Welcome back to our discussion of IOTA and tip selection within the IOTA Tangle!  In the first two parts about Tip Selection, we discussed two methods that are…well, less than optimal for the network to operate effectively at scale.  The first method we looked at was the uniform random tip selection (which can also be referred to as the “random walk”).  Next, we looked at the unweighted random walk, taking another step (pun intended) closer to the optimal solution but not quite making it there.  This post is going to cover the weighted random walk and why it is the best way to perform tip selection within the tangle. 

What is IOTA Tip Selection

Let’s take a second to recap what we’ve learned so far.  If you haven’t read what we discussed on tip selection yet, feel free to pause and check out Part 1 and Part 2 to get up to speed with some of what’s going on.  Remember that a tip is simply an unapproved transaction on the tangle.  While IOTA is technically free to use, there’s still no free lunch here:  before a transaction can be finalized in the network, the node placing the transaction must approve two prior transactions (those which have occurred at some point in the past). 

But which transactions should the node approve? 

This has been the basis of our entire discussion as some methods of choosing tips within the network could lead to delays or instability.  Part 1 showed us that randomly choosing any tip on the network could be highly ineffective in allowing the tangle to converge and remain cohesive.  Part 2 introduced the concept of a walk along the tangle – this is quite necessary in producing an effective tangle.  Nevertheless, without a weighting in the paths taken by the node performing an approval, the tangle could become lop-sided with some transactions having many approvals and others having little to no approvals.  What would happen if we extended this concept to include weighting?

Weighted Random Walk

Excellent question!  We already learned about the concept of a random walk in the last post, but what does it mean to add weighting to a random walk?  Before we look at specifics about IOTA, let’s probe this question in a very generic sense.  Pretend that we have three bags of groceries that we need to carry a few blocks back to our apartment.  As the cashier rang up the items, we placed them in the bags we brought.  As one bag got more and more full, we switched to a different bag.  Near the end, we started finding empty spaces in each of the bags that we could stash the last remaining small items. 

As commonplace as it may seem, this is the same concept as performing a weighted selection of which bag to fill.  One bag fills up, so its weight (both logical and physical) increases.  We choose a different bag eventually until the two bags are similar in weight and then proceed to the third bag.  At the end, we examine the appropriateness of each bag for each item to properly store. 

Weighted Selection

While this demonstration wasn’t random in nature, it was weighted. We didn’t choose bag 1 and put our entire load of groceries in it, carrying the other two empty bags home. Instead, there was a rationale behind which bag we chose based on how much it already had within it. Applying this concept to IOTA, as a walk is performed from the genesis transaction out to the tips of the tangle, there is a weighted approach that can be taken.  As one path gets used more and more (i.e., more groceries in the bag), it will have more of a chance of being chosen (which is the reverse of the bag illustration but stick with us). 

It’s important to remember that a different path still can be chosen – this is, in fact, a random selection – but it’s likelihood of being chosen continues to decrease the fewer times it is traversed relative to other paths. 

Lazy Tip

Let’s step back for a second and take another look at why this is so important.  The concept of a lazy tip is of interest.  A lazy tip is one that, instead of choosing to approve transactions near in time to itself, decides to just choose any old transaction from the network at some point in the past.  It’s referred to as lazy because it doesn’t care about what’s going on right now in the network; it chooses the easy way out by quickly finding two transactions, approving them, and moving about its business.  This doesn’t help the network out as more transactions continually enter the tangle and don’t receive proper verification (the more nodes that approve a transaction lend more credence to the transaction and increase the robustness of the tangle). 

Since we want to discourage this behavior, it’s important to find a method to bias the random walk.  The network designers formulated a method to discourage lazy actors on the network by introducing a cumulative weight to each hop in the walk. 

Cumulative Weight

A transaction that has been approved by more nodes on the network is given a higher weight and will be (probabilistically speaking) more likely to be chosen as nodes traverse the network.  Each time another approval is given to the transaction, the higher its weight becomes and the more likely it will continue to be chosen.  What happens to the lazy tip that decided it didn’t have time to contribute properly?  It may take a while before (or if) it ever gets approved.  Because a major “selling point” of IOTA is the quick transaction speed for IoT devices, this is a real disincentive to actors on the network.

Figure 1:  A lazy tip may take a while to get approved.  Image from the official IOTA blog.

Take a look at Figure 1.  Block 16 decided to lazily select block 7 to approve rather than contributing more intelligently.  As a walker is looking for a transaction to approve, it may eventually reach block 7 and be given the choice:  do I want to proceed to block 9, which has a ton of approvals behind it, or do I want to go approve the lone wolf, block 17?  Again, because this choice is random, there still exists a probability that block 17 will be chosen. 

But because the choice is weighted there will be a much better chance that block 9 is chosen instead.  It pays to be a smart contributor!  This is how the network is able to maintain convergence and stability – no one wants their transaction to receive no approvals or take forever, so nodes wisely choose to be a good team member.

Randomness Generation

If that were the end of the story, it would seem that things have wrapped up neatly and effectively.  But…there’s another facet to look at, one that perplexes even the engineers that have built IOTA.  Just how random is random? 

It may seem strange, but there’s a lot to unpack here.  We won’t go too deep into the weeds (since it can get off-topic pretty quickly), but correctly selecting the value for weighted path choice (which is commonly designated by α or the Greek letter ‘alpha’) is highly important to maintaining an effective tangle.  The most effective method involves a value for α somewhere between 0 (which is the same thing as an unweighted random walk like we discussed in the last post) and 1 (which is the exact opposite where the heaviest path is always chosen). 

What would happen if we chose α = 1?  Take a look at Figure 2 below.

Figure 2:  A super-weighted random walk.  Image from the official IOTA blog.

There are a ton of tips leftover that may or may not ever get approved.  What’s more, they are present during the entire duration of the tangle depicted.  It’s common that some tips will exist at the end of the tangle, but for many to exist throughout the network is troublesome. 

With a value of α = 0, we get the same thing as in Part 2 of this series.  There’s no rhyme or reason as to what may happen in the network without a weighted approach to random walking, again leading to possible instabilities or a lack of convergence of transactions. 

Figure 3 is more of what we’re looking for.

Figure 3:  A weighted random walk.  Image from the official IOTA blog.

Tip Selection

Each time a tip needs to approve another transaction, a weighted random walk occurs.  As time goes on, each tip eventually gets folded into the tangle and the process continues ad infinitum.  And they all lived happily ever after.  The End.

Well hopefully you enjoyed our “walk” down the tangle and have gained a better understanding of tip selection.  While at first it may seem like a simple proposal (“just choose any two transactions” you may have thought), we hope that you’ve learned a lot and better appreciate the work that has gone into developing and maintaining a stable network.  Next week, we’re going to uncover more about transaction confirmation and consensus in the network.  Until then, happy reading!

As we reflect on the past, it is important to figure out what really matters when it comes to pin pointing the reasons for volatility in the Bitcoin price. For instance, there is not a direct correlation between the months in the year and Bitcoin price movement with the exception of September. That is historically a bad month for Bitcoin, but other than that anomaly, it’s hard to pin point when the price will surge and when it will fall based on measurable indicators.

Some people look to network strength for the answer, others look to the charts, and others to traditional metrics like Fibonacci. But what about in the real world? What outside of the crypto market has the strongest impact on the Bitcoin price? Could it be government regulation? Lets discuss this on today’s blog, and what I think the best indicator for Bitcoin price movement is.

Nothing Should be considered investment or financial advice. Enjoy the ride.

What Impacts the Crypto Market the Most

There is no easy answer here for what to use as a Bitcoin price indicator. Obviously nothing will be the tell all, so it is hard to pin point something and call it reliable. Although people are constantly trying.

Some of the best theories for Bitcoin price movement right now are the Grayscale fund growth and Bitcoin Google search indicators. Grayscale is notorious for being one of the largest institution gateways for the wealthy to enter into a position on Bitcoin. Therefore, you would reasonably think this fund would effect the overall price of the digital asset. Sadly, these guys are professionals and almost exclusively purchase their Bitcoin through over the counter means. Long story short, they try their best not to move the markets with their investments by not utilizing public exchanges.

On the flip side, the Google search indicator is not controlled and can not be scripted. This is more of an organic measurement on the interest across the market in Bitcoin. Historically during times of extreme bull movements, these search metrics have been through the roof with people all over the world desperately trying to learn more about Bitcoin to see if they too should FOMO in at the top. This is no doubt a great indicator of past price movements, but sadly not a good indicator of future price movements.

Common Metrics Used By Investors

Based on a recent article by Cointelegraph, Some of the most common metrics used by investors are number of active addresses and the network hashrate. The thought process behind these metrics are that as the number of active addresses increases, so does the users or people using Bitcoin to send and receive payments.

More activity = More Demand

The problem with that logic is that mixing services that are used to clean Bitcoin, whales with hundreds of addresses and companies like gateway providers will distort this metric and basically make it unreliable. The second metric of the network hashrate will also vary greatly based on the current mining competition, technology, and the current position of the halving. For instance, right after the halving this metric tanked due to mining farms shutting down or switching to mining more profitable digital assets. This too clearly does not correlate directly with the Bitcoin price.

Now this article does give investors three metrics to dig into deeper on. This is to try and help cancel out the noise of these common metrics. These are those three metrics below:

  • Average exchange deposits
  • Bitcoin ‘sent from’ addresses
  • Miners to exchanges

If you are interested, go check out that article to learn more on these metrics increase your chances of outsmarting the market!

My Favorite Bitcoin Metric

Well, here we are. Full circle back to looking at what my personal favorite metric is for Bitcoin price movements. From my personal experience, the largest indicator of a huge move about to happen in the market is stagnation in the price.

Let me explain. When the Bitcoin price seems to hold at a reasonable level for a prolonged period of time, pressure builds. Either this pressure is upwards or downwards, but it builds. The largest market movements come suddenly, and typically after weeks of prolonged stagnation. I know that is not a “metric” per-say, but it is a clue.

To me this just means, if the market has not moved very much for a few weeks – hold on to your horses. Usually there will be a strong swing sooner than later of $1,000 – $2,000 either up are down. If this swing is not caught by the bears or bulls respectively, then it will usually continue for the coming month pressing further in the respective direction. That is typically how long these swings last then they are always followed up by a swing in the opposite direction for the next month. It is just the cycle.

I know this is not an “indicator”, but it more comes from just being aware of the market movements. If you pay attention, watch the price movements daily, you will soon too be able to feel when the market has been quiet for too long. Usually, that is the best time to capture gains or prepare to grow your digital assets.

Crypto Market Indicators

Thanks for reading on What Impacts the Crypto Market the Most. Really there is no perfect way to predict the price movements of Bitcoin. All you can do is be smart, HODL, and wait for those halving effects to kick in.

Cheers

While we are diving in on our IOTA series on the other side of the blog, I wanted to take a step into another digital asset as well. One asset I have strayed away from, but keep hearing about. That project is known as EOS. Besides the interesting marketing schemes we have seen from Brock Pierce one of the hype boys for EOS, the project has plenty of positive attributes. Because of these attributes and my overall lack of knowledge on the entire project, I took aim to learn more.

During my short journey into the EOS project, I found a lot of interesting things out that I had no idea about. In each part of the EOS series I am going to expand upon these topics and talk about the fundamentals of EOS, the history, the DPOS consensus algorithm, and more. Starting off the series, lets take a look at some of the basics of EOS, and discuss things that I found interesting while digging in. This will be the fun post just talking about the project and some interesting facts.

Nothing should be considered investment or financial advice. Enjoy the ride.

Interesting Things About EOS

I will be digging deep into EOS, but for this post I want to take it easy. By that I mean I want to just simply talk about the project in general. For this post we are going to talk about the sentiment around EOS, price movements, where I place the project in my mind, and top this off with some interesting things I found out about the project I did not know.

Taking it easy is the best way for readers and new investors to get a feel for the project. That is just what we aim to do on this series!

In full disclosure, I do not own any EOS. I think I bought 10 tokens at one point, but liquidated them as soon as the project went up to gain more Bitcoin. After this series and learning all there is to know about EOS though, I will be completely honest and let the community know if I decide buy EOS tokens or not! Stick around to find out.

I am always looking to add new amazing projects to my portfolio, but they have to fit into my portfolio. For instance, I probably will not invest in two projects that are aiming to accomplish the same task on the market. That would be like investing in Bitcoin and Bitcoin Cash or investing in Ethereum and NEO back in the day. You really need to choose one project per purpose in my book.

Moving forward, lets start with where I picture EOS to sit in the market. What is EOS purpose?

What Is The Purpose Of EOS

Now this is going to be a mix of my view so far and the view of the creators. The way I see it, EOS is a platform that is being built to be self governed, scalable, and offer smart applications to be built upon it. They goal of EOS is to be able to host all of the worlds transactions, interactions, social media interactions, and trades all on one blockchain solution!

While this sounds great – I see EOS a little bit differently.

All of those things are obtainable goals that the CTO of Block.one, Dan Larimier, is aiming for. He is a brilliant guy. Although, where EOS really shines currently is in the game development category. On top of that, EOS hosts some of the most widely used and adopted decentralized applications across the market, and it has gained the attention of some of the largest game development companies in the world.

With that being said, I clearly see EOS as the future of gaming development, virtual interactions, and VR. Think about it, games are constantly coming out and players have to lose their skills or levels from jumping from game to game starting fresh. What if all of the games were interlinked at a minimum through a general account hosted on the blockchain. On top of that, developers could build upon previous games and set up the current games for futures ones as well. Users could eventually have a virtual reality world hosted on a decentralized platform for security, anonymity, and enhanced features. The possibilities are endless, and with VR right around the corner EOS is primed to take over the gaming industry in terms of processing, storage, and hosting.

EOS Foundation

Besides my bias opinion on EOS being a gaming blockchain, there were a few things I found out about EOS during my research that surprised me. You see EOS has been mostly constructed by experienced blockchain developers from the start. That means before this project even saw the light of day, the founders and creators had an advantage over other projects from their experience on previous decentralized projects.

Most notably, EOS stems directly out of two projects that are huge in the decentralized world. Those two projects are the successful BitShares which is a decentralized type of exchange and formidable Steam network which is a social platform. Both platforms boast daily usage in the tens of thousands and give EOS an impressive foundation to be built upon. Clearly the founders understand a thing or two about building successful applications and platforms.

In addition to the history of EOS, the project itself hosts a few impressive implementations. For one, there are no fees across EOS. Personally, I did not know this and realized it only after doing some digging. The platform is also run off of a delegated proof of stake system (DPOS) and it works in a few interesting ways. For example, anyone can stake their tokens and in return receive an equal ratio of the networks processing and storage. Although, if the staker wants to relinquish their staked tokens to move or sell them on the market, they must also forgo their storage capacity and processing power.

EOS Market Position

This really give the economics behind the EOS tokens a new light. This means that as companies or gaming developers start to build upon the network and utilize the blockchain storage and processing to build upon, they will actually have to remove tokens from the network. In doing so, they actually help protect the value of their investment in the EOS chain.

Those are just a few of the realizations I came to during my initial research sessions. Other than that, the project itself and the team behind it are quite renown. The EOS crowdsale or ICO raised billions of dollars itself which means this project has a pretty good lifetime behind it. While there has been a prolonged crypto winter, the project raised plenty of money to survive for years and years without being profitable.

On top of that, the EOS token has maintained a top spot in the market despite the constant turmoil and shifting scene in the top 20. That is impressive for any token and speaks to the consistency of the project sentiment and investors supporting it.

Not to mention the volume for EOS tokens traded daily is fairly high considering its purpose and reactivity to other top projects. In addition, the EOS token also managed to make its way directly to Coinbase also further cementing itself in the market long-term. Coinbase is the number one retail provider on the market right now.

All of these factors mixed together spell out a very good situation for a project to become successful in the crypto space. Although, there is still plenty of work and development to be done before that becomes reality.

EOS Educational Series

I hope you enjoyed this short post on some of the things I found interesting about EOS. The project has a lot going for it, and a very good foundation. As we continue to dig in, we will see if any of it matters once we look under the rug and dig around the trenches.

For now, thanks for reading and make sure to follow up on the EOS educational series Part 2 coming soon which will discuss the history and ICO in more detail.

The year 2020 is going to be a great year with everything going on so far. Clearly, I am totally kidding, but maybe not for crypto.

The world seems to be on fire everywhere you look. Just about every month this year has brought with it new unforeseen challenges that the world is unprepared for. With all the uncertainty, it might be time for crypto to start becoming the formidable secure asset class we all want it to become. By that I mean, it needs to offer itself as the prime diversifiable asset class above all of the other traditional commodities. Let’s discuss what crypto is currently during, Bitcoin’s price, and what else crypto could look to fix in 2020.

Nothing should be considered investment or financial advice. Enjoy the ride.

2020 Crypto Market

Taking a hard long look at the market right now, we are in a pretty good position.

Historically, the earlier months of the year have been extremely volatile and unpredictable. Although recently, is seems these months have only served to bolster the crypto community back up again to their former glory. Most of the altcoins are slowly bridging out of their prolonged crypto winter, and the grandfather Bitcoin looks to be entering Spring as well.

This is all gearing up to look like a beautiful digital asset Spring across the entire market. In addition, there are plenty of huge updates looking to see daylight for the first time in years for most of the top assets. Not to mention the extreme global market interest in stable currencies from the Bank of China and most of the largest countries in the world.

It is hard at this point for anyone to say, crypto is fake or just a phase. Crypto has beyond proven its resilience to the winter the market went through to purge itself of the fake ICOs cluttering up the investors and sentiment. We have clearly seen a shift in the market sentiment as well since there is a lack of FUD throughout the market, and new investors seem to be funneling in weekly.

Bitcoin Halving

While we could ignore the largest indicator of the shift, it would not be wise. The Bitcoin halving once again has come to pass, and the network took a steep tumble. While some people look to the network strength as an indicator of Bitcoin price movements, it really does not correlate as well as expected. That is simply due to the economics behind the the Bitcoin reward system and the extreme harsh reality of the Bitcoin halving taking effect.

A better indicator of Bitcoin’s price movement would be statistics like the Grayscale’s fund investing more money weekly into Bitcoin than is currently being produced by the miners in total. Statistics like those are sure to move the needle over time as the OTC market slowly dries up once again causing a lapse in the supply and demand model.

These are simple metrics, but these metrics are consistent. There is only so much Bitcoin produced, and if there are people buying more than is available on the OTC market, it will trickle into the public market.

It only takes time before the price reflects these movements.

Crypto Purpose

While crypto did and does have a purpose to offer a completely decentralized and removed asset class from the traditional market, it will also serve as a new type of commodity. Slowly it will allow investors to hedge away from the traditional heavily manipulated markets of banks and funds to a new stage of investing.

One that has no time limit, person to print more of it, or governing authority. It is a new age and it offers new models for derivatives, funds, indexes, and investing all together. No longer are the normal foreign and domestic investment options the only things on the market, there is a new option in town that most heavy handed investors are probably looking into right about now.

I mean with the uncertainty growing for where the market is heading, why would they not look at crypto? The FED is printing too much money, global trade has been slowing tremendously, and the banks are struggling. Investors will slowly see crypto as a viable alternative in case the worse happens.

Not saying crypto is the most secure place to put your money. Although, the idea is hedging your bet. People with plenty of money know, this is all that matters. Spreading your wealth as far as possible, to prevent any single point of large loss. Crypto, seems to me to be just another avenue to spread the wealth at the end of the day.

Next Crypto Bullrun

There has been plenty of talk about this subject.

For myself, I think the next bullrun will not kick off until late 2021. Here is why:

  • There are still not enough real products on the market.
  • Bitcoin only just had it’s halving. There needs to be time for this to take effect.
  • Ethereum has not launched it’s big update yet.
  • Several projects are still preparing to launch huge updates to their main net.
  • The next wave of investors are not here yet.
  • Regulation is still at a miss in certain vital areas of the world halting development
  • The bullrun could be slowed by world disasters like Covid

These are only a few reasons, but I think another year is due before the retail investors flood the market. There is still too much focus on disasters, racial equality, and lack of developments. Once all this has passed, we could see blue skies once again in the crypto world. Like I said, this is only a guess. The flip side of the coin is that with less people focusing on price, the movement could happen more suddenly and unexpectedly. It is best to keep your assets as liquid as possible and monitor the market daily to capture the best prices and secure your profits.

Welcome back to our discussion of IOTA and tip selection within the IOTA Tangle!  So far in this series we have looked at what IOTA is and how its revolutionary tangle is such a paradigm shift from the ordinary blockchain we are used to seeing in so many crypto networks.  In this post, we’re going to try to better understand the unweighted random walk method for tip selection.  It’s a great method, but it merely lays the foundation for a more intelligent algorithm that will provide the best possible way of approving tips and linking branches on the tangle. 

In case you missed the first post on tip selection, let’s take a step back and get on the same page.  We’ll just briefly mention here what we discovered last time (feel free to pause and read Tip Selection Part 1 before venturing on).  Although the nomenclature may seem a bit funny, a tip in the IOTA world simply refers to an unapproved transaction.  Every time a node wants to perform a transaction on the network, the node must first approve two other transactions that have occurred at some point in the past. 

This is how IOTA is “free” to use (as in there is no exchange of currency, or MIOTA, in transactions but rather an exchange of work).  Although approving other transactions in the tangle is a requirement, pay attention to what’s not required here.  Give up?  Choosing which transactions a node approves can play a great role in determining the robustness, scalability, and eventual convergence of the tangle.  It’s not enough to approve transactions at random; there has to be an intelligent method of offering the best two transactions to approve.

Scaling the IOTA Network

This is where we left off last week.  Randomly choosing two transactions to approve was shown to be not so great, at best.  When we begin scaling a network operating for extended durations to many thousands of transactions all occurring quickly, IOTA could potentially become unstable or slow way down. Instead of randomly choosing tips, what if there was a way to more intelligently choose our path to the best tip for the current tangle state?

Unweighted Random Walk

Alright, that was our setup for the unweighted random walk, the next step (pun intended) in achieving tip selection in an intelligent and effective manner.  Before we describe the unweighted random walk, let’s set a clear delineation between it and the last algorithm we studied, the uniform random tip selection.  Our topic of interest in this post is not simply choosing whichever transaction happens to pop up first as we traverse the tangle. 

The last post attempted to clearly spell out the weakness in this pattern.  Instead, what if we started at the genesis block and started walking to the next tip needing approval?  We could incorporate a probabilistic approach that evenly splits up the “playing field” and attempts to balance the tips remaining on the tangle – hence the “random walk”.  (We’ll discuss why it’s unweighted in a minute.)

Rather than sitting here rattling off facts that may have no bearing on your life, let’s try the hands-on approach again this post.  We’ll start with a simple figure that will help illustrate the points we need to grasp; then we can move on to actually playing with a live simulation to further cement our newly acquired knowledge.  Take a look at the figure below.

Probabilistic Approach

GIF of Tip Selection Part 2

GIF of Tip Selection Part 2

Figure 1:  An example of an unweighted random walk.  Image from the IOTA Foundation blog.

            The GIF above shows a very basic tangle that utilizes the unweighted random walk.  Notice the outlines around block 12 above – this is the transaction that has just been added to the network and needs to approve two other transactions.  Starting on the left with block 0 (the genesis block), the transaction path first follows (or “walks”) to block 1.  Notice that the block appears in blue with the text “100%”.  This means that there is a 100% chance that this path will be taken between block 0 and block 1.  This is a rather silly example but clearly shows path traversal and its probabilities. The same thing occurs between block 1 and block 2.

            After block 2, though, things start to get a little more interesting.  Block 2 has three different paths that it can traverse to get one step closer to block 12.  It can either take the path to block 3 or block 4 or block 5.  You’ll notice that those three blocks all turn blue and display “1/3” when it’s time to choose one – this is because there is a 1 in 3 chance that each of them could be chosen.  In this illustration, the path chosen leads to block 4.  Since the only predecessor to block 4 is block 8, there is next a 100% chance that block 12 approves block 8.

Random Walk Weakness

            There it is, the basics of the unweighted random walk.  Let’s take a second now to discuss why this approach has been deemed “unweighted”.  Did you notice that every time a new path could be taken all nodes had the same probability of being chosen?  In other words, when we went from block 2 to the next hop in the random walk, we had an equally likely chance of getting 3 or 4 or 5.  But… what’s wrong with that?  Nothing, technically.

            Here’s where the weakness lies though.  While this is a totally feasible solution to this problem, it’s not the best solution to this problem.  Remember that we had a 1/3 chance of choosing block 4.  What if, for some reason, we happened to randomly choose block 4 90% of the time?  This get less and less feasible the more approvals that take place, but the math can work out without a hitch.  That could mean that, say, block 5 almost never got picked…which means that its downstream branch would rarely ever be touched. 

After a while, all of these random branches could become somewhat “lazy” and lead to a massive, disparate mess rather than a properly functioning tangle.  We’re not going to tackle this problem until next week, but this method gets us one step closer (another walk pun) to understanding how the best method works and why we would end up choosing it over another algorithm.

Tangle and Transactions

            Alright, we promised some hands-on action to better understand this method.  First, let’s go ahead and open the visualization developed by the nice folks over at the IOTA Foundation.  To tame the model and make it a bit easier to digest at first, let’s start with settings at 10 transactions, a transaction rate (or λ, the Greek letter lambda) of 2, and an animation speed of 0.7.  (These don’t have to be exact, just try to get them close.)  Obviously, this process is random, but we’ll try to explain in general terms what’s happening as the visualization progresses.  At first, we see a genesis block created and then block 1 shortly thereafter.  Block 1 obviously has no one else to approve, so it must approve block 0.  However, after we get to blocks 6 and 7, a real hierarchy begins to emerge. 

New Transactions

            New transactions that come online start to approve the second layer of transactions (most likely blocks 1 and 2 or so in your random visualization).  Each time a new transaction comes online, it’s easy to see that the probability of choosing a specific path to walk drops from 100% to 1/2 or 1/3 or so on.  What happens if the transaction rate in the network increases dramatically?  Try setting a rate of about 10-15.  You may or may not get a second tier of approvals; more than likely all of these transactions will approve the genesis block.  This is a by-product of a very active network – a web of transactions is hard to build because there is no settling time to build a tiered network and a flat tangle results.

            Since we’ve looked at simple examples, let’s take a look at a more complicated tangle that highlights the weakness inherent in the unweighted random walk.  Let’s put settings at about 150, 5, and 0.99.  The demonstration moves quickly, but can you see what’s happening to some of the gray blocks as they appear?  It takes a while for some of them to ever get involved in the tangle, and when they do, they might not have much affiliation other than a few approvals.  This isn’t an optimal configuration as we want the tangle to remain diverse yet compact.  We’ll remedy this situation in the next post.

IOTA Tip Selection

            As you can see, tip selection had to be carefully considered by the IOTA researchers in order to build a working and robust tangle that could scale to many thousands (or eventually millions) of transactions during a short period of time.  Interested in reading more?  Check out this blog post by the IOTA Foundation; it’s a great primer with pertinent information to understanding how this process works and why it’s been designed as such.  We know you’ve been waiting in eager anticipation, so next week we’re going to finally uncover the best algorithm for tip selection. 

Although the methods covered this week and last aren’t the final answers to the question, it was important to build a foundation and better appreciate their limitations and the chosen method’s strengths.

Until next time, happy reading!

Who else slightly misses the old Bitcoin days when nobody knew anything, the projects like Ethereum were just being development and the conferences were small? I for one do, but it is great to see the industry growing so much. During this time though, it can feel like there is just nothing to do. Just sit on our investments and wait. Although, here is a list of a few things on what you should be doing in crypto to not only help the industry, but your portfolio as well.

Nothing should be considered investment or financial advice. Enjoy the ride.

Bored in the House

Yes, I know we are all bored in the house right now, but there has to be a way to productively spend this time. If you are anything like me, you probably already have a sufficient amount of crypto, and now you are patiently waiting to see if your investment pays off in the near future.

While we wait for this future to arrive, there are several things we should be during to help it along the way. In particular, we should be actively trying to educate ourselves further on our investments, other investments, and how to better the decentralized economy. Since we have all this free time, what else are we going to do? Therefore, lets dive into the first thing we should be doing while we wait on the moon and lambo memes to fall in our favor again, educate ourselves.

Educate Yo Self

With all this time, we really should not be wasting it.

Like it or not the investment you made a year or two ago, might not even be toward the same project you once thought it was. Think about it a little – these currencies and ecosystems are constantly changing, evolving, and being shifting around. When is the last time you did a deep dive into your favorite project with an unbiased opinion? I know it had been a while for myself in that regard.

Not too long ago, I did this myself. Two out of the 7 projects I was in were just not cutting it. I loved the projects, the idea, and the potential, but as I saw them progress compared to other projects on the market, I realized they were just not good enough. That’s right, I had to sell decent projects that I liked, in order to help support other projects that had even more potential and even better teams working on them.

In another example, I sold out of a project mainly because of its business philosophy that had changed. It was a project I held for years. Although, from its new business philosophy, it was basically stealing from its community constantly. I did not like that very much. You see, it is vitally important for us HODLers to constantly be reviewing our own decisions and what projects we cling to. We can not let our emotional connections to these projects out weigh our fundamental duty of supporting the best decentralized project on the market. Oh, and also our duty to have the best portfolio possible.

Research

With that, continue to educate yourself in this market. Not only on the top assets, but on new ones and even revisit old ones you once dismissed. There is a never ending list of digital assets to research now, so I encourage you to research at least one asset a day! You will be impressed with either how much you start to respect the projects in your portfolio, or slowly start to question them.

When I started my research journey, it was really hard to compare digital assets, because I did not have much to base the off of. Now that I have personally seen and researched hundreds, it seems like I have most of them figured out or at least can group them into categories.

For you to be a successful investor, you have to work on your base knowledge. You need to know the macro differences in projects around the market, and be able to group them properly for reasonable comparisons. For instance, you should never be comparing Ethereum to Bitcoin. They are two very very different projects with two very different goals. In actuality, Bitcoin and Ethereum compliment each other and are not direct competitors at all.

This is why developing your base fundamental knowledge of these projects is essential. From this, you can already ignore 90% of the articles talking about Bitcoin and Ethereum. This fundamental knowledge lets your ignore the noise and focus on the real important news and information.

Ignore The Noise

If you are wondering how you can start to help the decentralized economy, then you already have started! That is if you are doing what I just discussed – researching digital assets!

By deepening your understanding and developing that base knowledge, you have just made yourself an educated investor. On top of that, you can now properly educate others and push the proper agenda of crypto. That is to make a better, decentralized ecosystem where everyone has a fair chance to succeed. By ignoring the noise of fake news, manipulation, and the buzzing words of Craig Wright, you can start to help build the digital economy.

This space needs more people like you. It needs people who understand the fundamentals, people who do not cave at every dip just because some FUD was spread, and people who can invest with confidence in projects they have researched and vetted themselves. Not just retail investors who FOMO in because of an article they read. The crypto space needs real educated investors, and by becoming one, you have already started to help this space tremendously.

Not only that but when people come and ask you about crypto, you can meet them on their level. The hardest thing to do is usually not to learn something but to teach it. Once you have truly mastered a subject or a skill, sharing it with others in steps is a wonder to behold. If you can not only learn about crypto, but guide other people on their journey when they come to you, then you have done more than 99.9% of the other people chattering on the market over spilled milk or a recent Bitcoin price dip.

What You Should Be Doing in Crypto

Thanks for reading my blog post! This was covering what you should be doing in crypto while we are bored in the house. If you agree, make sure to share, if not then leave a comment why! As always, happy hodling crypto pioneers.

Cheers

One of the projects I have never been shy about in this space is the formidable and academically renown Cardano project. In the recent interim the founder, Charles Hoskinson, has returned to ramping up the marketing and fire-side chats by appearing across the industry in surprise AMA’s and YouTube videos constantly. Most recently, Charles delighted us by appearing on the Cardano partner’s YouTube show – TheCrypoLark.

Nothing should be considered Investment or financial advice. Enjoy the ride.

Charles Community Update – Release Imminent

The main topic of the YouTube appearance was to update the viewers and listeners on what has been happening with the Cardano project in the past several months since his last appearance on the show. Thankfully with the world flipped upside down from Covid, the development has not stopped at all on your favorite project or token ADA.

In fact, the Cardano ecosystem has consistently posed more commits to their Github page than any other blockchain team on the market including their main rival Ethereum. This basically means they are building constantly and making more updates, changes, and revisions faster than any other project currently across the entire market. That is impressive to say the least.

Shelley Project

What they have been working toward or updating the code to specifically is the long awaited Shelley update. Remember, this is the big time game changing update that will take the Cardano project from a measly static centralized project to a full fledged decentralized masterpiece full with formal verification, Haskell code base, proof of staking followed by stake pools, and just a slew of other predicted and anticipated features.

“It is a completely new system, a new code base.”

Charles Hoskinson

Once this launches, it will be the first out of the entire market of it’s kind. More than that, this will probably be the biggest sole update the Cardano project ever under goes. This is clearly an exciting time for the Cardano project, so Charles is trying his best to spread the news. They have been doing releases on a 2 week schedule basis and planning for this launch for years to come. Even since December the team was preparing for this final move over by launching the Shelley testnet that allowed stake pool operators to participate with the launch.

If you build it they will come. And they did!

-Charles Hoskinson

The Cardano project is continually raising the bar with these releases, implementations, and the community has time after time proven to raise the bar just as high. The testnet was a huge success in securing data for the business model parameters that will be behind the stake pools. In addition, there are over 1,200 stake pools at this point, and some of the top operators from the testnet are being trained as we speak on the new code base in order to help with the training once Shelley is released.

While the community involvement is exciting, one of the most intriguing obstacles that the project had to over come was the proof of stake business model and fundamentals.

Why is Ouroboros Special

The proof of stake model that Cardano has built out is called Ouroboros. After more than 6 academic research papers and thousands of hours coding and developing it, the protocol for consensus is finally ready to be released.

Charles commented directly on the consensus method referring to it as a first principals approach to the traditional mining problem. The first principals approach means, they broke the idea down into its fundamental issues and formed solutions at the base layers of ideology before moving to putting any code together. He defines the Ouroboros protocol like this:

It’s a first principles new way of achieving consensus that keeps the stuff you know and love from Bitcoin that’s very useful and great, but then does it in a much more sustainable and energy friendly way that allows you to layer on many more utilities than just mining to the system. It does so in a way that makes it attract a lot of competition and businesses unlike compared to traditional mining.

-Charles Hoskinson (Paraphrased)

Clearly Charles thinks they are onto something special. Although what makes proof of stake so special that it needs thousands of hours of development and fine tuning?

Proof of Stake Advantage

Charles goes a bit into this debate as well. He loves the proof of mining model, but as we can guess it is not sustainable. Eventually the mining pools will become a few conglomerates due to the competition. Basically, unless you have 50-100 million dollars to spare, traditional mining on Bitcoin will just not be profitable for you, and you will not have the infrastructure to compete with the larger mines.

With proof of staking, the opposite is true. As more people stake their assets, the community grows in unison and it promotes a healthier more decentralized ecosystem over the life time of the project. In short, the proof of staking consensus protocol is more sustainable than the traditional mining idea. More so, the proof of staking allows people flexibility that mining does not.

Mining Logistic Issues

For instance, we all know there are a large amount of mining farms in China. This is great and all, but what if China decides they want to ban mining all together? What are these mines going to do in that circumstance, they have all of their equipment to consider if they want to simply move to another location.

Flip the script, if that same mining farm was simply staking all of their assets on the network and only hosting their pool in China the story is much different. The farm could simply switch the network to host off of a more friendly network in another country without having to move hundreds of mines and worrying about physical limitations.

As we can see, staking is a much more economically friendly consensus method, and a much more sustainable method long-term for the lifetime of the project. Traditional mining is not bad, is just comes with its native challenges and limitations.

Cardano Price Action

In particular, investors will be watching the price action of Cardano very closely this year.

We could potentially relate the Cardano release of Shelley, to the initial Ethereum updates that allowed the ICO craze of 2017. That might be reaching, but there really is not any game changing updates coming soon otherwise on the market, and with the market already gearing up to surge, Cardano could easily jump into the focus. The other side of the coin is that this could be a traditional buy the rumor and sell the news kind of deal with Cardano already pushing back on it’s price levels.

If there is not a strong push up in price to around $.08-$.10 on the release, I would be willing to bet a stronger push will soon follow similar to the Ethereum bump in 2017 which would be great to put this project back in the top 10 and potentially top 5.

Hello there, and welcome back to our IOTA tangle series! Throughout the course of this series, we plan to look at the fundamental concepts behind IOTA, a revolutionary cryptocurrency that ditches the blockchain in favor of a…tangle?  If you’re thinking to yourself, “What’s a tangle?”, then you’re in the right place. 

IOTA Tangle Series Recap

Starting in the last post, we began our dive into a better understanding of the IOTA tangle, how it works, and why it even matters in the first place. 

Let’s recap:  a tangle is a directed acyclic graph or DAG.  Unless you’re already a math wizard, though, this concept might be a bit vague, so let’s break it down some.  A graph groups together objects; a directed graph means that the order between various relationships in the group matters; a directed acyclic graph has no succession of hops (between points) that forms a cycle (such that you could start at the beginning and repeat steps in a cyclic fashion indefinitely). 

What Does a Tangle Look Like

This was a bit abstract, so this week we plan to put some more details into the mix to better understand the tangle from an application perspective.  Again, if you want to learn more about the tangle itself from a fundamental, logical viewpoint, check out the last post in the series.

What does a tangle look like in practice?  A simple (i.e., verrrryyy simple) tangle is shown below:

Figure 1:  An example tangle.  Image from IOTA’s official blog.

Let’s start at the very left with block 0.  Like other cryptocurrencies, IOTA also has a so-called genesis block that kicked off the entire chain (or web in this case) of transactions.  When the genesis block was first instantiated, the entirety of MIOTA (IOTA’s token) was put into circulation.  How many tokens did this include?  Quite a few:  2,779,530,283,277,761 to exact (or around 2.78 x 1015 for those who prefer scientific notation).  Note that this number is actually the number of IOTA in place as a MIOTA refers to 1,000,000 IOTA (nice and confusing, eh?).  So while MIOTA is the actual name of the token, the number of IOTA listed above should be divided by 1,000,000 to get the number of MIOTA in circulation. 

Transactions And Approvals

What happened after the genesis block was created?  This is when the network actually kicked things off and started allowing for transactions and approvals.  Remember that the squares in the diagram above represent transactions in the network while the edges that connect the squares represent approvals of transactions.  Every time a new transaction (square) is placed on the network, it needs to choose two prior transactions to approve (where the older transactions are on the left of Figure 1 and newer transactions move to the right).  For example, take transaction #5.  Someone decided to make a transaction on the network, and now they need to approve 2 tips (where tips refer to unapproved transactions).  We’ll get into the selection process for tips in a little bit, but for now notice that #5 approves both #2 and #3.  In a logical fashion, both #2 and #3 have already approved #1 which approved #0…you get the picture. 

As each new transaction comes onto the network and approves 2 more tips, the previous transaction approvals get stronger and stronger (similar to the period of time in Bitcoin it takes to get a high probability of a block being approved; it takes quite a few blocks to really trust a transaction is legitimate – not just one approval).  Are there any more tips still on the diagram above?  Yep – #6 is a tip because it has yet to be approved by any other transactions.

IOTA Tip Selection

Now we understand the basics of the tangle – there are transactions and approvals, and before a transaction can be placed on the tangle it has to approve two other transactions.  No problem.  So that means a node can just choose any two transactions it wants, approve them, and be on its merry way, right?  Not only is this selection process an interesting facet of IOTA as a whole, but it is also extremely important to maintaining the convergence of the tangle and the network’s stability. In this post and the next, we’re going to try to better understand what it means to make a tip selection

Random Walk and Unweighted Random Walk

We could choose any number of methodologies to direct the approval of other transactions, but we’re going to stick with two of the more frequently cited alternatives in this process:  the random walk (or more precisely termed the “uniform random tip selection”) and the unweighted random walk.  I’m going to go ahead and spoil the surprise:  neither of these tip selection methods is used in IOTA; however, without understanding their underlying principles and the why behind their ineffectiveness, we can’t fully appreciate the weighted random walk used by the network.  Let’s start with the random walk (again, the more precise term is “uniform random tip selection”, but we’re just going to refer to it as “random walk” in this post for brevity).

The IOTA Foundation has put together quite an amazing visualization that you can use to better understand the random walk.  Feel free to give it a try before proceeding to experience a more intricate example of a tangle and why choosing the correct algorithm for tip selection is such a vital part of IOTA.

Figure 2:  Animation of a Random Walk

            So let’s examine Figure 2 a bit more.  Both #5 and #6 are animated as having 1) approved previous transactions and 2) been approved by later transactions.  This method is simple…just choose another transaction to approve and you’re good to go.  But what happens when the tangle gets really large or when a lot of people are trying to use the network at one time or both?

Tip Selection Visualization

Here’s where you get to be the kid in the science museum – we’re going to walk through the visual together to understand why choosing random transactions to approve is not a good approach on a sizeable network.  Just in case you didn’t click above, the visualization can be found here.  You’ll see two sliding controls on the web page.  The first is just the number of transactions currently displayed on the screen – simple enough.  The next slider represents the transaction rate on the network (the funny squiggle beside it is the Greek letter lambda).  The transaction rate can be thought of as the time between transactions of various nodes.  This means that at higher transaction rates, more nodes are trying to use the network at one time, but at lower rates few nodes are attempting to perform transactions simultaneously.

Alright, you’ve finally gotten to the fun part.  If you’re following along, go ahead and place the number of transactions at 10 (or close to 10) and place the transaction rate as low as it will go (0.1).  What happens?  This forms a chain of transactions (or it will with high probability; you may occasionally get something other than a pure chain).  In this case, the network is so under-utilized that only one tip ever exists at a time, leading to the next transaction approving the former and so forth.  What about with a transaction rate set equal to 50?  This is the other end of the spectrum – the network is so heavily utilized that the transactions come in too quickly for any mutual approvals to occur.  All of the transactions end up approving only the genesis block; needless to say, this is relatively useless for ensuring validity of transactions moving across the x-axis (time units). 

Transaction Rate

Now that we’ve varied the transaction rate, let’s keep it fixed and begin to vary the number of transactions on the chart.  Go ahead and set the transaction rate at close to 5 and the number of transactions around 30.  You can hover over the transaction sets and notice the paths in red that were previous in time to the current transaction and those in blue that were in the future.  Why are all of the gray blocks present?  These gray blocks represent tips, and there are quite a few, even at a small number of transactions.  What happens if we set the number of transactions to 300?  There are a smaller percentage of tips since the network rate has stayed the same.  Increasing the rate (to around 20 or so) causes the number of tips to get drastically higher. 

Feel free to play with the visualization some more, but let’s summarize what we’ve seen in this exercise:

·        A very low transaction rate will lead to a bland and less trustworthy network since there are no varied paths that lead to mutual ends.

·        A high transaction rate (relative to the number of transactions in the network) will leave quite a few orphaned nodes (or tips).  The paths they take may or may not be of use to the network, and when things scale to real-life size (say many thousands of transactions), the network could become unstable or fail to converge.

IOTA Tip Selection Series

If you’ve found this interesting, here are a couple of links to follow to learn more:

  • ·        Here’s a great summary of the topic we covered this week.
  • ·        Check out the section on transaction tips to get another perspective on this facet of the tangle.

Thanks again for reading!  Next week, we’re going to take a look at the unweighted random walk and why it technically helps but doesn’t fully solve our current problem.  Happy reading!

Recently, there has been a massive uptick in the Bitcoin investment scene. Although the money is not flowing directly through the exchanges, the interest growth will inevitably spill over into the public market at some point. Lets discuss how this could happen, and when we might start to see the next Bitcoin bull run.

Nothing should be considered investment or financial advice. Enjoy the ride.

Grayscale Bitcoin Trust Fund

The Grayscale Bitcoin Trust Fund is one of the most well known funds in the market. It does a great job of measuring the institutional interest across the market, and the general sentiment surrounding the crypto market. Here lately, that interest has been sky rocketing reaching heights it almost never has before. For instance, from Q1 2019 to Q1 of 2020, the daily investment total has gone up by a multiple of 10x. That means for every dollar someone bought of the trust in early 2019, they are buying 10 in early 2020. A huge bump in the investment scene pushing Grayscale’s AUM to over $3.5 billion for crypto alone.

The total assets under management are reaching an impressive number. Just over 3.5 billion in their Trust Fund, Grayscale is looking to be a considerable figure in this space moving into the 2020 – 2021 bull market that will be important to watch.

Bitcoin Bull Market Signals

While this is not the strongest signal for the Bitcoin Bull Market, it is still a good one. Clearly with the world on the edge of collapsing financially, investors and institutions are looking to something more stable in order to protect their wealth. Even more interesting, Goldman Sachs held a public meeting to discuss investing options into Gold and Bitcoin in order to leverage the times and layout a firm plan for protecting against inflation. Historically, the guy leading the call was known to publicly disregard Bitcoin.

This comes just in time for the Bitcoin halving that went off with a sign of trouble. We could quickly see some exponential gains on Bitcoin, but my belief is that it may take a little bit longer before we start to see the stars behind the moon again.

Circling back to the previous halving, it was a good year and a half after the halving before Bitcoin reached it’s respective peak of 20k. Falling quickly back to half of that value at 10k. Ever since, Bitcoin has struggled to maintain this price level without quick downward pressure to the 7k – 8k region.

Looking back, I consider Bitcoin to have gone on a 5x multiple last bull run from the 4k stable position to the 20k high we saw briefly. Assuming 10k is our new stable condition before this up coming bull run, it would not be uncommon to see a 30k – 50k Bitcoin price with 20k being the safe retracement level.

Only time will tell, but if I had to bet on the next Bitcoin high, it would be sometime near the end of 2021, giving investors plenty of time to stack their bags.

Russia Banning Bitcoin

Recently in the news as well, Russia has been said to of banned Bitcoin purchases in cash.

Clearly the “democracy” that is Russia, does not want it’s population hiding its wealth in the digital asset. This has been common practice for criminals and the rich all over the world, but it is ironic how we see the communist lead countires react to a decentralized asset.

The real question they have is, do they support it or do they ban it? I think there has not been a clear line drawn, but for now it seems Russia is trying to control what they still can.

In this post, I want to be generic and discuss why I believe crypto is good for the economy. Not only the economy of the US, Asia, or the EU, but for the entire world economy. Some of this may be far fetched, but stick with me on this, and I will try to make sense of it as much as possible. Lets go ahead and dive on in to it then!

Nothing should be considered investment or financial advice. Enjoy the ride.

Crypto and the World Economy

I want to reiterate, these are my personal opinions and ideas. These obviously have been influenced by research and the things I personally believe, but I will try to be objective in my points.

Obviously, the world sees something in crypto beyond just being a fictitious money system. There is more to digital assets like Bitcoin, Ethereum, and Ripple then only being able to send people money for pizza. I think this is the most misunderstood part about cryptos in general – what lies behind the digital assets, not just what they can currently do.

It is easy for people to look at something and say, that’s not useful. Think about the internet back in the day. All it was back then was message boards and awkward websites, but no one knew what it really could do. No one knew that it one day we would use it for just about everything. I view crypto in the very same way.

Global Payments With Crypto

I know I said there is more to digital assets then just the money part, but my first reason why crypto is good for the world economy is actually because it is a simplified payment system.

Lets elaborate on this a little bit.

The simplicity part comes from the ability for it to operate without a third party bank, government, or institution sniffing around in your business or trying to dictate what happens to your money. In addition, it does this with much lower fees, and with a provable system – the public ledger.

Without considering any of the second or third generation currencies, Bitcoin alone does this and it can do this today. The only thing Bitcoin really needs at this point to be fully operational in this aspect is reasonable entry and exit paths through either vendors or local banks. Ironic, that it needs a bank to transmit to a fiat currency, but what if it didn’t?

Another clear solution would be that countries establish their own digital currencies that transact directly with Bitcoin. This is actually already happening as central banks all around the world are researching launching their own stable coins.

Friction Reduction

This point on how crypto is good for the world economy really ties into the global payments but with a different focus.

You see, as the world progresses we will have exponentially more micro payments for things like self driving cars, toll booths, drones to bring you your food, app services, and things that just require smaller payments with extremely higher frequency. This will become heavily prevalent in over populated areas like the coasts of China and certain parts of India.

There just has to be a way to make all of these charges with a reduced amount of friction. There are some options on the market right now for this. For example, IOTA is looking to pave a way for fee-less transactions in the machine to machine world. There are other currencies on the market similarly looking to accomplish this, but all we really need is one to do the job effectively.

Transmitting More Then Money

The cool part is crypto does not store only the ledger on the blockchain.

Even in Bitcoin transactions, data is sent along with transactions and confirmed in blocks. While this is not the most useful tactic for storing data – other projects have built upon this idea and revolutionized data storage. You can bridge into second and third generation currencies and see how they have progressed to host full coding languages, decentralized applications, and secure databases with their ecosystm.

As these projects continue to build their infrastructure and decentralized blockchains, there are a bunch of new methods being developed to not only host data, but secure it like never before. We have all seen the projections on how much data will soon be available and how technologies like quantum computers could use this data to solve countless things that were never before possible.

The first example could be healthcare data and cancer research. All of this data could be hosted securely. Then is could be accessed with proper keys in order to solve some of the worst problems in healthcare today with the help of quantum computing. This is just one example of the countless things achievable with secure data hosting and global access to it.

Decentralization Ideology

A popular ideology made real by the cypherpunks – decentralization does wonders for the economy. Just as the U.S. likes to push a free market or capital market society, it is still limited by big business, regulatory bodies, and obviously the flow of wealth.

This free market is largely dictated by a few companies and ultimately pushed around by the governments agenda. Just use the federal reserve for example as it prints trillions of dollars whenever it wants. Clearly, this is not a traditional free market, but rather a manipulated one. The same can be said about bailouts and the banks being bolstered with cash daily.

In a decentralized society, there is no control. There is no one to dictate who wins or loses. Now, the community and the market finally gets to decide without intervention. The decentralized economy will make the world a fair playing ground. Crypto pushes that world a little closer to existence.

Bring New People to Market

The last point I want to touch on is crypto’s ability to bring the unbanked to market.

Previously, before the internet and before crypto, there was almost no way for certain people to get a bank account. That means a lack of security for their wealth, and a lack of funding for development. Not to mention women in some Middle Eastern countries were not even allowed to own bank accounts. This was due to their religion. Likewise, people in Africa were denied bank accounts because of the lack of trust or verification methods.

Now with the use of cell phones and crypto accounts, people all over the world can hold their wealth in a secured manner. Specifically countries in Africa and regions in the Middle East, there is an entire group of people finally able to enter into the market. This has been true since the inception of Bitcoin, and will continue to progress as more venues for use open up for crypto. These people will help to bolster the world economy by increasing spending and increasing the free market society.

Reasons Crypto Is Good for the World

Those are my 5 reasons why crypto is good for the world! There are a lot of other reasons to add. These are just a few I tend to lean on when talking about the world impact crypto could have. Thanks for reading and make sure to share if you agree!