Revenue over price pumps - the future of crypto investments post Bitcoin
Crypto would be extremely stable at this point if only people knew the value of things like “liquidity pools” and its fees/inflation mining incentivization models.
You see, the average crypto user is not a long-term investor, they look at bitcoin and say if only I knew to buy earlier or start mining earlier and they do not even realize how DeFi is delivery a similar incentive layer to bitcoin mining, only that you don't need to run heavy hardwares or any nodes at all - you still earn even whilst offline.
Sustainable Rewards Baked In
People hardly focus on revenue when it comes to crypto, the hustle culture within crypto is focused on taking value out of the system rather than growing it within it.
This is expected nonetheless, to change overtime. I, for one, remain confident that DeFi will be the largest sector within crypto in the long term because it would effectively be a part of almost every system set up in crypto.
A recent report on cointelegraph has brought fresh debate on the future of bitcoin with ETFs coming into the picture.
However, spot Bitcoin ETFs are made to “vacuum up assets” and “store them in a metaphorical vault,” he said.
If Bitcoin ETF issuers end up holding all of the Bitcoin and investors end up buying Bitcoin derivatives rather than hodling themselves, the number of transactions on the network will dry up, and miners will lose any incentive to keep validating transactions.
“The end result is miners turn off their machines as they can no longer pay for the energy required to run them,” said Hayes. “Without the miners, the network dies, and Bitcoin vanishes.”
“Fundamentally, if ETFs managed by TradFi asset managers are too successful, they will completely destroy Bitcoin.”
While the Bitcoin community might find this comical at face value, we have to ask ourselves whether or not this is actually far-fetched or quite a possible reality?
First of all, bitcoin is a very limited asset, if institutions flood the system, we are bound to experience insane price hikes, if people cash in - institutions get their hands on more coins to lock away, if people don't cash in and hold off, it really still results in the same thing - lower transactions.
Why do I seem to believe that this is possible?
Because bitcoin has a limit to how many coins can be minted, meaning that in an event where there's mass interest, there are no new coins to feed the demand.
Transaction costs at this point are bound to climb, which could also discourage users from transacting and mining equipment may experience price hikes, all adding burdens to miners.
If miners start losing money, they eventually go bankrupt, the Bitcoin mining network becomes exposed to central attacks as some miners may cease operations.
This is actually something to think of as a bitcoin investor and generally as someone invested in crypto as so much within the ecosystem is leaning on Bitcoin.
The Future: Crypto Is Beyond Bitcoin Nonetheless
Crypto will move towards a revenue-generation mindset and there will be low focus on all this hype and bullshit.
Whether or not bitcoin gets attacked by institutions will not mean Jack to the rest of the ecosystem, it's as easy as opening a new window.
If bitcoin gets attacked, a new blockchain will replace it, after all, bitcoin with the community seems to be designed for a future of hoarding coins and transacting via centralized systems, so it shouldn't really be a worrisome for the rest of the ecosystem losing a chain that was only simply adding new blocks but it is really a food for thought.
Posted Using InLeo Alpha