Why Cryptocurrency is more than a Hedge Against U.S. Dollar Inflation

During periods of global economic collapse, legislatures print currency. This adds to stagnation, and eventually, creditors stashing their financial resources into safe long-term assets. Historically, it meant gold, but gold has been replaced by some other lengthy-term store of wealth in the latest economic downturn: Cryptocurrency. There are various compelling reasons for that—u.s. The federal Reserve immensely tackles the recession and has reacted in the same manner they often do to inflation figures: by printing currency. The currency has now shed 5 percent of its value, with expectations that this is just the launch. However, according to economists at Goldman, the dollar is projected to lose up to 20 percent during the next five years. Many risks to creditors have emerged with this depreciation: deflation.

Despite the valuation of foreign currencies declining quickly, with most of them still unable to come, creditors turn to Bitcoin as a recession defense against it. This seems to be the official explanation of why Bitcoin has maintained its interest in many areas of the market, amid woeful reporting.

Global Inflation

The main argument in these concepts is that inflation can arise only in foreign currencies and are not dependent on real approximate market valuation, but instead on trust in that gross national product. The above has been the foundation of the U.S. currency’s stability since the Bretton Woods deal of 1944. Using a reserve currency allows policymakers a substantial degree of independence when it comes to finances printing, even theoretically, when it contributes to inflation caps. If policy morale is weak, government expenditure schemes will quickly add to inflation rising out of control. Gold flourished in the 1970s, as it was used by buyers to protect against the rising inflation of the currency. This is similar to what is occurring today. The global epidemic has drawn attention to a highly expansionary monetary and fiscal environment, and rapid extension of the financial system as rates begin to increase in some central areas such as food supplies owing to lockout market shocks. It’s no wonder that the gold is thriving in this area. After all, there’s just a small amount of gold on earth, and therefore political action can’t influence its quality.

Nonetheless, certain cryptocurrency transactions often boom for about the same purpose. Therefore, multimillionaire buyers are lined up to equate Bitcoin with Gold.

Flexibility, Of reality, that does not mean too much. One of several main motivating factors behind Bitcoin’s growth has been the mix it affords of consistency and volatility. This is promising in this sense that consumers already see crypto as a secure shield against such an inflating U.S. dollar, but treating crypto as directly a gold substitute will be overlooking the point that blockchain is even something more than a protection.

A Switzerland State-Run Bank Is About To Introduce Crypto Services

The Basler Kantonalbank, a cantonal bank of Switzerland, has turned out to be the first-ever Swiss bank that made an announcement on its crypto strategies. Here is more to the news.

Tasler Kantonalbank, or more popularly known as the BKB, is a property of the Government of Switzerland that has plans on initiating services of cryptocurrency following the path of its banking division.

On the basis of a report made on the 3rd of August, 2020, by a regional news agency named Finews, a branch of BKB along with a national group of banking named Bank Cler are teaming up to work together on facilities that will give allowances to clients for trading cryptocurrencies besides storing them. Although the division owns its very own license for banking apart from BKB, it possesses a maximum stake in Bank Cler.

Gateway to the Financial Products

From the Basler Kantonalbank, a spokesperson made a confirmation about the news. It also came to notice that the bank is having plans on launching these products responding to a raised nationwide crypto services demand. The aforementioned spokesperson of BKB said in the statement that in the group of Basler Kantonalbank, they were putting their efforts for providing their customers a path to trade and deposit some specific cryptocurrencies.

As BKB is a well established regional bank and Bank Cler being a well known national group of banking, they would like to provide their clients with protected access to the brand new financial products.

However, the spokesperson did not mention what categories of crypto will be obtainable through Basler Kantonalbank. Now, it is quite a premature stage and there’s no tentative time announced for the launch yet.

Leading the Pack

As these plans were made, the Basler Kantonalbank was declared as the very first government bank of Switzerland that is initiating the cryptocurrency industry. Another spokesperson from BKB said that this particular subject was forwarded within the team of BKB by the Bank Cler’s digital competence center.

Also, did you know the fact that Switzerland is called one of the cryptocurrency-friendly authorities on a global basis? Hence, the country is also termed as a “crypto valley”. A bank to fall under the top five Swiss banks known as Julius Baer found its total gain surge more than 30% after recording other cryptocurrencies along with Bitcoins in the first 6 months of 2020, on the basis of a report made on the 20th July.

New Standard to Avoid Ethereum Contract Size Limitation Developed

With the Ethereum looking to hit its maximum contract size limit, a new standard has been designed to help combat the potential problem. The size limit of contract of Ethereum is currently 24KB, at which it contains a lot of functions and code. It can create a real issue for a number of contracts. For example, an ERC1400 Security Token Standard needs 27 functions in addition to 13 events. Another contract standard called ERC-998 Composable Non-Fungible Token Standard needs 31 functions. These, in addition to the application-based code contracts, need to implement them, can cross the 24KB maximum value easily. Even if the developers do not want to implement large standards, they will still want large contracts, so that related codes are kept together underneath the Ethereum address. Keeping all the state and functions together also makes it much easier to amend contract storage as required. Initially, there were talks about increasing or removing the contract size altogether. But, the developers opposed it, citing that it would create unnecessary technical problems.   

On July 10th, programmer Nick Mudge announced that the ‘proxy contracts’ developed by Vitalik Buterin might be the answer to the developing problem, the new standard proxy called Diamond Standard would make it even better. Proxy contracts are those contracts that are stored in a concise manner by taking functions from other contracts. Mudge further added that the standard contracts like ERC1400 Security Token Standards need functions and events that make them hit the limit quickly. The new standard created by Mudge called the Diamond Standard would allow programmers to make small contract by borrowing functions from multiple contracts. The contract that has Diamond Standard will be called Diamond to differential it from other regular and proxy contracts. The Diamond Contracts will have several sides and functions along with a transparent and flexible method to be able to create diamonds that can easily be upgraded. Just like a real diamond, the Diamond on Ethereum will have facets. Every contract that such a diamond will borrow will have a different facet on it.

In addition, the Diamond Standard will also offer 4 functions known ad Loupe that stores all the information about the different facets and the functions that exist in it. The name comes from the word ’Loupe’ which is a magnifying glass which is greatly used in the jewelry industry to inspect the diamonds. Ronan Sanford, the author of ERC-1155 Standard, is also looking to add diamonds to builder-deploy that would make it easy for them to cut the diamonds to allow deploying contracts to any of the other networks. 

According to Mudge, the community has been highly supportive of the new standard developed by him. Many individuals and companies have already started testing the Diamond Standard’s and are hopeful of its potential. Recently, ConsenSys Diligence had carried out a public security audit of the different Codefi contracts and, in the end, suggested them to use Diamond Standard in order to overcome the contract size issue faced by them. Another company VolleyFIre, a liquidity provider for decentralized exchange, is also using Diamond Contracts. 

We May Expect a Bitcoin Rally If Coronavirus Breaks Into a Second Wave

This pandemic has a significant impact on the economy and society. Regardless of being a conscious time, we as a society are facing many uncertainties in our lives. As a Bitcoin investor, this is the most unprecedented time.

Bitcoin investors have to consider many things during this period. Our reaction and precautions are highly based on how the coronavirus spread emerges out in the future. It has taken many lives until now in the first break. If the second part of the virus break will occur in the coming months, we are not ready for that.

It has affected businesses and customers more than anything. Some of the revolutionary changes are work from home, closure of some businesses, laying off a huge number of employees from the companies and so on.

It seems daunting to recover out of the economic losses due to this virus. A huge rate of unemployment has affected many countries and the United States is also one of them. The businesses may need funds to sustain in the game in future.

Because coronavirus has created a situation of high inflation in some countries, young individuals from these countries are trying their luck in the cryptocurrency market. Some of these are professionals while others are middle-class business professionals.

The price of some digital coins is based on the interest of consumers. Dogecoin, for instance, spiked when some young adults spread the word through TikTok. Retail investors, on the other hand, do not invest in Bitcoin. They look out for other means of investments like real estate, shares and more.

Statistics show these individuals are the ones who can die of coronavirus. The death rate, however, shows that people who don’t have access to high-quality healthcare can die due to the pandemic. It is unlikely that individuals who have a significant role in the economy will die due the coronavirus.

Institutions use blockchain to balance their investment portfolio. After the recent halving of Bitcoin, the price has dramatically increased. The main cause of this increment is the limited supply of the BTC cryptocurrency.

The ICO bubble in 2017 is proof of how startups related to crypto have been increasing. At the beginning of the coronavirus pandemic, there was a huge drop in the Bitcoin investment. After a few months, the price graph recovered in the V-shape.

If the second wave occurs, it will be in favor of crypto. The financial systems are changing, crypto startups are increasing, investors are trying their hands on crypto, and much more. This can happen in the second wave too. The crypto industry has flourished during this period and hopefully, it will progress further.

Can Self-Healing Blockchains be the Cure for Scalability Troubles?

The crypto circle, until now, has witnessed:

  • Traditional blockchains or peer-to-peer blockchain systems like Bitcoin and Ethereum that validate transactions, provide computation, and storage using all peers involved. 
  • Sharding blockchains such as Ethereum 2.0 and Zilliqa that share transactions, storage, and computation.

Now, the community is eagerly awaiting a high-performance, next-gen, permissionless blockchain that can scale decentralized applications. 

While sharding technologies allow for unlimited and sustainable scalability of blockchains, many crypto enthusiasts and developers believe that sharding has reached its breaking point. But is that the truth? We must first understand the significance of sharding in blockchain systems.

Today, people use the Internet for many purposes, such as payments, web searches, streaming videos, etc. The enormous work gets split harmoniously among peers involved in a P2P system. This partitioning of work is called sharding. 

An unpredictable P2P network gets compensated for its uncertainty as multiple blockchain communications, based on assumptions, allow only a constant number of validations and storage copies. This restricts blockchain’s ability to scale, as the system can either undercompensate and be vulnerable to external attacks, or overcompensate and restrict scaling. 

Now, developers are looking at the possibility of P2P systems to be flexible and predictable. This means that in an ideal situation, a P2P network needs one storage copy and validation. However, if the peers involved drift from ideal behavior, then the number of storage copies and validations can increase accordingly. 

Internet connection issues, data loss, electricity cuts, free entry, and exit from the network, data inconsistencies and malicious are some of the problems shards face in a P2P system. The unpredictable nature of the P2P network is the culprit here as it decreases computation, storage, and validation performance.

Due to these inconsistencies in a P2P system, a self-healing network has been developed. 

Case I: Conventional blockchains in which all N nodes in the system compute/store/validate transactions in the system.

Case II: An ideal P2P network that consists only of good peers that don’t deviate from ideal nature. Every transaction arriving at the system gets validated, stored, and computed by one peer. 

Case III: Sharded P2P networks that aren’t ideal and, therefore, based on certain assumptions and maximum possible deviations from an ideal network, a mathematical formula is derived. It fixes the number of validations/storage/computations possible to a constant, depending on the protocol of the blockchain.

Case IV: The above cases are extreme scenarios. In self-healing P2P networks, the level of deviation from ideal behavior determines the number of computations/storage/transactions. It’s denoted by the formula, N/x(c), where ‘c’ signifies the chaoticity of the system. 

Chaoticity is a function of electricity, data availability, internet bandwidth, etc. of the network. So, in the event of any deviation, whether negative or positive, the network can self-heal by pursuing countermeasures. 

Unlike traditional, sharded, and ideal blockchains, self-healing blockchains can last for a long time. These networks maintain true decentralization while achieving scalability close to centralized networks. Since there exists high scalability, peers can build any centralized application on them.

The application of artificial intelligence to the process of creating self-healing blockchain can improve their performance, its ability to predict a deviation before its occurrence, and make it faster. Self-healing P2P networks are the only way to proceed to create a truly decentralized world.