively “replace the limit with a ‘go along with the crowd’ rule that means any miner that doesn’t care will create blocks that neither increase nor decrease the average block size.”

On June 12, 2015, a statement requesting the introduction 8 MB blocks that had been signed by major Chinese mining pools F2pool, BTCChina, Antpool, Huobi and BW surfaced online, indicating transnational demand for larger blocks.

On June 22, 2015, Andresen published Bitcoin Improvement Proposal (BIP) 101, which advocated “replacing the fixed one-megabyte maximum block size with a maximum size that grows over time at a predictable rate.”

Why does block size matter?

The size of a block imposes a limit on the number of transactions that the Bitcoin network is capable of processing per second and thus can be seen to inhibit the network’s ability to scale. When blocks fill, the network becomes congested, and transaction fees rise dramatically.

At the start of 2013, the average Bitcoin block size was approximately 125 kilobytes. By May 2015, increasing adoption had led to a 240% rise in block size since 2013 — from 125 KB to roughly 425 KB — however, crypto trade tool provider TradeBlock then estimated that blocks were hitting the 1 MB limit at least four times daily on average. 

By 2015, the increasing prevalence of blocks near the limit of transactional data began to pervade the mainstream cryptocurrency zeitgeist, with concerns pertaining to a significant slowdown in the processing of transactions and an increase in fees being brought to the fore.

The resulting increased fees and delays in the processing of transactions were seen to undermine the core utilities underpinning BTC, with many within the community concerned that network congestion and an increase in the cost of transfers would render Bitcoin redundant as a means of exchange. 

At the time, TradeBlock estimated that “at least some otherwise-acceptable transactions are seeing delayed confirmations due to capacity issues on the network 3% of the time since the beginning of the year.”

What are blocks?

A block comprises a file in which data pertaining to the most recent transactions on the Bitcoin (BTC) network is permanently recorded. Each block can be likened to a page of a ledger, with the blocks “chaining” together to comprise the decentralized ledger that underpins the Bitcoin network.

Those bundled transactions are confirmed by miners before they are added to the Bitcoin blockchain as new blocks. The size of a block creates a limit on the number of transactions that can be verified with each block. As such, larger blocks require greater computation power and will take longer to be mined. Blocks exceeding the limit will be rejected by the network.

During Bitcoin’s infancy, blocks were limited to carry no more than 36 megabytes of transaction data each. However, the block size was reduced to 1 MB on July 14, 2010 in order to counter both the threat of transactional spam clogging up the network and potential distributed denial-of-service (DDoS) attacks. 

However, universal consensus regarding an ideal block size was not found, and core developers predicted that the rate of transactions hosted by the network may exceed the available block space in future, arguing in favor of an increase to the 1 MB limit shortly after it was put in place. Since the introduction of the 1 MB block limit, the number of transactions processed per second by the BTC network has largely oscillated between two and seven.

Chart of Bitcoin transactions per second

Chart of Bitcoin transactions per second

Source: Blockchain.com

 

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Bitcoin is Not Based on Thin Air, USD and Fiat Are

Bitcoin BTC

Last week, the US President, Donald Trump, indicated that one of the reasons he hates Bitcoin is because it’s based on thin air. This raised the question of whether USD or fiat is actually based on anything solid. The debate is now on fiat banking.

When
it comes to banking, for example, financial institutions employ fractional
reserve banking. With this mode of banking, only a section of the deposits is
backed by actual cash on hand. Consequently, only this fraction is available
for withdrawal.

For example, when a bank’s customer deposits $1,000, the bank may retain $100 in actual cash then use the remaining $900 to issue out loans. The $100 is therefore reserve. Although Trump thinks Bitcoin is based on thin air, fractional reserve banking creates money by using a percentage of the bank deposits.

Additionally, there’s a narrative that the USD is backed by debt, “and the largest army in the world is willing and eager to fight wars to protect it.”However, the crypto community noted that the USD and fiat are the ones based on thin air.

Redditors
noted:

“If the issue of how money is created is put for debate, we will have a revolution next week… It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”

Bitcoin
Has A Higher Economic Value Compared To USD

Interestingly, Bitcoin has a higher intrinsic value compared to USD and fiat in general. For something to have an economic or inherent value, it must have utility and scarcity. Therefore, if it has utility but without scarcity, it is abundant and doesn’t have intrinsic value. Also, if it’s scarce, but without utility, it still lacks intrinsic value.

According to slvbtc, a Redditor.:

“Bitcoin has the most predictive mathematically-provable strictest scarcity ever conceived and has the potential to be the most useful form of money ever invented, therefore potentially making it one of the world’s most valuable objects. Scarcity is a done deal, and every day that passes with every newly added user of the network, new developer, new liquidity, new app, Bitcoin’s utility increases exponentially.”

The USD, as with other fiat currencies, has intrinsic value because the federal government accepts it as payment for taxes. Ironically, failure to pay the taxes prompts governments to “show up with riffles and take away your freedom.” Therefore, staying “alive and out of jail is intrinsically valuable.”

Then What Is the USD Based On?

As noted by a crypto enthusiast, in the early internet days, digital companies like Microsoft, Amazon, and Google were thought to be based on thin air. Fortunately, some investors recognized the power in their coded products and or services.

For
example, as noted by elitistasshole on Reddit:

“Spreadsheet software was created 40 years ago first for Apple II and later on competing platforms. VisiCalc ad Lotus 1-2-3 had hundreds of millions of dollars in sales within a few years of founding.”

Since
Trump says Bitcoin is based on thin air, can the federal reserve show from
where it prints new money? Does he understand that every time another dollar is
printed, the dollar previously in circulation decreases in value?

The post Bitcoin is Not Based on Thin Air, USD and Fiat Are appeared first on Ethereum World News.