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Interview with David Sønstebø

Category: Speculation

Updated: The Next Bullmarket. Self-fulfilling Prophecies, Depression and Necessities.

Updated: The Next Bullmarket. Self-fulfilling Prophecies, Depression and Necessities.

A commentary.

It’s summer 2018 in the northern hemisphere but winter in the crypto-sphere. While Bitcoin started to move way higher than expected in November 2017, right now we’re even lower than October, price-wise. As a result, almost everyone that invested after mid-December lost money, and those who bought in October, but didn’t sell, too.

~813 billion Dollars peaked the capitalization on January the 8th. The market lost almost 600 billion Dollars until today.

The gigantic investment bubble took its toll on the majority of its investors which presumably learned an important lesson. Don’t trust crypto. And they shouldn’t.

A bear market is not a natural occurring hazard, it’s a mix of supply, demand and the influence of countless early investors, the “smart money” that have the knowledge and influence to manipulate the market in order to create a big return on investment.

Supply and demand, obviously the most important indicator for a moving market is also the easiest one to interpret.

How many people need crypto-currency today? Except for a few perpetual travellers and dark-net customers, I assume no one really needs crypto right now.

Sure, people use crypto to hedge against weak currencies, they try to improve their personal situation but if they are looking for the perfect medium of value transfer, Bitcoin, Ethereum or IOTA are not the technology they need in order to buy groceries, electronics, or to pay their bills. Not yet.

The demand is almost solely composed of speculators, short-term investors and those who heat the bull-market oven.

So, if you want to distinguish between an organic bull market and one that has been pumped with speculative energy alone, just remind yourself how many people really pay with crypto-currencies in their daily lives.

That being said, I think we can agree on an artificially pumped market that has been fed by the “dumb money“, also by expectations, greed, and naivety.

What can we do in order to get investors back into the system now that a big part of the dumb money is gone, presumptuously forever? I find an answer to that in the last part of this opinion, but you won’t like it.

The trust that has been lost in the last weeks is a currency we can’t generate with high hashrate but with honest information and an honest ecosystem that doesn’t only benefit the experienced traders.

This takes time. Warren Buffet said some interesting things in his lifetime. And no, this one is not about investment.

It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”

That being said, we shouldn’t exploit and exhaust this new market, because it could generate benefits for everyone, but we pay with reputation, a currency we can’t afford to lose in times of socio-economic tension and dangerous climate forecasts. We need the innovation ‘distributed ledger technologies’! But we don’t organize this new era efficiently in order to make it happen as fast as we need it.

What’s really happening is the contrary. Countless Wallstreet companies, ex Goldman-Sachs speculators and numerous Venture Capital companies are joining this ecosystem.

Only short-sighted investors should be happy about it.

Self-fulfilling prophecies

If you repeat it often enough, you can create your own reality.

Very influential people use their position. -of course, not a new phenomenon.

Coinbase CEO Brian Armstrong (220.000 followers) tweets:

Some other self-fulfilling prophecies are created by Venture capital investors such as Chris Dixon (582.000 followers on Twitter):
Venture Capitalist Chris Dixon Believes Bitcoin Will Hit $100k

Or even social media/yellow press cadaver such as John Mcafee who proclaimed that:
1 BTC will be worth $ 1 million by the end of 2020” – fans even created a website in order to push his prophecy.

In times of falling prices, an interesting example of how the ‘Wallstreet mentality’ was carried into this new ecosystem is that every market movement is explained and accompanied by quotes from successful investors, usually bullish.

The quote we all are sick of is Warren Buffett’s: “Be fearful when others are greedy and greedy when others are fearful.” And it’s commonly used by investors that want to change the market back to a bullish sentiment because their portfolio shows red numbers in times of falling prices and a bad outlook.

A better quote by Buffett is: “Honesty is a very expensive gift, don’t expect it from cheap people.” Cheap people, that are only in here to fill the wallets they created at Deutsche Bank, Western Union, HSBC, JP Morgan. The bad guys, or not?

And that is the wisdom we should stick to in cryptoland because the appearance of good news, hype and promises correlates with the appearance of people that could earn a lot of money if the mass market would follow their “instructions” and buy crypto.

Right now, no one knows how crypto-currencies will take a place in our daily lives, especially because these global protocols don’t meet the expectations of governments, which are looking for financial tools that go hand in hand with tax-regulations, transparency and control of the cash-flow.

As of today venture capital analysts take advantage of an unregulated pot of gold that promises an insane return on investment in a short period of time, faster than regulation can follow. These VC-investors act faster than the law so to say.

That makes this ecosystem so dangerous for new speculators that rely on crypto mainstream media such as Cointelegraph and Coindesk, which also happen to be in the hands of big venture capital companies from New York and London.

Lightspeed innovation doesn’t come without issues.

Depression

As a result of the shark-pond investors, the pillaging of investors and the hypocrisy of “mainstream media”, at some point, the overall bullish sentiment will hit a critical mass of bearish sentiment, harsh regulation and the wrath of uninformed investors that have been squeezed for years. That is the price we all have to pay because we allow vultures and hyenas to sit at the table before the herd has been fed.

Cryptocurrencies will enter a dark time if we allow venture capital sharks from the financial Mordor to apply the same rules to crypto that were responsible for the global economy-crisis in 2007 and 2008.

Margin trading, a Dollar backed crypto, Tether, that is used to pump the markets, mainstream media in the hands of investors and missing regulation that benefits the smart, big money only.

We shouldn’t underestimate the bubble of ICO’s we create, with private A rounds for VC companies and influential parties only, exchanges without trading fees and cryptocurrencies that supposedly strengthen privacy, but are used to wash money.

The majority of initial coin offerings create money out of thin, hot air. 30 million coins are created, one token costs $5 after the first investment round. We just created $150 million worth of technology with nothing behind it. And the first investors, the VC companies benefit and drink whiskey on the rocks from the frozen pool people are standing on, before they realize how thin the ice really is.

Arguably the most important investment quote of all time is Benjamin Franklins: “An investment in knowledge pays the best interest.

Knowledge is a scarce resource in a field that is about cryptography, math and economic relations. New people instinctively visit social media and look for influential persons with a huge number of followers, to check the legitimacy. If that person is the owner of Coinbase, Coindesk or other Venture Capital owners, I guess the outcome is clear.

People should take their time before they decide to put their money into crypto because if you follow the crowd, the headlines and quotes, you will end up investing after October.

Necessities

The evil word, not enough people accept as a necessity: Regulation. But after 9 years of innovation, we have enough evidence that regulation is important.

No? You might think that only a free market can work. If we stick to the old rules and accept inequality and financial black holes with no further meaning to the world, yes. Then we should continue.

If we believe in the creation of value, that benefits the majority of people, if we believe in a future of recreation of value, we should handle things a bit different.

We shouldn’t regulate “John Doe” though, but the financial actors, VC companies, exchanges, the big players. No one needs 300 million Dollar capital that has been created out of thin air and ice. It’s practically impossible to spend that kind of money in a normal, even in a luxury life.

If we don’t regulate this perversion, we accept sharks and a mass drowning.

So yes, we should regulate:

-Return on investment in ICO’s, in A round financing.

-Exchanges

-Venture capital companies

-We should investigate which players are creating the news because we cannot allow mass media that claims to be neutral when in reality, they follow the playbook of the great whites from New York and London.

-The media should be forced to use a certain standard that reveals the investments from the owners. In every article. If there are conflicts of interest, it should be regulated by law, that those are communicated transparently.

Would you accept ” ‘Green-news’  – the independent magazine about sustainability and fossil fuels“, if it was owned by the OPEC?  I doubt it.

But many people accept “CoinDesk is the leading digital media, events and information services company for the crypto asset and blockchain technology community. Its mandate is to inform, educate and connect the global community as the authoritative daily news provider dedicated to chronicling the space.” owned by the Digital Currency Group, Grayscale Investment (the same actors that are unequivocally connected to competing projects that attacked IOTA with false claims). Other Magazines are similar and also supply the ecosystem with questionable information. If you don’t have a problem with that, you deserve to lose money.

-ICO regulation. 15 developers don’t need billions of Dollars.

We shouldn’t accept ICO’s like EOS with 4 billions of investments, yes you read that correctly, four thousand million Dollars before the technology is built. That inherits chaos and an eventual bad ending. You don’t need to study economics or math in order to see that this is unnatural. There must be losers in a calculation like that. The losers are we, those who want to benefit from crypto-currencies in our daily life, with innovative technology, organic growth and adoption and of course, new investors, the dumb money.

If we want natural growth, an organic bull market, then we need to delete VC companies and ruthless actors from the equation. Because if not we carry the old problems into the new system, which could be the key component to solve severe issues in the supply of wealth in the near future.

In my opinion, the next bull market will determine, if this market will hit the critical mass of problems which were created by bad actors or if we see healthy regulation in order to protect normal investors and adoption.

I, personally, expected that the next bull market starts around August/September and I was wrong. Seems like the amplitude of the old bubble is still active and a longer sideways-phase follows.  Please be careful with articles (even with this!)  and price predictions you read in social media and crypto-magazines. Don’t feast with sharks.

The big bear market 2018, memories of 2014 and a comparison

The big bear market 2018, memories of 2014 and a comparison

The recent bear sentiment in the cryptosphere is everything but appealing.

If you decided to buy into Bitcoin or another crypto-asset around Christmas you likely lost 50-70% of your investment which is a catastrophe if you compare it with a normal asset or a stock.

In cryptoland, however, things work differently.

Back in 2013 and 2014 when the first big crypto bubble catapulted Bitcoin to slightly over $1000 the investment mania, the FOMO (fear of missing out) into cryptocurrencies started and is our daily companion since then.

One could say that everything we see on the charts today is completely the same as back in 2014 with the difference that today, billions of dollars more are in circulation.

Today is surely a day where we could assess the market and say: “it’s almost only going up from here”, and at this point, we might forget that we still see a total market capitalization of over 300 billion Dollars.

So technically spoken, we are still in a crypto bubble, compared to 2014.

New investors tend to overlook the fact that the overall market-capitalization has grown so much, that even minus 20% still make it a win situation for those who invested before 2017.

December 2016

For reference, the total market-capitalization December 2016 was lower than 20 billion Dollars (as a reminder: that includes all cryptocurrencies of coinmarketcap):

If we complain that we’ve fallen to under 300 billion capitalization we should be grateful that we don’t fall back to 17,7 billion cap (Dec 2016), which is just a bit more than the total value of Bitcoin Cash at this point.

Since the market has fallen tremendously for three months now, many chart analysts praise to have found the bottom of the bear at these levels but since we still hover around 300 billion cap, we should look at the reasons for the extremely high value of all combined crypto projects, instead of relying on technical chart analysis.

And the reason is simple: adoption, the most valuable asset of investors.

Adoption

Adoption relies on the following:

-unique features improve business models that attract new companies.

-an ecosystem creates a flourishing market that attracts investors.

-stable characteristics of a technology improve trust.

-improvements to life are visible to the layman.

-proper education of pro and cons for everyone available, not only in English.

-decentralization improves conditions against a single point of failure, that also applies to flash-crashes of the market.

-technologies and involved actors should be transparent and open for audits and reviews.

Today

Every single point for adoption has vastly advanced over the last 4 years a result of development and diversification. Of course, no project is perfect and reached its destination, but in cryptoland investors invest in the expectation value and not into the value of functionalities or properties right now, like oil or noble earths.

Compared to the long bear market beginning with 2014 when the hack of Mt.Gox triggered a long period of low prices and negative press about Bitcoin et.al, today, we have a serious level of adoption and many promising features that can be beneficial for everyone.

We can expect more than in 2014.

We have higher trading volume, way better options to exchange fiat-currencies for crypto-assets, way more options to spend cryptocurrencies on real-life products and most importantly, we have companies that explore the benefits of these new technologies.

Distributed ledger technologies are here to stay, the recent regulations that have been declared in the US, the European nations, and South Korea are everything but bearish.

It shows that the world has become aware of the perks and possibilities of blockchains and DLT’s.

Therefore I don’t expect a year lasting bear market like in 2014 because the sentiment clearly has changed.

Now it’s up to people in this sphere to work on transparent progress that solves some problems of the world.

My personal take on investment is: follow the best technological features and adoption, the rest is gambling.

Bitcoin Will Inevitably Lose Its Value, IOTA Will Take Over

Bitcoin Will Inevitably Lose Its Value, IOTA Will Take Over

The following statements, backed by scientific papers, technological and geopolitical, illustrate how Bitcoin will inevitably lose its value.
IOTA was conceived and designed with a vision further into the future than most of us can comprehend. Its features will turn into major benefits as time progresses and it is a question of when, not if, IOTA will take over as the standard in cryptocurrency and industry 4.0.
What limitations will be the death of Bitcoin and the uprising of IOTA? Though you will not find a defined answer to that here, my commentary and facts I present should authenticate this opinion.

Is this article FUD?
That’s hard to determine because fear, uncertainty, and doubt have become anything to an investor that threatens his investment. First and foremost an investors ignorance is the main culprit of FUD.
This, of course, also applies to IOTA supporters. Cryptoland and its effects, in general, have the ability to transform investors into raging mobs that ignore facts, reason, and humanity, just to protect their funds and hopes of a big return on investment.
Bandwagoning is a phenomenon that goes beyond rationality.
Ad hominem, blatant lies, death threats, I’ve seen them all. But one thing is for sure: the truth always wins.
Is this article filled with logical fallacies, bad anecdotes or lies? No, because I don’t like misinformation. Since I’m a subjective being (and also invested in IOTA), it should be evident that my fact-based opinion can’t be completely objective.
Whether or not there is an incredible number of competing projects, magazines and investors that are spreading lies and false claims about IOTA, this article is not about creating deception, it is just my honest point of view.

As long as there are no major technical flaws (which can happen to every cutting-edge technology), there are a plethora of reasons why IOTA will eventually overtake Bitcoin.

Satoshi

The incredible whitepaper in 2008 opened a world of wonders.
With a new perspective on transferring money, we experienced the first sign of real emancipation from the big institutions that fostered inequality and a world where the power was not in the hand of the people.
Despite rules/laws that prohibited such concepts, when humans all over the world received a tool to share their wealth, they were finally granted sovereignty over their possessions.
I think all cryptocurrency investors can agree on these points or at least use them to newcomers why they invested.

Since then, the ideological component of cryptocurrencies has been drowned in a sea of greed, return on investment and proclamations of “when Lambo“.
Bitcoin, the currency that was created from the whitepaper of Satoshi Nakamoto, is different than “a peer-to-peer electronic cash system” in many regards.
Some other changes were implemented because game-theoretical aspects needed to be included, such as the small block size. Some others are changed to account for the growing number of users that congested the network.
The biggest change of the technological nature, however, was that people became aware of the monetary advantages Bitcoin introduced.
Hard-forks, specialized mining hardware, bandwagoning, social media manipulation, smear campaigns, and hacks are the daily madness we all are aware of.
The incentive to earn money is so big that the initial ideological dream, the democratic advantage, and most importantly the technological advancement is almost completely ignored to a point where Bitcoin doesn’t fit into the real world anymore.

Mining Issues

Mining is a vital part of Bitcoin’s consensus and creation of the currency. IOTA has no mining. For several reasons.
IOTA cannot function because there is no monetary incentive to run a full nodeby Anon.
This assumption turned out to be false given that the number of full nodes, including Nelson nodes is higher than 5000 already.

Bitcoin is proud to be the most secure project. There is no other project with a higher number of developers and a longer time-frame where bugs and problems have been eliminated. That is a truth that every investor should acknowledge.
There are hundreds of projects, dozens of wallets, countless corrected bugs, and a journey that has undoubtedly proven that Bitcoin is not hackable. Not anymore.
The consensus is decoupled from the user.
The holy trinity of Bitcoin’s consensus lies in the miners, validators, and users.
Mining in Bitcoin gives the network its blood-pressure and nutrients, but the heart grows too big.
The hash power is growing exponentially because the rising user-number and the incentive to earn money with mining follows the mainstream adoption.
More and more people and companies, even hardware giants like Nvidia and AMD start to specialize in mining cryptocurrencies.
That is an ecological tragedy and a centralized point of failure masked as an advantage and technological progress.

Bitcoin global hashrate

Mining, right now, is mostly performed in countries with low prices on electricity. China, Iceland, India. The power that is used comes primarily from fossil energy sources such as coal and oil. Mining farms look for maximum profit.
It is a reasonable assumption that even in the future, they will use the cheapest energy source.

Iceland, however, experiences a different problem. The geothermal energy that is used to mine cryptocurrency is a limited collected source. Additionally, the electric grid is pushed to its limits right now.
Politicians from the Icelandic pirate party stated that: “The value to Iceland … is virtually zero.” -as even almost no taxes can be derived from that. The opposition is growing.

Also, the consumption of energy from vulcanoes still heats up the atmosphere. It may be renewable, but it’s avoidable heat for the atmosphere. An ethical and technological regression.

These examples show that political decisions can shut down major parts of the hash power at any point, given that the incentive to mine threatens the environment and the electrical grid.

Bitcoin key statistics of mining

These aspects apply to all other minable projects as well. An incentive to use cheap electricity for revenue is a dangerous path, not a technological advantage.
Since IOTA has no mining, but a small proof of work, the electrical consumption can solely be created in renewable energy-clusters in every city and area in the world. “Zero margin electrical power” can support IOTA that is functioning in a multi-connection distributed mesh net.
The incentive to use a global standard for data/value transfer and data integrity is a way better solution, both more efficient and politically accepted.
Since there are no centralized mining farms nor fossil energy usage, IOTA will be used everywhere, while Bitcoin will face serious problems.
Additional information on the energy consumption and the ecological footprint is written here.

As the last addition to this section, I want to highlight that Cogniota, according to developers of IOTA, will make it possible to sell hash power for computational services. This incentive combines two major advantages: IOTA can incentivize parts of the mining industry to sell their hash power in order to solve actual problems, rather than an exchange of money.

Scaling Solutions

Scalability is not just a buzzword that has minor impacts. It determines if a currency can be widely used in the future or not. IOTA is theoretically infinitely scalable (as far as bandwidth it allows)  due to its unique consensus mechanism.
The lightning network (LN) will equip Bitcoin with payment channels that will enable billions of transfers, without fees. This is the missing piece of the puzzle, according to the Bitcoin evangelists.
Payment channels are a new approach that Bitcoin and Ethereum are exploring as the mainstream adoption leads to enormous transaction fees and transaction queues.
For now, the solution is in development, but we clearly understand that it is a necessity.
Those who used Bitcoin in December know that a solution is desperately needed as the transaction fees went insanely high.

Three problems, though, blur the hope and expectation the community has for LN.

  1. The block size is limited. The opening of millions of channels will lead to congested blocks again. It isn’t true scalability, just a sophisticated procrastination.
  2. Fees for closing the payment channels are an additional factor that hinders true adoption.
  3. Centralized hubs (like exchanges or big services) will be a possible threat to consensus according to Jonald Fyookball

That means that even if LN will work as intended, the development will still not be finished.
On the contrary, an additional step will be an assessment, whether or not a hard fork has to be performed that offers bigger blocks. In the case of full spread mainstream adoption, even the LN won’t grant full scalability like IOTA offers.
It is not possible to open an infinite number of payment channels, as the block size is too small right now.
Also, closing a channel and synchronizing it with the mainchain costs transaction fees.
In a world of microtransactions, transaction fees, even if they are small, are a threat to businesses and the majority of use-cases.
An exemplary calculation of transaction fees with present systems can be found here.

My conclusion is: Bitcoin will not work in an interconnected world, IOTA will.
Additional concerns about mathematical proof that Bitcoin cannot run decentralized with the LN have been raised, but it’s still inconclusive whether that is true or not.
The bottom line is: Bitcoin is trying to develop something that IOTA already owns.
Zero transaction fees and true scalability.
On top of that, IOTA has already flash channels which are bi-directional, feeless and extremely convenient. That means that IOTA combines far greater on and off-chain load capacity but Bitcoin still needs to find out if LN is feasible at all.

Adaptivity For The IoT

Mesh-net capabilities in the Internet of Things will have several characteristics that contradict Bitcoin’s functionality.
The economy of the future will eventually happen in local industrialized clusters, as smart cities will create economic islands of data and value streams with millions of devices each.

The effects of economic clusters can be further comprehended here in “A Historical Approach to Clustering in Emerging Economies” from the Harvard Business School (2017).
These clusters will have a demand for a DLT that is capable to function in this special environment.

a) Geographical distances will create latencies that are comparable to asynchronous networks. The network topology will represent the streets in a mountain chain with several connections (with remote parts) that are not always connected to the rest of the network at all times.
Bitcoin, therefore, needs a functionality that enables offline chains. Right now, this is not possible because the Lightning Network is neither ready nor fully suitable for mainstream adoption, as outlined earlier.
IOTA, however, can work in this environment, because offline chains are part of its architecture. The synchronization of offline chains has no disadvantages and can be performed with flash channels or normal transactions.

b) Transaction fees for microtransactions

c) If IOTA works as intended, try to come up with a use-case that is unfitting for IOTA, but perfectly suitable for Bitcoin.
Since I had no success in finding the answer, I can only deduce that IOTA will be chosen over Bitcoin because the advantages are obvious.

The impact of the IoT on the global economy can be inferred when taking a look at McKinsey’s latest assessment:

10-15 trillion dollar market according to GE and McKinsey until 2034

I conclude that the technology with the best abilities will likely be able to take the biggest part of the market capitalization.
It remains to be proven if Bitcoin will survive solely with a functionality as “digital gold” -without intrinsic value. That would mean that Bitcoin would cost millions in mining and fees but had no unique feature.

Shor’s Algorithm

Quantum computing is a threat to cryptography as we know it. Though it is not yet suitable to decipher algorithms used in Bitcoin and other cryptocurrencies big advances have been made, especially with the big D-wave 2000Q quantum computer that already has 2000 Qubits. Since the D-wave is solely focused on reverse annealing, it cannot be used for integer factorization or other applications.

Reverse annealing allows users to specify the problem they wish to solve along with a predicted solution in order to narrow the search space for the computation. The predicted solution may be a result of a previous quantum or classical computation or an educated guess. But it is not suitable for an efficient integer factorization that is needed in order to find collisions on standard cryptographic schemes.

Other ventures though, such as the IBM Q project with already 49 Qubits, which can be used for integer factorization, show a rapid and exponential rate in this field of quantum computing.

Timeline of available qubits

It turns out, that Moore’s law also applies to the field of quantum computer. According to this whitepaper by Aggarwal et.al. suitable quantum computer could be available even faster than expected.
If a quantum computer with a sufficient number of qubits could operate without succumbing to noise and other quantum decoherence phenomena, Shor’s algorithm could be used to break public-key cryptography schemes such as the widely used RSA scheme.Edward Gerjuoy (2004)
Same applies to the secp256k1 elliptic curve in Bitcoin.
That means that the necessary number of Qubits that can perform an efficient calculation of the Shor’s algorithm with a negligible amount of quantum error calculations can be available in approx. 6-7 years.

Since cryptocurrencies are not used in our daily lives to buy groceries, the majority of investments are due to the expectational value of cryptocurrencies as a whole.
That could mean that if there is a reason to doubt Bitcoins success, such as fundamental breakthrough’s in quantum computing, the expectation value can vanish and thus, decrease Bitcoins value immensely.
This point on my list is certainly not the most conclusive one because it is said that solutions could be implemented rather quickly, but the comparison to IOTA raises an additional question:
Why would we use a technology that will soon be rendered insecure, that needs adjustments to work again, when we already have a possible solution with the Winternitz algorithms that are used with IOTA?

The tradeoff right now is that addresses shouldn’t be re-used, but with the upcoming Trinity UCL wallet, people will receive a big portion of usability and security for the post-quantum era.

Hope ≠ Reality

“Shilling” describes the nature of cheering for your investment. All kinds of reasons are brought up in order to emphasize on how good this particular investment is. Everyone does or did it. Bitcoin, Ethereum, IOTA, Nano, you, me.
These arguments and word fights are common, boring, and unnecessary, yet everyone does it and everyone thinks they have a positive effect on the global cryptocurrency price.
Bitcoin especially has a major advantage that on the other side, doesn’t reflect the reality: The network effect.
There are by far the most people invested in Bitcoin. It’s impossible to determine but Bitcoin has been around since 2010, generally speaking. Since then, tens of millions of people have invested on countless platforms.
If you ask a person in an urban area what Bitcoin is they usually answer: “Internet money”.
This fact is largely true because Bitcoin has been used online for e-commerce services for years already.

Since most people are invested in Bitcoin, we normally see the most shilling for BTC in social media. This fact has nothing to do with its functionality or innovative quality. It is solely because many people know it, and many more are invested in Bitcoin than in all other cryptocurrencies.
Another factor is that Bitcoin is still the reference currency for the entirety of cryptocurrencies.
If Bitcoin’s price falls, 99% of all projects fall too.

In the future other coins will become more accessible and liquid through fiat pairs, therefore negating much of their dependence on Bitcoin. The future demand for Bitcoin will drop.
IOTA demand, on the other hand, will explode with a growing number of real-world use cases, industry adoption, and it’s capacity to offer a new standard.
This means that the true innovative value of currencies cannot be compared with Bitcoin because of the high number of all biased “judges” and the social media indicators that show how many people like a crypto project. Bitcoin owns social media. But IOTA owns the best tech.
The one-sided coverage of negative events and criticism of IOTA is a big sign that the landscape is highly biased. But the truth is: companies and institutions do not care about shilling, memes, and likes.

The Adoption Race

The most conclusive point, and the one that needs no additional explanation.
What IOTA lacks in ease of use it certainly wins and solves in adoption and innovation.
The number of companies that are convinced that IOTA is the solution, is by far higher than in any other cryptocurrency, including Bitcoin. IOTA has already won this adoption race, which is the most important race. In a short time-frame of 2 years.
Bitcoin is in an anti-adoption period right now, a problem that arises from transaction fees and transaction queue.

Under these conditions, IOTA will take over the market capitalization of Bitcoin sooner or later. It’s inevitable.
Use-cases such as micropayments, data marketplaces, data integrity, Q (a secret project the foundation is working on for 4 years) and the incentive to use hash power as computational power are the knockout for Bitcoin as soon as these applications are working.
Since expectational value is created long before these use-cases are actually deployed, I expect a major bull run right after the announcement of Q.

When I combine both projects and problems, I don’t see much room for Bitcoin, as its problems are way bigger than IOTAs’.
Bitcoin is still no closer to achieving its vision after 9 years of development. Yet we see IOTA rapidly progressing to a production ready state for multiple applications in the near future.

Usability issues on IOTA’s side versus architecture-flaws on Bitcoins side. Bitcoins time is running out.
A bigger network effect and shilling cannot change that.

 

 

Thanks to Ryan and Izelkay for editing.


Concerning IOTA problems and controversies:


1) Centralization of the coordinator:

David Sønstebø addresses the road-map and status quo here (at 29.00min):

He also explains that IOTA is exploring the ternary system, but they can go back to binary at any time.

The first comment under the interview gives timestamps for all discussed topics.

 

2) Concerning Reclaims:

3) Additional concerns, including wallet security, address re-usage, etc.

FUD Copy Pastas from Iota

 

Blockchains, Bandwagons and Chances.

Blockchains, Bandwagons and Chances.

We believe that the economy works best when it works for everyone, and this new platform is an engine for inclusionDon Tapscott,  ‎Alex Tapscott in Blockchain Revolution

The majority of active members in Cryptoland share this vision, one way or another. It’s quite rare to see that people are in complete agreement, in unison, when it comes to innovation and possible prospects of a technology.

It seems like the field of Blockchains is such a rare case.

8 years ago, 2009, when Satoshi uploaded his whitepaper for the Bitcoin, nobody knew what a Blockchain is.

Bitcoin? Isn’t that this weird Internet money? A way to buy drugs, anonymity, emancipation, a way past the banks. Who knows.

The last years have shown, that these decentralized peer to peer systems can be helpful in many regards.

We can share information, values or we can make contracts, and no one needs to rely on the authenticity of a signature, made by the contractors, bank employees or whoever is part of the deal.

We also can become millionaires in a blink of an eye.

The Blockchain seems to be an overwhelmingly potential thing, and people start to realize that this piece of technology is here to stay.

We all had this moment when we met old friends and we talked about our career, hobbies, what are you doing right now?

Blockchains

At this point, we do not explain all 1471 cryptocurrencies. We also don’t explain proof of stake, BIP148, hashes, or scalability. But we boil it down to: “a great new technology, that could be beneficial for all of us“.

Yes -eventually, Blockchains or distributed ledger technologies (DLT) will shape the technological landscape of the future for the better.

Over the last years, the great vision of blockchains was dyed in humanity. 

You can easily check for yourself: go to Twitter and look for #bitcoin , #ethereum or #iota and read the first 20 tweets.

It seems like reality in social media channels doesn’t reflect the great vision of a future, built on blockchains, that we all believe in.

Bitcoin is great, who needs Ethereum?

IOTA is a scam, fuck those altcoins!

If I were you, I would invest in Pumpcoin, you heard it here first. 

The homo oeconomicus dominates the majority of communication of Blockchains. We do believe in Blockchains, as long as it is our Blockchain, we invested in.

What hypocrisy.

The reason isn’t really mindblowing.

People know that the cryptocurrency-tsunami of investments will be a stepstone for a new generation of millionaires, and they also believe that the more they communicate and advertise, the higher the chances are that they are surfing straight into the six and seven digit Dollar club.

That, of course, doesn’t tell us anything about the technological perks, the technical quality of the system they are cheering for.

We can replace all those tweets, texts and messages with “Buy ***coin, make me rich, please”.

That works in 99% of all cases. At this point, I recommend you go to Twitter and look for #bitcoin: Link.

And there are millions a day. Cryptocurrency/Blockchains have become “the game of pump“.

The incentive of earning money is way higher than supporting the technology itself.

That leads to the neverending brigading, FUD’ing and lying, regardless of the truth.

It also leads to forks, mining conglomerates, and divided communities.

People create useless forks, they create special vocabulary that sounds meaningful, or they write long, technical blog posts where they compare the old system with their new, better Blockchain with a fancy logo or a quote of a renowned person, that vouches for the upcoming initial coin offering (ICO).

People collect hundreds of millions of Dollars, for a 5 head developer-team.

The innovation, luckily, doesn’t take place in social media channels and is not equivalent to the initial amount of investments. It happens behind closed curtains because partnerships are behind NDA’s, in most cases.

If you invest in Blockchains, invest in the technology, the team, the prospects and the advantages it has over others, despite what social media writes on a Thursday in November.

If you follow social media channels, you may take short-term gains, that are based on emotional market-reactions, but the best strategy is looking for the best tech, your favorized project and to hold onto it. For years, if necessary.

This is not a cheerful article for IOTA, this is just a reminder, that we should not lose the aim for all of this. This is greater than our purse, so let’s not reduce it to a Kardashian’esque reality soap.

Needless to say, I’m looking forward to times, when exchanges, ICO’s and crypto-industries are regulated by governments. Yes. Governments. They are here to stay anyway. Maybe for taking part in the technical and neutral maintenances of these systems, while they provide 10% of the hashpower for earning parts of the currency.

A self-sustaining task, that would fit the government while people and companies could use these distributed systems for their purposes.  Just an idea of a solution for a disrupting innovation. Same could work with banks. They couldn’t stop the network, but they could become a useful part of it.

We need to accept banks and governments because unregulated systems lead to game-theoretical circle jerking, where everyone works for himself.

Why? Because the image of Satoshi’s vision implied improvement of life, emancipation for the people, we either believe in it, or we reduce that to a flowery phrase that fits right into the buzzword banter of investors.

He didn’t want to create a playground for ludicrous investors, cryptocurrency casino web pages, pump & dump groups or emotional discussions on Reddit, that are solely aiming for changing the sentiment of a cryptocurrency.

What we need is an education for our future. A solid comprehension for the possibilities of cryptocurrencies, not investment wise.

Bitcoin is already used in countless countries. The value of a BTC is over $7000, as I’m writing. Is the value of one bitcoin important? Not for the innovation.

Apart from the price that holds investors captive, Bitcoin is used as a standard currency already. Over 330 ATM all over the world make it possible to use Bitcoin in people lifes on a daily basis.

Currencies are one field, technological advances for the producing industry is another.

These technologies are not just objects of an investment game, they are part of a paradigm shift on a global scale.

Foxconn already communicated that ~300.000 of their 400.000 workers are replaced by machines in the near future. Distributed ledger technologies are on the verge of being used everywhere. 

The World Economy Forum in Davos hosted presentations and discussions for over 2500 managers, thought leaders and scientists.

They debated about networking, big data, robotics, automation, artificial intelligence and the Internet Of Things. Better known as Industry 4.0.

Ask any company, bank, government for the importance and disruptive impact magnitude of distributed ledger technologies. They already know that for years.

The Deutsche Bank released parts of an internal study with an intimidating result: For the first time in industrial times, an industrial revolution will destroy workplaces instead of creating them.

A heavy transformation for industry and society.

We don’t need Tradingview, bots for margin trading, or hashtags with edgy love-declarations for a coin.

We need solutions, to integrate these systems in the financial and industrial infrastructures, to embrace the coming century.

This enabler tech could bring basic wealth for every region on the globe, it could transform the energy sector, revolutionize the sharing or exchanging of value, it could enable a new, stable form of democracy and shift our society from a purely antagonistic, hedonistic, to a thriving, thinking, sustainable society.

We are taking part in interesting times that possibly change the way we live and work on a global scale, forever.

We should accept them as such and use innovation to make it happen, in the best way possible, instead of advertising innovation towards our own pockets.

Don’t get confused in the social media madhouse that chases profits.

 

Revealed Business Connections of IOTA

Revealed Business Connections of IOTA

Market capitalization of a cryptocurrency is the best indicator to show which project succeeded the most. 

…this sentence is not true.

After years of pump and dump, history has shown that only real-world adoption counts, that real connections to businesses make a difference.

To give you an idea on how far IOTA has come, I set up a list of known collaborations or business connection of IOTA.

Important: The following list also includes partnerships with members of the Decentralized Identity Foundation(DIF) and Trusted IoT Alliance,

-> so there is not necessarily a direct collaboration.

It’s just a matter of time and NDA’s that this list will grow.

What we already know is incredible, but there are some connections we don’t know yet, and considering what the IOTA foundation already has accomplished, I can only assume that this is just a fraction of what’s behind the curtains.

I, therefore, do not guarantee that this list is complete or that it’s reflecting the reality. 

This list only shows revealed business connections and is not officially approved by anyone

This list will be updated when I get new information:


Accenture (via DIF)

Alpha Venturi (via Foundation)

Augmate

Authenteq (via DIF)

Bayonet (via DIF)

Beth Israel Deaconess System (via Foundation)

BigchainDB (via DIF)

Bitse (via TrustedIoTAlliance)

Blockchain Helix  (via Bundesblock)

Blockstack (via DIF)

Bloq (via DIF)

BNY Mellon (via TrustedIoTAlliance)

Bosch (via TrustedIoTAlliance)

Brainbot (via Bundesblock)

Bundesblock (http://t3n.de/news/blockchain-wirtschaftsstandort-831376/)

Canonical (via TrustedIoTAlliance)

Ccis

Civic (via DIF)

Cisco (via TrustedIOTAlliance)

Consensys (via TrustedIoTAlliance)

Consent (via DIF)

Chronicled

DANUBE Tech GMBH (via DIF)

E7 Ventures (via Foundation)

EU Commission (via Foundation)

F6S

Filament (via TrustedIoTAlliance)

Foxconn (via TrustedIoTAlliance)

Freeelio  (via Bundesblock)

Gemalto (via TrustedIoTAlliance

Gem (via DIF)

Gnosis (via Bundesblock)

Harvard Medical School (via Foundation)

Huawei EU (via social Media, rumors)

IBM

ID2020 (via Foundation)

IDEO (via DIF)

Innogy (via Foundation)

Imperial College London

IPDB Foundation  (via Bundesblock)

IRTSystemX

Jolocom  (via Bundesblock)

Ledger

Luxoft

Microsoft

Mooti (via DIF)

Netki (via DIF)

New Mobility Consulting

NewMobilityLab (via Foundation)

Norwegian Centre for E-Health Research(via Foundation)

Procivis  (via Bundesblock)

Olso Medtech (via Foundation)

Oslo Cancer Cluster (via Foundation)

Outlier Ventures

Peter the Great Saint-Petersburg Polytechnic University

R3 (via DIF)

RSA (via DIF)

RSKsmart

Satoshipay

Seedlab GmbH (via Foundation)

SINTEF (via Foundation)

Skuchain (via TrustedIoTAlliance)

Slock.it (via TrustedIoTAlliance)

Sovrin (via DIF)

Taqanu (via DIF)

Tierion (via DIF)

UBUNTU (via Canonical)

UC Berkely

University of Lancaster

UC London

UN (over ID2020/Foundation)

Uport (via DIF)

Whitechapel Think (via Foundation)

World Energy Council (via Foundation)

World Economy Forum (via Foundation)

ZipPower (via Foundation)


 

This list will be constantly updated, so take a look once in a while,

Limo